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Helicos Finalizing ‘Acceptance Criteria’ for HeliScope Prior to Taking First Orders

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Helicos BioSciences officials last week reiterated previous statements that the company is working on obtaining its first orders for the HeliScope and that it plans to ship the first systems soon, calling these “key milestones” for the remainder of the year.
 
During the company’s second-quarter earnings call last week, the first such call after it went public this spring, officials said Helicos is currently establishing “acceptance criteria” for the instrument, meaning performance standards the instrument must meet at a customer site before the customer accepts the system. “Once the acceptance criteria have been agreed upon, we will be taking our first orders,” said CEO Stan Lapidus during the call.
 
At present, Helicos has several prototypes of the commercial HeliScope running at its own site in order to generate “the appropriate data to support the verification and validation protocols for the commercial HeliScope systems,” according to Lapidus.
 
The company has been getting “lots of interest from the major genome centers around the world,” said chief operating officer Steve Lombardi during the call. “We are in the process right now of talking to them and understanding who are the best candidates to be part of our test site period,” he said. “We will be making those decisions over the next few weeks as we build the performance criteria on the prototypes and are able to share those with them.”
 
Not only genome centers, but also “large academic health centers” have shown an interest in the machine, according to Lombardi. “We have had a lot of conversations with people outside the traditional genome centers,” he said during the call, noting that many of these groups have funding and samples for large-scale translational research that involves sequencing.
 
“These people, from our perspective, are seemingly willing to take chances, and will not wait for the thumbs up from the genome centers,” he added.
 
Helicos believes that the “simple workflow” of its system, which sequences DNA without prior amplification, is attracting potential customers to its platform. Lapidus called this feature “one of our key differentiators.”
 
He also stressed that the first version of the HeliScope, which promises a 100-fold improvement in price and performance over traditional Sanger sequencing, is only a starting point. Through improvements in the chemistry and disposable components, the system’s performance will likely become “substantially better” over time, he said. Customers “will be able to purchase the HeliScope instrument at our product launch and benefit from our process improvements for years to come without having to replace the original instrument.”
 
The company repeated last week that it expects the instrument initially to generate 25 million bases per hour for sequencing applications and 90 million bases per hour for digital gene expression applications. The system’s median read length is 30 bases. Helicos has not yet disclosed the output per run, sequencing accuracy, or the price for the instrument and reagents.
 
The company also addressed its ongoing development of bioinformatics tools to analyze the data coming off the HeliScope. “We based our informatics on an open source policy,” said Lombardi, adding that the company has “reached out to the [bioinformatics] community” to find out what its needs are, and has been getting valuable feedback.
 

The market for next-generation sequencing “is not going to be made in the next three to six or nine months — it’s going to be made over the next couple of years.”

The company’s goal is to align a human genome within 24 hours of obtaining the sequence data on the instrument, according to Lapidus, but there is no timeline yet in place for reaching that milestone.
 
Helicos is also making “great progress” on its library-free method for paired-end reads, according to Lombardi. The company has shown “proof of concept” for the method, but did not say when it will be introducing it.
 
In response to an analyst’s question about competition from Illumina and Applied Biosystems, which have a head start in the next-generation sequencing marketplace, Lombardi said that the company is “really confident that the combination of price [and] performance and the simple workflow is really going to win out,” adding that the market “is not going to be made in the next three to six or nine months — it’s going to be made over the next couple of years.”
 
Helicos, which had $64.3 million in cash at the end of June (see In Sequence 7/31/2007), expects to spend another $24.3 million or so during the remainder of the year, according to CFO Louise Mawhinney, mostly on manufacturing and other operational infrastructure, personnel, and product launch.
 
As of last week, Helicos had 94 employees, she said, 15 more than at the end of the first quarter.

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