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Helicos Begins Manufacturing HeliScope, Will Ship First Units to Select Users By Year’s End

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Helicos BioSciences said this week that it has started manufacturing its HeliScope sequencer, and plans to ship its first instruments to a number of selected users by the end of the year.
 
“We are in the process of collecting our first order, or maybe orders, soon,” Steve Lombardi, Helicos’ chief operating officer, told In Sequence this week.
 
The first customers, who will pay for their instruments, will be part of a so-called “confirmation test-site program” designed to test the company’s product, procedures, and customer support.
 
Helicos will select these customers based on their ability to work with new technology, available funding, and their interest in the platform.
 
“We have lots and lots of interested customers willing to be part of the program,” said Lombardi, but the company has not yet decided how many early-access customers to take on.
 
Following the test-site program, the company plans to roll out its instrument more broadly next year.
 
Towards the end of this year, Helicos also plans to discuss results from its scientific collaborations. So far, it has only disclosed one research partnership, with the Institute for Systems Biology.
 
In general, collaborations have been focusing on RNA analysis and transcriptomics, according to Lombardi. “If you read what’s [coming] from the ENCODE project, there is a huge amount of interest right now in transcript analysis beyond protein-coding genes, and we have a lot of activity in that area,” he said.
 
Right now, the company is focusing on launching the HeliScope. While some of the instrument specifications are known, others have yet to be determined.
 
For example, the price for the system is not yet known. “Why set our price now, and set expectations based on market dynamics that most probably will change in the next [few months]?” Lombardi said.
 
Likewise, the company has not yet determined the pricing for supplies and reagents to sequence on the HeliScope. In a filing with the US Securities and Exchange Commission in conjunction with its recent initial public offering, Helicos said it would initially lower the cost of sequencing, in large projects, more than 100-fold from Sanger sequencing, which genome centers and sequencing providers offer at between $1 and $3 per kilobase. This would translate to reagent and supply costs of around $10,000-$30,000 per gigabase.
 
“But we think there is another [hundred]-fold increase in performance we can get out of the instrument with chemistry and flow-cell improvements,” Lombardi said, which would result in a cost of $100 to $300 per gigabase.
 
Illumina has quoted $3,000 in reagent costs for a one-gigabase run, and ABI has said it would charge about $3,000 per gigabase in reagents for its SOLiD platform, depending on the application.
 
In terms of throughput, Helicos projects 25 megabases per hour for DNA sequencing, and 90 megabases per hour for transcription analysis. The run time has not yet been determined, so the total output per run is not known yet. “There are three or four instrument parameters that are still being optimized that will have a big say in where the length of the run will be,” Lombardi said.
 
However, the output will be on the order of gigabases per run for DNA sequencing, he said. The reason why the throughput in sequencing mode will be lower than in gene-expression mode is that the system will sequence each individual strand twice in that mode in order to increase accuracy, a strategy Helicos calls a “dual read path.”
 
After sequencing once, the researchers melt off the newly synthesized strand and sequence the same strands again. Lombardi did not state a specific accuracy, but said that “it will be good enough for the applications that we go out with,” such as sequencing specific genomic regions.
 
For transcription analysis, tens of thousands of different transcripts, or signatures, can be analyzed in a run. “It’s going to be very, very cost-effective versus other technologies” such as microarrays and competing sequencing technologies, according to Lombardi.
 
The system’s median and mean read length is 30 bases, he said.
 
The instrument has two flow cells, each with 25 channels that hold 60 million strands, or 3 billion strands in total. How many of these will yield usable sequence data depends on the application, Lombardi said.
 
The performance will likely increase over time without the need for hardware upgrades, he said. Throughput could go up to a billion bases per hour with the current technology. Using new technology from co-founder Steve Quake’s lab that Helicos just licensed, the instrument has a “theoretical capacity” of 4 gigabases per hour, according to Lombardi.
 

“There are not a lot of competitive barriers to entry in this research market, and there is lots of money, and there is lots and lots of interest in genomics.”

“That’s a huge amount of head room with just chemistry improvements and improvements to the flow cell,” he said. Based on these projections, “we believe that we have got an instrument that can get to this proverbial $1,000 genome.”
 
While the company is currently focusing on the launch of its research-grade instrument, it has its eyes set on diagnostic applications. “This is going to greatly accelerate both basic research and clinical research, and we think very much accelerate the translational research that’s happening,” Lombardi said. “[Diagnostics] is in our vision; it is not at all in our operational framework [right now].”
 
Public Eye
 
Through 2008, the company expects to survive on the $43.2 million it raised in its recent IPO (see In Sequence 5/29/2007). Helicos decided to go public early this year because it needed cash for commercializing its instrument and saw advantages in being publicly traded.
 
“When you have venture funding, you always know that the VCs need an exit strategy, so you always know that you either are going to be acquired or go public at some point,” said Louise Mawhinney, Helicos’ chief financial officer. “And getting it behind us gives us more flexibility in the future, because now we are a bona fide public company. And in fact, just the status of being a public company attracts attention from the point of view of potential customers.”
 
So how does Helicos believe it will do in the face of stiff competition from several other next-generation sequencing vendors? “What usually happens in this space is, the best technology wins out,” Lombardi said, pointing to ABI’s 3700 sequencer taking over the market in 1998, even though it was launched more than a year after Amersham Biosciences’ MegaBace platform. At the time, Lombardi managed ABI's DNA sequencing and genetic analysis business.
 
“There are not a lot of competitive barriers to entry in this research market, and there is lots of money, and there is lots and lots of interest in genomics,” Lombardi said. “And we think this is not a market that’s going to be played out in the next six to12 months, it’s going to be played out over the next few years. It’s a fascinating time.”

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