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HTG looks to muscle up
TUCSON, Ariz.—Gene expression technology company High Throughput Genomics Inc. (HTG) announced in late October it closed the first tranche of its Series C financing. The most recent round was led by first-time investor Merck Capital Ventures and included existing investors Solstice Capital and Valley Ventures, as well as another first-time investor, Arcturus Capital. The $10 million raised in the latest financing is double the total HTG has raised since its inception in the late 1990s.
According to Kirk Collamer, company CFO, the money raised will be used to expand a number of different areas in the company including R&D for its tools, assays, reagents and diagnostics products, as well as add additional sales and marketing staff. In all, the company anticipates adding as many as 14 new positions at the company to augment its current staff of 18.
"With this money, we will start the development of the diagnostics platform. We received a couple of grants recently that are helping us—working with ASU's BioDesign Institute on that," says Collamer. "The money will be split roughly 40 percent for product development and R&D, 40 percent for investing in customer service, sales and marketing to increase awareness, and 20 percent gets split between the capital needed in house and for operating losses until we turn profitable."
In R&D, the company is looking to greatly expand its line of standardized arrays to roughly 50 or 60 from the 15 or so it currently offers. In addition, the company is looking to develop what Collamer calls a "super cocktail" of a few thousand genes that will allow HTG to quickly respond to its customers' demands for customized arrays. Total product development time for this segment of the business should last between 12 and 18 months.
In sales and marketing, the company will look to draw its customers from a wider swath of the market beyond the Big Pharma companies that have already adopted HTG's platform.
"With the focus we have had in the past with our custom product, we have been mostly targeted to large pharma with direct sales," says Collamer. "As we move forward, we would like to have collaborations and partnerships with those that are more effective with smaller companies and also the academic research market."
HTG has already made some moves in the direction of providing tools that have a lower price point and thus are more attractive to smaller biotechs and academia with the introduction earlier this year of its benchtop Firefly Imager and its catalog of off-the-shelf arrays.
Also, of the 14 new hires expected for the company in 2008, four will be dedicated to helping to develop new diagnostics for as-yet-unspecified diseases. Development of diagnostics, as well as consumable products, are important as HTG looks to diversify its offerings by leveraging its core technologies.
HTG's qNPA technology is used to carry out quantitative multiplexed, gene-based drug discovery programs, including target validation, HTS lead optimization, metabolism, toxicology and clinical development. HTG's ArrayPlate lysis-only qNPA platform allows scientists to test any sample, including fixed tissues, while avoiding the need for extraction or target amplification.
According to company CEO E. William Radany, Ph.D., who joined the company a little more than a year ago, the broad applicability of HTG's technology is what attracted him to the company.
"One of the reasons I joined HTG was that I recognized its signature method's potential to become a broad platform for lots of different applications, including proteomics and diagnostics," Radanay said in a December 2006 interview with Drug Discovery News. "We have demonstrated the method's application in protein assays, SNP analysis, RNA expression, RNAi and siRNA, as well as near-diagnostic applications for customers who use the assay to follow clinical trials. I certainly want to unlock this potential to build a successful broadly based business."
In addition, HTG named Harry George of lead investor Soltice Capital as its board chairman, a move that both frees Radany of corporate governance and provides a board leadership that is independent of company management.
"Solstice Capital recognized the magnitude of the economic opportunity of HTG early on," says George in a press release announcing the financing. "We had invested in this space previously and saw that HTG's technology offered significant performance and cost advantages over PCR (polymerase chain reaction), the gold standard for measuring gene expression. Solstice is pleased to be a part of HTG's growth and believes the company is now poised to accelerate."