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Forget Reach-Through Rights: Eurogentec, Protea Pursue Pure Proteomics Service Models

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The jackpot may not be as big as with reach-through agreements, but a straight service business model may offer smaller proteomics companies an attractive no-strings-attached route to success in the sector.

Take Eurogentec of Seraing, Belgium, which added proteomics services to its portfolio of research services last month by acquiring Wita Proteomics of Berlin. Wita's 2D gel electrophoresis and protein identification capabilities seemed a good match for Eurogentec, which is a spinoff from the University of Liège and has about 260 employees.

Eurogentec's previous protein research offerings were limited to production of monoclonal and polyclonal antibodies. The company is also developing low-density protein arrays on glass sides that are in development, and is planning to offer array services to pharmaceutical companies later this year, according to CEO Jean-Pierre Delwart.

Now, Eurogentec has the challenge of turning a profit from its new subsidiary, Eurogentec Proteomics, which is equipped with one MALDI and one ESI mass spectrometer, as well as 2D gel equipment.

Wita Proteomics itself, founded in 1999, apparently failed to do so: In September, the company filed for insolvency, after being unable to acquire enough contracts to cover its costs, according to both Eurogentec and Berlin-based venture capital company Advantec, Wita's main investor. However, it “wasn't a revenue question,” said Pascal Bolon, Wita's marketing and sales director. As a result, Advantec, which had put about €800,000 in the company and was planning to invest another €300,000, backed out.

Eurogentec, unlike Wita’s former management, will not ask for intellectual property rights. “If you want to retain some rights on the target, on the protein, you will lose customers,” he said. Wita will now be a pure fee-for-service company that will benefit from Eurogentec's extended sales network, which covers all of Europe. “We think that we can bring more contracts to the company to make it profitable,” said Delwart.

In addition, Eurogentec will try to retain and renew Wita's existing research agreements — for example its contract with Nestle. Wita will retain its eight employees and remain located in the Berlin area, according to Delwart.

West Va. Proteomics Mining

Protea Biosciences, a startup out of Morgantown, W.Va., is also pursuing small-time success via the pure service model. Earlier this month, the company announced that it had signed a contract with Novartis to analyze biological samples from cancer patients for biomarkers.

Rather than asking for intellectual property rights to discoveries, Protea plans to offer protein identification to its customers on a fee-for- service basis. “Everybody wants reach-through, everybody wants economic participation,” said Stephen Turner, Protea' s president. “I think there is a tendency in the biotech industry to push for that too early in the history of the company.” Protea also wants to develop its own protein targets and biomarkers, and already has candidate biomarkers for colon cancer, Turner said.

Protea, which claims to be the first biotechnology company in West Virginia, was spun out of West Virginia University in 2001 to commercialize technologies developed at the university's health sciences center's proteomics core facility. The company now has five full-time employees and a couple of Finnigan ion traps. In addition, it has access to instruments of the university’s core proteomics facility.

According to Turner, Protea uses a microfluidics chip it developed with Aaron Timperman at WVU, coupled with tandem mass spectrometry, to separate and identify proteins with sensitivity down to sub-femtomolar levels. Late last year, WVU and Protea were awarded a $1.7 million state research challenge grant to develop the technology further.

Last year, the company raised $250,000 from the West Virginia Jobs Investment Trust, a public venture capital fund founded by the state of West Virginia. In addition, the company closed a seed round of $1 million from undisclosed institutional investors last year, according to Turner, and plans to raise additional funds later this year.

— JK

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