Proteomics start-up Kinaxo Biotechnologies has purchased its first liquid chromatography-mass spectrometry platform, allowing it to bring its protein-analysis services in house and expand its technologies and capabilities.
The purchase was made with Kinaxo’s second-ever round of venture capital funding and comes as it sees strong demand for its services, even as many protein-service firms have either dried up or are hanging on by their finger tips in the challenging environment.
The system consists of a Thermo LTQ Orbitrap hybrid mass spec and an Agilent 1200 high performance liquid chromatographer. Kinaxo paid €550,000 ($740,000) for the system, said Andreas Jenne, a co-founder and managing director of the company.
Spun out from the Max Planck Institute for Biochemistry in Martinsried, Germany, last July, Kinaxo is a services company that supports drug development efforts by using a technology that allows researchers to identify and characterize biological interactions between kinase inhibitors and their cellular protein targets. Kinaxo has an exclusive worldwide license to the technology, called KinaTor, which was developed by Henrik Daub and Axel Ullrich, researchers at Max Planck and Kinaxo co-founders.
Because the company has had no equipment on-site, it has relied on TopLab, a proteomics and protein-analysis research firm, to perform mass-spec work for it. But everything will be performed in-house once the LC-MS platform is installed and running, which Jenne said should happen by September.
The KinaTor technology is a two-step process: In the first step, affinity chromatography separates cellular targets of inhibitors from cell lysates. In the second step, the company uses mass spectrometry to identify target proteins.
“Basically we are supporting our KinaTor technology,” Jenne told ProteoMonitor recently. ”We have outsourced our mass spectrometry up to now, but now as we’re getting more clients and getting more customers, we see a need for having this mass spectrometry in-house.”
In addition, the purchase facilitates new quantitative phosphoproteome analysis technology Kinaxo offers. That technology was developed by Matthias Mann at Max Planck.
“Let’s say you are developing a drug and you want to know if the drug is in the cell, what’s happening to certain signaling pathways, whether they’re switched on or off,” Jenne said. ”You can measure this with the technology that Matthias Mann developed.”
Kinaxo is not in the business of developing any technology of its own. Its business model is to license and purchase technologies from others and then to apply them to the needs of the market.
“That is our strategy, to really use their smarts, people’s know-how — to commercialize [it],” Jenne said.
A Serviceable Model?
Kinaxo’s growth comes even as the feasibility of such firms built on protein-analysis services is mottled. Earlier in this decade when entrepreneurial scientists saw potential profits in proteomics, service companies such as Geneva Proteomics, MDS Proteomics, and Oxford Glycosciences sprang up hoping to capitalize on the opportunity, only to shutter their doors or scale back operations when the complexity of the science hastened a market retreat.
Today, the proteomics-services landscape remains muddied with both advances and setbacks marking the segment. Last yea, for example, BioMachines entered into a collaboration with the University of Massachusetts to offer protein-analysis services [See PM 07/20/06], and the UK-based NextGen Group last fall bought Proteomic Research Services to gain entry into the North American drug-discovery market [See PM 11/09/06].
But at the Brain Research Center in Vancouver, BC, anemic business forced it to abandon its protein-research services last fall [See PM 10/05/06].
Michael Pisano, chief scientific officer for NextGen and president of Proteomic Research Services, a wholly owned subsidiary of NextGen, said the trend has increasingly been for large pharmaceutical firms to outsource their protein-analysis work. He cited decisions by GlaxoSmithKline and Novartis in March to discontinue parts of their protein and proteomics businesses [See PM 03/29/07].
“For the moment, we are quite well equipped with the technologies that we have. But of course you can think of other technologies that may fit into our platform, so this will be the next step, to further broader [Kinaxo’s] technology base.”
“The mantra in pharmaceutical companies today is that if you can outsource it, outsource it,” Pisano said. “Especially things like what we do, where it’s high capital expenditure, specific expertise requirements, and things like that that cost the company more to keep internal than it does to outsource.”
For companies built around the protein services model, that trend can mean a bonanza, he said.
But Tom Larrichio, former CEO of BioMachines who is now in the process of starting his own protein services firm, said such companies still have to hustle for financing. While large pharmaceutical firms will outsource big projects, the number of such blockbuster opportunities remains scant. Work culled from smaller drug companies and biotech firms can provide some financial padding, but in the end “you need an anchor customer,” he said.
Kinaxo’s Jenne said the KinaTor technology separates the company not only from other protein analysis firms but also from a drug firm’s or biotech’s in-house analysis services.
“Most of the companies, when they develop a compound, they rely on in vitro assays,” he said. “Our approach is an unbiased approach. We go directly to the compound in the cell, and we look at the molecular level — which targets are hit by the compound and which pathways are switched on and switched off.
“We believe with our approach, we are very close to the real situation in humans because we take human tissues and do the analysis there,” he said. “So we think this is much more valuable than in vitro studies in buffer systems to look at isolated kinases. We are looking at the whole proteome to try to find out what the compound is actually doing in the human cell.”
Kinaxo was launched last July with initial funding of €600,000. The company closed a second round of funding earlier this month, though Jenne declined to disclose the amount raised. He would only say that the company is profitable.
In the past year, Kinaxo has entered into agreements with Schering AG to use the KinaTor technology for analysis of Schering’s small molecule kinase inhibitors; UCB to analyze its small molecule lead compounds in cells and tissue samples; and Johnson & Johnson Pharmaceutical Reseach & Development to analyze target selectivity for select small molecule compounds. Kinaxo most recently entered into an agreement with an undisclosed US drug company.
In addition to forging new collaborations with drug firms, the company remains on the lookout for new technologies.
“For the moment, we are quite well equipped with the technologies that we have,” Jenne said. “But of course you can think of other technologies that may fit into our platform, so this will be the next step, to further broader [Kinaxo’s] technology base.”