Cyntellect said this week that it has received a phase II small business innovative research grant from the National Human Genome Research Institute to continue developing its laser-based transfection system for RNA interference applications.
The two-year grant is worth $1.5 million, and will support Cyntellect’s development of its LEAP platform. LEAP, or laser-enabling analysis and processing, uses a process called opto-injection to temporarily permeabilize cells so that a variety of molecules, including siRNAs, can be transfected. The system’s laser can also be used to destroy untransfected cells, so that researchers end up with a pure set of transfected cells.
According to the grant’s abstract, the phase II project is following up on phase I work wherein the LEAP technology was successfully used to opto-inject RNA- and DNA-based reagents into cells for RNAi. “Opto-injection compared favorably [in phase I experiments] to commonly used lipid-based transfection methods with respect to cell viability and transfection efficiency,” the abstract adds.
Under the grant, Cyntellect aims to continue optimizing the LEAP technology in different cell types; evaluate the effect of opto-injection versus other transfection methods on cell physiology; and implement functional genomics assays on the LEAP technology, the abstract states.
“With such data from phase II, a phase III commercialization effort would be enabled to promote adoption of the opto-injection approach to realize the potential that RNAi technology holds for advancing functional genomics efforts,” the abstract states.
The receipt of the $1.5 million brings the total amount of federal funding Cyntellect has received to $12.5 million, Claus Hakenesch, director of finance, told RNAi News. He added that the company hopes to add another $6 million to its coffers through a series C financing round. Hakenesch said that Cyntellect expects to close the financing round by the end of the year, which would put the company in a position to commercially launch the LEAP platform by the third quarter of 2005.
“Our commercial … projections are that about three quarters after we close the financing we’ll be able to roll out the LEAP instrument, and that will bring us to breakeven within six quarters,” he said.
As part of its effort to bring the LEAP technology to market, and to help bolster its efforts to attract investment dollars, Cyntellect has recently appointed Jim Linton as the company’s chief business officer.
Linton holds a PhD in genetics from Emory University and an MBA from the University of California, Davis. He said he has been involved with several small private biotech companies, helping them commercialize their technologies and arrange mergers with larger companies. Most recently, Linton served as vice president of business affairs and business development at Protometrix, which was acquired by Invitrogen in April, about six months after the introduction of its first product, a yeast proteome chip.
“It’s a mix of skill sets [that I bring to Cyntellect] for taking small companies and bringing them some focus and deals,” he told RNAi News. “My role [at Cyntellect is] to help the company crystallize its business model, and help deliver and execute relationships that will get us there.”
Relationships with other companies are something that have been key to Cyntellect’s business approach. The company has been gathering data about its LEAP system from users of beta versions of the system, and has been conducting in-house work for pharmaceutical collaborators that might purchase the LEAP platform.
The company’s most high-profile collaboration was one signed in November 2003 with Eli Lilly. Under that deal, which Hakenesch said has concluded, Cyntellect used its LEAP system to conduct RNAi transfection experiments for Lilly. Data from the experiments was provided to Lilly, which was to decide whether it was interested in purchasing a beta system for its own gene function analysis projects.
Hakenesch said that no such follow-up deal has been signed, but that “we are currently talking about further commercial agreements with [Lilly] and others.”
Using funds from another NIH grant, Cyntellect has also placed a beta version of the LEAP system at the University of Texas Medical Branch at Galveston, which is providing data to the company. Hakenesch said that this collaboration is still ongoing.
Cyntellect has been planning on selling commercial versions of the LEAP system for some time; President and CTO Fred Koller told RNAi News in October that he expects the system to be priced in the range of $500,000 to $1 million, similar to other high-end instrumentation. Linton said that the company is also thinking about providing contract services for customers as a long-term business strategy.
“We are … in active discussions with both academic and pharma institutions for custom collaborative relationships where … we would perform services for them using LEAP,” he said. “It may not be in the area of opto-injection per se; there are other application areas of this technology which could be amenable to custom services in the biopharmaceutical production space.”
As for going after a possible merger or acquisition — perhaps one similar to the Protometrix and Invitrogen deal — Linton said that Cyntellect is remaining focused on making it on its own.
“That’s always a possibility for every company, but at this point our goal is to get the technology out there and demonstrate to the customer base that there’s value,” he said. “We’re not relying on a buyout … [but] my guess is that over time those kinds of opportunities will rear their heads.”