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From Its Geneva Base, GeneProt Sees Both Constraints and Road Map for Future Prosperity

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Just over two years after GeneProt’s founders met in the business travelers’ lounge of Boston’s Logan Airport to start one of the first large-scale proteomics companies, GeneProt’s flagship facility in Geneva is evidence that they have made great strides towards maturity.

The company’s blue and silver metal building on the outskirts of Geneva — emblazoned with the GeneProt logo in 10-foot lettering — contains all the high-tech protein analysis tools GeneProt’s managers hope will help bring it success: labs packed with huge separation columns, automated 2D gel spot pickers, 45 Bruker ion trap mass spectrometers — even a Bruker MALDI TOF-TOF spectrometer for research purposes.

The facility’s mere appearance illustrates GeneProt’s potential strengths, as well as potential weaknesses. Having pumped $6 million into a redesign and what was at the time state-of-the-art equipment, GeneProt positioned itself to extract value from its differential proteomics experiments. But with the Geneva operation dedicated mainly to its one big pharma client — Basel-based Novartis — GeneProt needs additional partners to fuel its expansion into the US, and ultimately reach profitability.

Certainly the company’s Swiss base is a good start. Majestic view of snow-capped Alps aside, the scale and comprehensive treatment for applying proteomics to discovering protein drug targets is a testament to the founders’ vision. In addition to its capabilities in protein separation and identification, GeneProt has a separate lab across the building to synthesize the white powders of man-made proteins it delivers to Novartis.

But the most striking feature inside the building is the distribution of employees across the five floors of the 50,000 square-foot former oscilloscope factory. GeneProt prides itself on its hardware, but most of its 110 employees are concentrated in a room filled with computers for bioinformatic analysis.

GeneProt CEO Cédric Loiret-Bernal claimed the company generates almost 20 terabytes of data every six months. Most data are the result of work on a contract signed in October 2000 with Novartis to study three undisclosed diseases. Novartis provided GeneProt with serum samples from healthy and diseased patients, and GeneProt combined each set of samples into two separate 10-liter fractions for each disease. To separate and identify the differentially expressed proteins, the company uses 2D gels and liquid chromatography, followed by MALDI-TOF and ion trap mass spectrometry.

But the problem for GeneProt is where to find the next source of samples. Loiret-Bernal said the company intends to take drug discovery step-by-step: first find pharma partners willing to fund fee-for-service projects, earn revenue from milestone payments and royalties from successful drug candidates, and only then start off on its own drug discovery initiatives. GeneProt has seen some revenue from delivering the first six candidate protein drug targets to Novartis in January, but the company is still searching for the next pharma company to follow Novartis into the fold. “A lot of confidence will be built from our partners’ successes with our first delivered proteins,” he said.

According to Loiret-Bernal, the issue is one of capacity. With the Geneva facility busy handling the Novartis contract, other pharmas are waiting until GeneProt completes its US facility in North Brunswick, NJ, before committing to multi-million dollar research deals, he said. But there’s a catch: while Loiret-Bernal said he hopes to have the New Jersey site up and running before the fall, he would rather not have the extra capacity laying idle. “We don’t want to be running [in New Jersey] without a big customer,” he said. In other words, GeneProt has until the fall to sign its next big client.

This may not be as hard as it sounds. Loiret-Bernal said representatives from eight different pharmaceutical companies are scheduled to visit Geneva over the next four weeks, and if GeneProt continues to make progress in its work with Novartis — and if Novartis finds GeneProt’s candidates clinically relevant — other pharma companies may follow their lead. Furthermore, establishing a base in New Jersey will certainly help the company’s chances for landing customers, as the state is home to 45 percent of the world’s pharma R&D budget, Loiret-Bernal said.

The fact that some pharma companies, such as Bristol-Myers Squibb and Roche, have developed their own extensive in-house proteomics programs also does not faze Loiret-Bernal. He estimated that there are at least 30 pharma companies spanning the US, Europe, and Japan, and only a few have devoted the resources and manpower to building initiatives in proteomics. “There aren’t 30 [people like Roche director of proteomics] Hanno Langen,” he said.

In the meantime, GeneProt is “on the verge” of completing a mezzanine round of financing from private capital sources, with the aim of raising another $40 million in addition to the $145 million raised since the company’s founding, Loiret-Bernal said. The money isn’t necessary for completing GeneProt’s New Jersey facility, he added, but for current operational needs and the possible purchase of new technology. As for an IPO, “We’ll be ready when the markets are ready,” Loiret-Bernal said. “We’re not desperate.”

To achieve his stated goal of becoming profitable within two to three years, Loiret-Bernal set out his task: “Today, we need to focus on building our client base, expanding in the US, and delivering everything we’ve promised to pharma and our shareholders.”

— JSM

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