By buying VisiGen Biotechnologies for $20 million, Invitrogen hopes to ”bolster” its existing third-generation sequencing program, CEO Greg Lucier said in an investor call last week, during which the company announced the acquisition.
The main reason behind the acquisition is VisiGen’s intellectual property, said Lucier. “This acquisition, although small in nature, significantly enhances our intellectual property portfolio in this important area” and “complements our own work and increases our confidence that we will be the leader in the new genomics era unfolding before us,” he said during Invitrogen’s third-quarter conference call last week.
“The way that Invitrogen’s program is proceeding, the intellectual property of VisiGen greatly complements the fairly large and growing intellectual property estate we have been building,” added Lucier. “That was the primary reason that we acquired VisiGen.”
He also stressed that VisiGen has “some particular strength in a couple of areas in enzymology and some other areas that also complements the large and growing team we have in single-molecule sequencing development.”
Closely held VisiGen had been developing a real-time, single-molecule sequencing-by-synthesis technology that is based on measuring interactions between a labeled polymerase and gamma-phosphate labeled nucleotides using fluorescence resonance energy transfer.
VisiGen currently holds two US patents. No. 7,211,414, entitled “Enzymatic nucleic acid synthesis: compositions and methods for altering monomer incorporation fidelity,” was granted in May 2007 and covers labeled nucleotide triphosphates and their use in sequencing and other assays.
The second patent, No. 7,329,492, entitled “Methods for real-time single-molecule sequence determination,” was granted in February and discloses a sequencing method that involves engineering of a polymerase or deoxy nucleotide triphosphates with detectable tags.
VisiGen also has seven published US patent applications that include methods for inhibiting pyrophosphorolysis, analysis methods to classify single-molecule FRET events, surfaces to observe single molecules and to prevent fluorescent labels from photo-bleaching, modified nucleotides, and an apparatus for automated single-molecule sequencing using FRET.
Of the sequencing technologies currently being developed by other labs and companies, VisiGen’s is most similar to that of Pacific Biosciences, which is also developing a single-molecule, real-time sequencing-by-synthesis technology that uses a label at the gamma-phosphate position of the nucleotides.
In fact, documents from the US Patent and Trademark Office showing how VisiGen’s ‘492 patent was prosecuted reveal that the patent office initially rejected the patent’s claims, citing an earlier patent application by Jonas Korlach and colleagues, a co-founder of PacBio.
The company’s IP “was the primary reason that we acquired VisiGen.”
VisiGen’s patent was eventually granted, but only after the company’s CEO and founder, Susan Hardin, proved late last year that she had submitted a grant application to the Defense Advanced Research Project Agency before Korlach and colleagues filed their own patent application in May 2000 that detailed, among other things, the use of nucleotides labeled at the gamma-phosphate position in sequencing strategies.
PacBio declined to comment on the VisiGen patent estate per se, but vice president of marketing Martha Trela told In Sequence by e-mail last week that “we feel very comfortable in both our freedom to operate, and the breadth and scope of our own intellectual property portfolio with respect to single molecule sequencing technology.”
PacBio itself recently acquired technology and intellectual property relating to single-molecule sequencing from Li-Cor Biosciences, which also used gamma-phosphate-labeled nucleotides (see In Sequence 6/3/2008).
At the time, PacBio CEO Hugh Martin told In Sequence that “we need to make sure that we have all the intellectual property we need.”
VisiGen, which was founded in 2000, has been developing its FRET-based technology at the Wilbury Biotechnology Center in Houston. The company had planned to launch a sequencing service by the end of 2009, followed by an instrument release (see In Sequence 5/8/2007).
Sequencing service provider SeqWright, located in the same building, made an undisclosed investment in VisiGen in 2004 and committed to a follow-on equity investment in 2005. That second investment was a condition for Applied Biosystems to make an undisclosed equity investment in VisiGen in late 2005 and to begin collaborating scientifically with the startup.
SeqWright CEO Fei Lu told In Sequence by e-mail last week that in addition to its $20 million initial payment, Invitrogen plans to make additional milestone payments. She did not elaborate.
Invitrogen declined to be interviewed for this article, but Michael Hadjisavas, the company’s vice president of corporate business development, told In Sequence via e-mail that Invitrogen might provide further details next month after its merger with Applied Biosystems closes.
It is unclear how Invitrogen plans to integrate VisiGen into its loosely knit patchwork quilt of acquisitions. Invitrogen did not say during last week’s conference call whether it will take on VisiGen employees, whether the firm will remain in its current location in Houston, or what role CEO Susan Hardin may play at Invitrogen.
Eventually, Invitrogen plans to incorporate VisiGen’s technology into its own single-molecule sequencing technology. “The technology that will launch in the single-molecule space will be the Invitrogen platform,” said Lucier last week, adding that Invitrogen has not yet disclosed a timeline for this product.
“I would just say that it will be extremely competitive when, perhaps, other people have made promises, and we will be giving more details in 2009 on what we are actually doing in that area,” he added, alluding to PacBio, which said earlier this year that it plans to ship its first instruments to customers in the second half of 2010.