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BioTrove Spins out RapidFire MS Sample-Prep Biz, Sells OpenArray Arm to Life Tech

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This story originally ran on Nov. 12.

By Tony Fong

BioTrove this week announced it has formed a wholly owned subsidiary to hold the assets of its RapidFire mass spectrometry-based sample-preparation business unit, following the planned sale of BioTrove to Life Technologies.

After the completion of the Life Technologies acquisition, the new company, called Biocius Life Sciences, will become an independent firm.

Jeffrey Leathe, who has been the CFO of BioTrove since 2007, has been named chairman and CEO of Biocius, based in Woburn, Mass., the headquarters of BioTrove.

Jon Özbal is the new firm's chief operating officer. He had been vice president and general manager of the RapidFire business at BioTrove.

As a result of the spinout, all of BioTrove's RapidFire employees — about one-third of BioTrove's total headcount — have been or will be transferred to Biocius (pronounced Bio-key-us). Leathe would not elaborate on how many employees Biocius has now but said that at the end of 2010, Biocius will have about 30 employees.

The formation of Biocius, which combines the Greek word for life, "bio," with the Latin term for faster, "ocius," was announced on the same day that Life Tech said it would pay an undisclosed amount to acquire BioTrove, whose main platform is the OpenArray high-throughput gene-expression and genotypic analysis system.

Life Tech has been the leading mass spec business, but is now exiting that market after disclosing in September that it would sell its half its mass-spec joint venture with MDS to Danaher [See PM 09/10/09].

In a conference call on Wednesday, Leathe said that regardless of the Life Tech purchase of BioTrove, the RapidFire and OpenArray businesses were serving different marketplaces with different technologies, "so it was becoming more and more obvious that these were separable businesses.”

"Clearly the transaction with [Life Technologies] probably accelerated that process, but I think it was well under way in terms of the commercial success that the RapidFire team had been having on [its] own," he said.

He added that the current M&A environment precluded any chance of selling the RapidFire business to another company, including a mass-spec vendor.

"The reality is that we think there's tremendous opportunity in this business [during] the next few years, and the valuations in the markets today are depressed," Leathe said. "The best opportunity for this company and our investors was to go ahead and continue on the growth trajectory that we have well established, and, hopefully in a few years, the marketplace improves and we would see higher valuations."

Biocius is "well capitalized from the gate" by investors it had when RapidFire was part of BioTrove, he said, but declined to elaborate.

As an independent firm focused exclusively on the RapidFire system and its service business built around it, Biocius will be freed from having to share resources with BioTrove's OpenArray business. Calling Biocius' R&D pipeline already "robust," Leath said that its new product-development efforts will only intensify.

"There's no capital rationing, if you will, between the genomics platform and the [RapidFire] mass-spec platform. We're free to trade now solely on our own R&D efforts," he said.

Several new product launches are planned for 2010, including some with proteomics applications, Özbal said on the conference call.

"We're developing several applications on the same product platform, so there are several different approaches ranging from things like kinetic studies … all the way through fractionation, characterization, some MudPIT type experiments," he said. "Our time-of-flight technology … will also have some proteomics applications because that platform will have the ability to look at intact proteins, which we don't currently have with some of the quadrupole-based systems."

The company’s next product launch "will involve interfacing a Rapid300 system with a high-resolution mass spectrometer to solve the problem of mass-spectrometric method development," Özbal said. He said the impending product will facilitate the use of "a much greater range of analytes in discovery applications, including whole proteins and very large molecules."

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Another product, currently in beta-testing at the Massachusetts Institute of Technology, is a multi-dimensional liquid-chromatography platform, which "will help streamline applications in proteomics and target discovery as well as applications in process analytical technologies and quality control," he added.

The product will be directed at academic researchers and biopharma. Biocius' core customers remain pharma, and it counts 13 of the top 15 pharma firms as recurring customers. The new products being readied for launch are expected to shift the customer base more toward academia and government researchers during the next few years, Özbal said.

Analysis of Intractable Targets

RapidFire was developed as a result of a collaboration between BioTrove and Pfizer, which provided the seed money to develop the technology. The first RapidFire system was installed in 2006 with an undisclosed large pharma.

Used in combination with mass spectrometry, RapidFire enables automated sample prep at a rate of up to six seconds per sample. According to Biocius, it enhances the high-throughput screening of candidate drug compounds and in vitro ADME assays. It also allows for the analysis of challenging targets such as triglycerides, lipids, fatty acids, prostaglandins, steroids, coenzyme A derivatives, neurotransmitters, epigenetic targets, anti-fungals, and anti-infectives.

Company officials did not provide specific sales figures for 2009 but said that they are nearly double that of 2008, and projected sales for 2010 at about $10 million.

The RapidFire installed base will more than double in 2009 to about 25 compared to a year ago, and in 2010 that number is expected to double again, Özbal said.

In July the company installed its first RapidFire instrument in Europe: German drug maker Boehringer Ingelheim is using the system to expand its in vitro ADME applications. At the time, BioTrove also said that the RapidFire system had received the CE and ETL Marks, enabling it to market the system in the European Union and Canada, respectively.

RapidFire's first Asian installation occurred this quarter with an undisclosed Japanese firm.

In May, BioTrove launched the RapidFire 300 MS platform.

"This next-generation system has the ability to run a much wider range of assays in both drug discovery and drug-development applications," and has enhanced automation and robotics that "enable hands-off overnight operations," Özbal said this week.

In addition to drug-drug interactions, the RapidFire 300 allows researchers to study P-glycoprotein inhibition, plasma-protein binding, and other areas not possible with the system's predecessor, the RapidFire 200.

Both instruments are mass-spec vendor-agnostic, though the 300 requires a "significantly increased amount of integration" with the mass spec, and Biocius is "working toward" launching products that are compatible with instruments from ABI/MDS, Agilent Technologies, and Thermo Fisher Scientific, Özbal said.

As part of BioTrove, the RapidFire business had already forged strategic relationships with the three mass-spec vendors. Biocius has co-marketing and reseller agreements with ABI/MDS and Agilent, and an R&D agreement with Thermo Fisher. Those relationships will continue, Özbal said.

Along with the RapidFire system, Biocius also provides services to customers as a contract research organization, which only until recently had been the main revenue driver. The instrument business, though, has become the firm's dominant revenue source. In 2008, revenue was evenly split between the CRO and instrument businesses.

This year, revenue is expected to be split 65-35, weighted toward instruments, with the gap expected to grow even greater in the coming years, company officials said. "Clearly the instrument piece is going to continue to grow at very high rates," Leathe said.

Biocius is exploring additional strategic partnerships to augment both its instrument business and CRO operations though Leathe said "we're not necessarily wedded to those two legs of the stool. We suspect that, based on some initial work, there may be some opportunities where we can leverage our core competencies … within certain other marketplaces. So [there] really are no boundaries in what we might do, but it just has to make sense given the competencies that we have in house."

Özbal added that the company receives feedback from its pharma customers "in terms of additional applications [and] products that they would like to see from us."

The company, he added, is in the process of finalizing a distribution agreement with a company in Japan to cover that country and southeast Asia.

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