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Berkeley Lights Helps Researchers Connect Genomic, Functional Characteristics of Cells

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NEW YORK – Following its recent initial public offering, Berkeley Lights is moving forward with its platform to correlate cellular characteristics with cellular output. With a new transcriptomic assay launched earlier this year, the firm could help its customers better understand the relationship between genomics and biological function.

So far, the Emeryville, California-based firm has built its business by providing customers, usually pharmaceutical companies interested in antibody production, with the ability to trap and assay cells using proprietary, optics-based technology developed by Ming Wu, a professor at the University of California, Berkeley. The Beacon platform can trap up to 56,000 cells in so-called "light pens" and then assay them to provide data on cell shape, size, protein output, or other important features.

"We create the largest 'data cube' at the single-cell level," Berkeley Lights CEO Eric Hobbs said in an interview, explaining that the data the firm's customers are after exhibit a "volumetric aspect." Genomic data alone is only "a thin slice of that," he said, and having additional data types will be essential to customers whose products have the potential to be worth billions.

Along with new technology, Berkeley Lights is also bringing new purchasing models to life sciences. While customers can directly buy the Beacon platform, they must also purchase workflow licenses that are limited to a specific field of use. Licenses can be perpetual or annually renewed. Customers are also able to "subscribe" to specific workflows with a quarterly fee, giving them access to a particular workflow for a period of two to five years.

So far, however, licenses have not been a big revenue driver for the company. For the three months ended March 30, 2020, the most recent quarter for which detailed numbers are available, direct sales accounted for $9.4 million, or 69 percent of revenue, while the firm booked only $55,000 in subscription revenue, or less than half of a percent of revenue, for the same period.

Berkeley Light's success, though, has attracted attention from competitors. In July, Abcellera Biologics sued the firm in the US District Court for the District of Delaware, alleging that Beacon infringes eight Abcellera patents. Last month, Berkeley Lights countersued, asking the court to declare that its technology does not infringe Abcellera's patents, declare that all the patent claims are invalid, and award Berkeley Lights legal expenses and attorneys' fees.

Though antibody research accounted for about 86 percent of all Q1 2020 revenues, the firm has indicated that it also plans to be part of the growing synthetic biology market. Berkeley Lights has had a large presence at the SynbioBeta conference for years and is developing workflows for the field as part of a $150 million collaboration with Ginkgo Bioworks inked a year ago.

Commenting on the July IPO, Hobbs said the firm had been looking to raise money in 2020 and found that the demands of private financing in the COVID-19 pandemic environment made going public the more attractive option.

Since the $204.9 million upsized offering, shares of Berkeley Lights have more than tripled in value from the offering price of $22 per share, giving it a market cap of approximately $4.98 billion.

All that, for a technology that "most people didn't think could lead to serious applications," Wu said. 

Berkeley Lights spun out of UC Berkeley in 2011 to commercialize Wu's "optoelectronics tweezers," which his lab began pursuing around the year 2000.

"Initially it was curiosity-driven research," Wu said. "I was fascinated by traditional optical tweezers," developed by Arthur Ashkin, who won the 2018  Nobel prize in physics and died last month. Researchers had used that tech to track biological objects, but it required lots of energy and often damaged cells. Instead of needing a laser, Wu's method could use an overhead projector. "It was safer [and] you could trap a cell over a long period of time with much less damage to its genome," Wu said.

By 2007, the lab could capture 15 cells at once, each in an adjoining light cage. "They were still in close proximity and could sense each other, still exchange secretions," Wu said. "And we could observe them over multiple days."

Eventually, Wu met with Igor Khandros, who had recently retired as CEO of semiconductor firm FormFactor, where Wu was on the scientific advisory board (Hobbs also came to Berkeley Lights from FormFactor). Wu showed him videos of the trapped cells, which piqued Khandros' curiosity. "It's a very photogenic technology," Wu said. "Once people see the videos they get interested."

Along with financier Bill Davidow, Wu and Khandros spun out the firm in 2011 and Wu took a year off from his lab to work on the technology. Early on, the firm connected with Amgen VP of research Philip Tagari, whose input helped guide the technology towards commercial utility. "Before we built anything, he gave us a real insightful discussion about these [microfluidic] technologies," Wu said.  Tagari told the Berkeley Lights team about the coming importance of biologics and that they would need to be able to screen billions of cells. "We realized we were orders of magnitude short," Wu said. But the team worked to increase their scale and eventually developed a chip that could do thousands of cells.

The firm then inked a $2.5 million partnership with Amgen to help with cell line development. Success there led Amgen to seek Berkeley Light's help with antibody discovery. Now, the firm has antibody discovery or other deals with some of the biggest names in pharma, including Pfizer, Novartis, GlaxoSmithKline, Sanofi, Bayer, and Teva.

Wu eventually returned to UC Berkeley but remained involved as a consultant. He was on the Berkeley Lights board until the IPO this summer but has since stepped down.

The company introduced its first product, the Beacon platform, in 2016, which can run four chips at a time. This was followed by a desktop platform dubbed Lightning in 2019 that runs one chip at a time. Currently, Berkeley Lights workflows are, in broad strokes, the same across all end markets, Hobbs said, starting with a pool of cells that could produce something of value. "Inside that, there is a best cell to make a product. Our job is to help them find that cell," he said.

The OptoSelect chip technology helps isolate each cell into a nano pen, and microfluidics helps introduce media to keep them alive. "As the cells are living in the pen, we are deeply functionally characterizing them," Hobbs said. Diameter, circularity, and growth rate are just some of the parameters tracked by the system. Newer workflows can even introduce reporter cells to the pens and the OptoSeq kit is just one of 16 assays available to extract information on the cell.

These capabilities were an important development not foreseen when the company was born. "I didn't anticipate we could do so many different types of assays on-chip," Wu said. "Because the pen is so tiny, we get the assay results in minutes and hours." Doing the same assays on plates could take much longer. "It's an unbelievable speed-up in efficiency," Wu said.

Though antibody discovery has boosted the firm to its current success, addressing the synthetic biology market is in keeping with the firm's motto of helping researchers to "find the best cells," Hobbs said. "If you want to build an organism to do a particular job, you're going to need the program that controlled that piece of life and you're going to need to know what the outcome of that program was," Hobbs said. Only Berkeley Lights can "get those two data sets together at the single-cell level today." Functional testing is a bottleneck for companies trying to make products using cells as factories, and connecting their output back to genomics "will close the loop on the design-build-test cycle," he said.

Overall, synthetic biology was only worth $1.6 million of the firm's revenue in Q1, driven by its Ginkgo collaboration. "Berkeley Lights has been an expert and engaged development partner as we work together to develop innovative new uses of the Beacon platform," Ginkgo Cofounder Barry Canton said in an email. "Leveraging our joint technology has demonstrated interesting capabilities to grow and screen microbes on the platform." Hobbs noted that the firms are close to announcing workflows developed in their collaboration.

Revenue from cell therapy market was even less, just $400,000 in Q1. But in Berkeley Lights' prospectus filed with the US Securities and Exchange Commission ahead of its IPO, the firm said it was developing patient monitoring workflows that it hoped could be useful in the manufacture of cell-based therapies. "We also believe these workflows may have the opportunity to become companion diagnostics for cell therapies in the future," the firm wrote.

Hobbs clarified that the firm is pursuing patient monitoring "not so much in the interest of diagnostics as it is to help to accelerate and make cell therapy available." Monitoring patients could help identify challenges and improve efficiency in the design and manufacturing of such therapies, he said.

When asked if Berkeley Lights was interested in pursuing its own antibody discovery efforts, much as Twist Bioscience is doing with its biopharma division, Hobbs said only that "we enable our customers to accelerate the rate at which they discover antibody therapeutics."  

The firm is open to acquisitions "where it makes sense," Hobbs said. "If we can buy and not build, that’s where it makes sense. If something’s available and it increases our value, we look at those [deals.]"

Just in recent months, the COVID-19 pandemic has shown the immediate value of rapid antibody discovery efforts. For example, Berkeley Lights' technology was part of a suite of tools used by researchers at Vanderbilt University to deliver SARS-CoV-2 neutralizing antibody therapy candidates.

If Berkeley Lights' predictions about the value of cell-based products are right, they're well positioned to cash in on selling the tools to find the cells to make them and could have a huge lead on any followers.

"I don't think anybody is doing anything close to what we do," Wu said. "This is the benefit of starting from a totally different technology. We're just seeing the beginning. We haven’t seen the full impact yet."

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