Start-up biotech firm Molecular Metabolism has purchased the assets of NextGen Sciences' diagnostics subsidiary.
Molecular Metabolism plans to use the assets, which include mass spec assays for a number of potential protein biomarkers as well as mass spec instrumentation and research samples, for its diagnostic development efforts, company Founder Patrick Muraca, told ProteoMonitor. He declined to say how much the company paid for the assets.
Muraca is also the president and CEO of Pittsfield, Mass.-based gene and protein diagnostics firm Nuclea Biotechnologies. The two companies, however, have no relationship to each other, Muraca said, noting that while he would serve on the board of Molecular Metabolism he would not have a management role there.
Founded at the beginning of 2013, Molecular Metabolism currently has three employees and is looking for a CEO, Muraca said. The company has enough money to support operations for one year, he added, and is considering a Series A round to raise additional funds.
The firm is focused on metabolic-based disorders such as diabetes and obesity, Muraca said, and has established a collaboration with Harvard Medical School's Joslin Diabetes Center. It aims to develop clinical diagnostics in these disease areas that it plans to then license out to interested parties.
Given this focus, the company was particularly interested in NextGen's protein assays for central nervous system biomarkers, Muraca said, noting observed links between Alzheimer's disease and diabetes.
"They had some very good [protein] assays they had developed," he said. "The intellectual property was all there and filed, so there was huge value in that area. They had done quite a bit of work in the oncology space, quite a bit of work in the central nervous system space. So that gave Molecular Metabolism a very quick start."
The NextGen piece represents roughly 50 percent of the company's core assets, Muraca said.
Throughout much of the last decade, NextGen focused on developing and selling proteomics software, instrumentation, and consumables including protein chips and an electrophoresis business that it sold to Sigma-Aldrich in 2009.
That sale was part of a shift, announced by the company in 2008, toward the protein biomarker development services business. In 2010, NextGen inked a deal with drugmaker Takeda Pharmaceutical to develop multiple-reaction monitoring mass spec assays targeting specific protein isoforms found in liver and muscle (PM 2/5/2010).
The following year NextGen launched its first protein biomarker discovery panel, plasmadiscover41, an MRM-MS-based panel comprising 41 plasma proteins thought to be potential biomarkers for breast, prostate, and lung cancer (PM 3/18/2011).
At the time, NextGen's then-CEO Barry McAleer told ProteoMonitor that the goal was to compete with Rules-Based Medicine – now Myriad RBM – the leading player in the protein biomarker discovery panel business.
"If people wanted to do [protein biomarker] discovery, they just tested [their sample] against the Rules-Based Medicine panels because there was nothing else," he said. "What we're looking to do is go for panels that do have better content, and ultimately with MRM we think we can grow our assay panels faster than [RBM] can, so we should be able to catch up."
"The initial goal would be that when somebody wants to do discovery, instead of giving $100,000 to RBM, they might give $50,000 to NextGen and $50,000 to RBM," he said at the time. "Then as we grow the business they should start to see that we get good data and hopefully we can draw more money our direction."
Ultimately, the company was unable to make this strategy work. It released a number of additional protein marker panels in 2011 and 2012, including an expanded human plasma panel and cerebrospinal fluid panels for human and rat, but was unable to generate sufficient revenues from this business. In October of last year, NextGen's parent company NextGen Group announced that it was looking to sell NextGen Sciences (PM 10/26/2012).
NextGen Group noted at that time that due to an inability to secure additional financing it would likely wind down its business if it were not able to find a buyer for NextGen Sciences. It added that even if it sold the business, "it is unlikely that [NextGen Sciences] will generate sufficient cash to settle all the company's outstanding creditors in full."
And, indeed, in December 2012, six former NextGen Sciences employees sued the company for failing to pay compensation they claim was owed them (PM 1/11/2013).
Filed in the US District Court for the Eastern District of Michigan Southern Division, the suit alleged that the company and its officers Leif Hamoe and Thomas Borcholte failed to pay the employees – Eric Simon, Bhavin Patel, Andreas Jeromin, Hiroshi Saito, Christine Verellen, and Joanne Tobias – wages owed for the period Aug. 1, 2012, through Oct. 10, 2012, totaling $115,002.
In January, the court filed an entry of default after the company and Hamoe failed to plead or defend themselves in the suit. Both were served with papers on Dec. 18, 2012.
This month, the plaintiffs amended their complaint to include a violation of Michigan's Uniform Fraudulent Transfer Act, alleging that the defendants had transferred NextGen Sciences' assets to an entity entitled NextGen Sciences Dx to avoid paying the plaintiffs.