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Anticipating 2014 Growth, Kapa Biosystems Doubles Space, Bolsters Managerial Team

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Kapa Biosystems, an eight-year-old biotech firm that supplies reagents for PCR, next-generation sequencing, and molecular diagnostics, said this week that it has beefed up its managerial team and more than doubled its global facility investment as it looks to sustain or accelerate its growth trend in 2014 and beyond.

In addition, Kapa, which has traditionally focused on products for DNA analysis, plans its foray into the RNA analysis space in coming months with a number of new products, company executives said.

Founded in Cape Town, South Africa, in 2006 to develop next-generation PCR reagents, Kapa has leveraged a proprietary protein engineering method dubbed 'directed evolution' to simulate natural selection in the lab. As explained on the company's website, the process starts with a gene coding for a wild-type enzyme of interest. Random variation is introduced into the gene through mutagenesis, creating a library of millions of genes each coding for a unique enzyme variant. A selection pressure is then applied to the library, and only the genes coding for the fittest enzymes survive. This process of random mutation and selection is repeated until the desired enzyme function evolves.

Using this method, Kapa has developed reagents and kits for a number of DNA analysis applications such as real-time PCR, high-fidelity PCR, fast PCR, hot-start PCR, crude-sample PCR, robust PCR, NGS, and molecular diagnostics.

"When we started … [the field was] pretty stagnant as far as innovation and R&D, and we thought with this platform we could innovate and really unlock potential for people," Christopher McGuinness, co-founder and COO of Kapa, told PCR Insider this week. "We're seeing that come true, where we're enabling applications that were previously unable to be addressed."

For instance, a team of researchers from Lawrence Livermore National Laboratory in 2011 reported on a PCR method that enables nucleic acid amplification in less than three minutes using typical microliter-scale reaction volumes. The group, led by LLNL researcher Reginald Beer, found that only two commercial polymerases — the Kapa2G Fast and Takara Bio's SpeedStar HS — were compatible with the rapid PCR technique.

More recently, a German team published a study describing its long-run real-time DNA-damage quantification (LORD-Q) method, which used the same enzyme, Kapa2G Fast, to achieve results.

The Kapa2G Fast enzyme is an obvious example of how one of Kapa's engineered enzymes can simply speed up an amplification reaction, McGuinness said. However, many of Kapa's other polymerases are designed to address common problems of other commercial enzymes, such as lack of compatibility with inhibitors or the inability to amplify damaged DNA.

Kapa's enzymes also play well in the NGS space, McGuinness noted.

"NGS is a great space for us, as well, because of the enzyme-intensive nature of it, and some of the features of those enzymes [such as] low bias or high GC content abilities," he said.

In NGS, Kapa's kits have been most successful for use in library preparation, but McGuinness noted that one of the company's earliest products was designed for library quantification and is used by many Illumuina NGS customers.

"We serve a lot of the NGS customer base," he said. "We're trying to build our brand that way. But obviously we interact with the key players on a very regular basis."

After starting in Cape Town, privately owned Kapa eventually forayed into the US, setting up shop in Woburn, Mass. And, according to McGuinness, the company has experienced "great growth" and achieved profitability for the past three to four years.

"We've seen great growth across all those [application] categories and we continue to see growth in those buckets," he said, adding that the company has seen greater than 50 percent year-over-year growth for the past three years, and that NGS is the company's fastest-growing niche.

Because of this growth trajectory, Kapa decided it needed to expand both to keep up with customer demand and to boost its R&D capabilities in order to expand its product portfolio.

Specifically, Kapa moved its headquarters from Woburn to a larger facility just a few miles north in Wilmington, Mass.; and relocated its South African manufacturing facility to a larger space in Cape Town. Combined, these new locations offer more than 25,000 square feet, more than doubling the company's previous facility investment, it said.

In addition, Kapa added four new managers: Kobus Lindeque, managing director of the Cape Town facility; Jean-Christophe Hatinguais, director of international sales; Chris Tierney, director of business development; and Brian Komorous, director of marketing.

"A big part of the Cape Town expansion is related to scaling up our manufacturing capabilities so we're able to produce more with the same amount of people, as well as expanding … our business-to-business relationships, some of those being in the diagnostic and clinical sequencing space," McGuinness said.

Further, Kapa plans to increase its head count this year from its current approximately 110 employees to 125 by the end of this year, McGuinness said.

Finally, the company will look to branch out into other markets with the introduction of several new products over the coming months. "The expansion of Cape Town was also to increase our R&D capabilities to expand our offerings," McGuinness said. "We've been pretty focused on DNA markets, and are starting to expand in the very near future into the RNA space."

For instance, Kapa will be launching a suite of RNA products that "compliment and build out" its NGS portfolio, a spokesperson said in an email. Additionally, the company is developing RNA analysis products for the real-time PCR market.

Kapa completed one round of financing totaling about $7 million around its founding in 2006, but has no immediate plans to pursue additional investment to fuel its growth.

"The goal of that financing was to enable us to get to profitability, and in fact it did," McGuinness said. "We've been profitable generating cash for the last few years. We're not looking to do any financing out of necessity, but are always looking to expand the offering and [will] think about financing if it makes sense."

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