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Febit Slashes Headcount, Kills Sequence Capture, Expression Offerings in Favor of miRNA Play

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By Justin Petrone

This story was originally posted on June 25.

Febit has reduced its workforce by 60 percent and has shuttered its sequence-capture and expression-profiling products and services, as well as other activities, in an effort to intensify its focus on microRNA biomarker discovery.

Harmut Voss, new co-CEO of the Heidelberg, Germany-based company, told BioArray News last week that the cuts were necessary to take advantage of a "window of opportunity" in miRNA discovery that could enable the firm to enter the molecular diagnostics market.

Voss replaces longtime President and CEO Cord Stähler, who has left the firm to join Siemens Healthcare. Voss is an advisor at Febit's main investor Dievini Hopp BioTech Holding, and is the chief business officer at Life Biosystems.

Jochen Kohlhaas, chief financial officer, has taken on the additional role of co-CEO.

As part of the restructuring, Febit, which employed around 100 people, will now be left with 40 people. It has also discontinued instrument sales, genomic sequencing services, HybSelect sequence capture, expression profiling, and its synthetic biology R&D activities. However, Voss acknowledged that "existing customers may be treated individually in certain areas."

According to Voss, Febit has been using its Geniom biochip platform to discover and generate miRNA signatures that are "clinically meaningful," and the company has "proven over the last year with a number of clinically relevant publications, collaborations, and projects that this is feasible." He said that the firm's customer base of clinical researchers is "growing very rapidly."

Febit is now looking at a "window of opportunity, where [it] can build on this existing position and can generate significant IP in partnerships with clinical researchers," Voss said.

He added that Febit was examining "two routes" to carry signatures from the discovery stage to the clinical market. The first of these is the Geniom technology itself, which could be developed into a "closed system diagnostic setup." The second option would rely on "signatures from discoveries [that] can be translated into predefined primer sets for qRT-PCR assay sets for specific clinical settings."

Voss provided no timeline for when Febit's diagnostics ambitions could come to fruition. In a statement the firm said that miRNA biomarker profiling is a "promising field of large-scale diagnostics for diseases such as cancer, cardiovascular disease, and multiple sclerosis."

Febit initially launched its Geniom platform in 2003. The system enables users to synthesize eight arrays in parallel, run the experiments, and analyze the data with the accompanying software. The company became insolvent the following year due in large part to disagreements among investors, but reemerged in 2005 with help from main investor German software entrepreneur Dietmar Hopp (BAN 5/25/2005).

Since then, Febit expanded into a number of fronts, including establishing a US presence in Lexington, Mass.; investigating a potential market opportunity in synthetic biology; and debuting offerings in new markets like miRNA profiling and sequence capture. As part of its sequence capture activities, the company signed a strategic deal with Life Technologies' Applied Biosystems last year in which it began using ABI's SOLiD sequencer for high-throughput sequencing services (BAN 9/29/2009).

Voss said that Febit had over the past five years explored a number of opportunities that had "different strategic potentials" going forward, but that each had "different complexities" and "required different skill sets.

Voss noted that Febit, as a relatively small private company, was not only building, selling, distributing,, and supporting its instruments, but was also selling chemistry and raw chips, prefabricated chips, and genomic services and also supporting R&D efforts in PCR-on-chip and synthetic biology.

While Febit touted its HybSelect sequence-capture offering as a potential money maker — Chief Scientific Officer Peer Stähler said on several occassions that the company had more demand than it could address — Voss said that given Febit's relatively small size, it was not in a position to compete against rivals like Agilent Technologies and Roche NimbleGen. This becomes even more noteworthy considering the widely held belief that this market would eventually diminish as sequencing costs decline.

In regards to HybSelect, Voss noted "steadily declining" prices for genome sequencing. "If you can get a genome sequenced today for less than $10,000, how much can be realistically earned from subtracting a specific genomic region and subsequent sequencing?" Voss said. "The manual work involved will not justify the effort and bring any reasonable return on investment in a service setting," he said.

According to Voss, the skills required in HybSelect did not "optimally fit the capacity" of the Geniom platform. "Hands-on processes and manual lab work is prone to numerous factors of variability," Voss said. "It is not a stupid, simple process," he said. "This does not mean that it cannot work and produce very good results or that the technology does not work, it may just be project- and complexity dependent."

Of its nascent sequencing services, Voss said, "How big are [the] chances to run an economically reasonable sequencing service with one or two SOLiD instruments? [There is] no real [benefit] for Febit."

In both its HybSelect and sequencing services, Febit will fulfill all services for existing customers, but will not enter into new service contracts, Voss said.

The New Febit

Following its restructuring, Febit will continue to employ a platform team operating its in-house chip production, with a strict focus on miRNA chip production, Voss said. He said that Febit will also maintain personnel to support the "in-house production farm" and customers who bought Febit instruments. Febit will also support a biomarker discovery team that will focus solely on miRNA signature discovery and bioinformatics data analysis.

The impact of Febit's cuts will also hit its US office, but Voss said the company will maintain a sales and marketing force and other activities there. "Certain R&D efforts in the US work in strategic partnerships, and they have a clear milestone-based plan," Voss said. "As long as we achieve the desired milestones and there is an economic rationale, these projects can continue."

These cuts are related to Febit's decision to shift its strategy from a "broad and technical platform-based business to a content-focused business," Voss said. Febit believes its Geniom platform offers a "good fit" for the diagnostic setting, and the company aims to discover markers that "may be very clinically relevant in the future for disease and therapy monitoring and early disease detection from blood."

Febit is certainly not alone in the miRNA array market. Its most direct competitor will be Copenhagen, Denmark-based Exiqon, which sells arrays for miRNA research and has a biomarker discovery program. Houston, Tex.-based Asuragen offers an array-based biomarker discovery service and is also developing miRNA-based tests.

Rehovot, Israel-based Rosetta Genomics already has miRNA-based tests on the market, and is preparing to launch an array-based assay for cancer of unknown primary (BAN 3/23/2010).

As an advantage, Voss cited the firm's chip layout, which typically contains 6,000 to 8,000 features and covers the 1,000 miRNAs in the latest version of miRBase. He said the layout results in a "stable assay system with significant redundancies on a single chip."

Indeed, since Febit's Geniom allows users to program and synthesize their arrays on the chip, the company has been able to update its arrays to reflect the latest content of miRBase as it becomes available, often months ahead of its competitors, some of whom have to design and validate their probes before updating their current catalog miRNA chips (BAN 9/19/2008).

Voss also said that Febit's microfluidic primer extension assay for miRNA profiling, which supports on-chip labeling, could give the firm a technical advantage over competitors' systems. According to the company's website, MPEA uses unlabeled RNA samples for hybridization. In a second step, the specific enzymatic elongation of the bound miRNAs takes place, reducing the required sample amount.

"The enzymatic MEPA assay has advantages over purely hybridization-based assays of competitors with regards to specificity," said Voss. "Working from whole blood is particularly interesting and acceptable in the clinical setting."

Voss said that Febit is committed to its intensified focus on miRNA and has been "urged" by its partners involved in clinical research to focus on miRNA biomarker discovery "with all the capacity which makes sense for a small private company."

Febit will "focus on what we believe will bring the most long-term value for the company: this is highest possible quality on a straightforward chip layout and a clear focus on miRNA signature discovery," he said.

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