This story originally ran on Dec. 7.
By Tony Fong
Nano-proteomics technology development firm Cell Biosciences today announced that it has acquired sample preparation firm Protein Forest for an undisclosed price in a deal designed to accelerate its growth in the proteomics space.
In connection with the all-stock transaction, Cell Biosciences said it raised an additional $4 million in equity financing. Novo A/S, an existing investor in the firm, led the financing round.
The purchase follows Cell Biosciences $20 million acquisition in October of imaging company Alpha Innotech [See PM 09/17/09] and caps off what its lead executive called a "transformational year" for the firm.
When 2009 started, the firm had undergone a complete revamp of its top management. And while it had placed an earlier iteration of its technology, now called NanoPro, in several labs, the technology had not been launched onto the market.
"We started the year with just 30 to 35 people really just focusing on getting the first NanoPro product out," Tim Harkness, president and CEO of Cell Biosciences, told ProteoMonitor today. "Today as we … post this acquisition, we're at 110-plus people; we are distributing directly in the US, Europe, India, China, Japan, [and] Korea."
Having gone through three financing rounds, the privately held company is "well capitalized" for 2010, he said, and in the coming year, he expects Cell Biosciences to generate about $30 million in revenues, which would make it cash-flow break-even.
Meanwhile, Protein Forest, based in Lexington, Mass., was making its own transition, and in October announced two deals — one with Pressure BioSciences, another with the North East Proteome Analysis Facility in the UK — that marked its shift to full commercialization operations [See PM 10/23/09]. Both deals cover co-marketing and sales of each companies' products and services. The agreement with NEPAF also includes development of workflows and applications for the ProteomeChip technology, Protein Forest's lead product.
According to Harkness, the ProteomeChip had started to ramp up in terms of sales, "but it needed additional infrastructure to get to the broader market and Protein Forest had to make a decision to invest on its own … or find a transaction like this, and it chose the latter."
While there may be additional tweaking of the chips, they are mature and robust and Cell Biosciences is making them immediately available for purchase, Harkness said.
Russell Garlick, who had been president and CEO of Protein Forest, has left the company, Harkness said, and on deadline could not be reached for comment. It is unclear how many employees Protein Forest has or how many will be retained by Cell Biosciences. The firm is in the process of making that decision, Harkness said.
Cell Biosciences is also evaluating Protein Forest's two deals with PBI and NEPAF. "We have to make sure we have the right distribution network going forward," he said.
Formed in 2004, Cell Biosciences has spent the last few years developing its NanoPro nanofluidic technology, used for protein analysis. The company's first instrument, the Firefly 3000, was introduced in April 2006. Though it was placed in a few select laboratories, it was never commercialized.
The company's first commercial launch, with the CB 1000 instrument, was done this past April [See PM 04/16/09]. The instrument, which sells for about $200,000, uses a capillary filled with a sample, separation buffer, and standards. Proteins are separated by isoelectric points based on isoelectric focusing. The capillary is exposed to UV light, which activates cross-linking chemistries and immobilizes the proteins. Primary antibodies and horseradish peroxidase-labeled secondary antibodies are used to probe specific proteins.
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Detection reagents are flowed into the capillary and produce chemiluminescent light, which is captured with a CCD camera, digitized, and quantified.
The next generation of the CB1000, which will be called the NanoPro100, is slated for launch in the second quarter of 2010, Harkness said.
Having made its initial entry into the commercial market, the company is now aggressively pursuing M&A deals as a growth strategy. Cell Biosciences' purchase of Alpha Innotech added digital imaging systems to its portfolio, including gel and fluorescent imagers and small volume spectrophotometers.
And the deal announced today adds a sample prep technology to Cell Biosystems product line.
ProteomeChip uses parallel isoelectric focusing to fractionate proteins and peptides for mass spectrometry-based analysis and Western blotting. Proteins and peptides are charged "in an environment that is either above or below their isoelectric points, allowing them to migrate in an electric field," according to Protein Forest's website. The proteins or peptides travel through the ProteomeChip between the acidic and basic sides of the chip, and once they hit a plug near their isoelectric point, they become neutral and will no longer migrate. They become enriched and will separate from other proteins with different isoelectric points.
The technology is meant to replace longstanding approaches such as IPG strips and 2D gel strategies, as well as strong cation exchange chromatography.
Harkness said that the lack of reproducible sample-preparation methods and technology has been one of the more pressing bottlenecks in proteomics, and called the ProteomeChip "a powerful solution for this market need."
Cell Biosciences, he said, has had its eye on the sample-prep space for some time and the ProteomeChip was a "perfect technology fit" for the company because its own NanoPro technology is based on IEF separation methods. Once the company acquired Apha Innotech, Protein Forest and its technology became a more "compelling" acquisition target, Harkness added.
"Having multiple protein detection technologies through imaging and NanoPro made the addition of [a] sample prep [method] that can be used on both more attractive," he said.
The Protein Forest acquisition also is part of his company's goal of becoming a pure-play protein-analysis firm by combining traditional techniques such as imaging with "novel revolutionary" methods such as its NanoPro technology and the ProteomeChip technology, he added.
In particular, Cell Biosciences plans to investigate methods to simplify Western blotting, which he called important yet "cumbersome."
"The type of information you get from it is not quantitative, it is really not adequate, so I think it's a combination of two things — of providing better data and [making] the technique simple," Harkness said. "And I think we have the potential over the long term [to use] our current technology platform to do that."
He did not elaborate.
Harkness said that even with the addition of the ProteomeChip, Cell Biosciences will continue exploring other sample prep methods. Similarly, it is interested in expanding its protein analysis capabilities.
"We'll also continue to assess other protein analysis techniques and other protein sample prep techniques in terms of building the company through inorganic growth," he added.