By Brady Huggett

Staff Writer

GeneFormatics Inc. completed its merger with Structure Function Genomics LLC, picked up a worldwide license agreement with Rutgers University for enabling structural genomics technologies - and said it is just getting started.

"We are turning up the gas," said John Chiplin, CEO and president of GeneFormatics. "We are delighted at the strategic initiatives this merger gives us. It brings in a whole new era and this puts the company on a higher level of operation."

And, Chiplin said, the company was expected to announce "a major partnership" late Wednesday night.

The license agreement with Rutgers centers on the work of Gaetano Montelione in his lab at Rutgers. Through the agreement, GeneFormatics will have an exclusive, worldwide commercial license to new nuclear magnetic resonance (NMR) spectroscopy technology developed by Montelione.

"This technology was developed by Montelione, and he is a world leader in his field," Chiplin said. "This license gives us rights going backward and going forward as well. He is developing some new technologies that we will bring into the company that should make our high throughput even faster. And, he is collaborating with Jeff Skolnick [co-founder of GeneFormatics] and we should be making an announcement on the exact nature of their collaboration in the future."

Structure Function Genomics, of Princeton, N.J., focuses on high-throughput determination of macromolecular structure and function. Its technologies for rapid protein 3-dimensional structure analysis can be used to process protein sequence data from human and human pathogen genome projects and to assign functions to novel proteins. Its technology is expected to fit in neatly with GeneFormatics' focus.

GeneFormatics, of San Diego, uses in silico technology to determine protein function by building 3-dimensional structures from a protein's primary amino acid sequence. It then uses its proprietary Fuzzy Functional Form technology to identify specific function-correlated sites of interest in the structure.

The merger of the companies, terms of which weren't disclosed, and their respective technologies boost GeneFormatics' protein structure and function determination capabilities, Chiplin said.

"There are three areas of structural genomics: in silico mining, NMR and X-ray crystalography. Having in silico mining and NMR means we can get truly high-throughput structural genomics right now."

Physically, the merger will be part relocation and part status quo.

"What will happen is Prof. Montelione will stay at Rutgers," Chiplin said. "But the research and development aspect of the company will be further developed in San Diego. The part of the company that can be moved will be moved. All of the employees of Structure Function Genomics will be relocated to San Diego."

In October, GeneFormatics raised $15 million in a Series B round of financing, bringing its total funding raised to date to $19 million. Following the massive unlocking of genetic information by the Human Genome Project and other genome sequencing efforts, Chiplin said GeneFormatics is primed for further financings.

"Absolutely we see other financings in the future," he said. "Structural genomics is a hot area right now. We'll look at a C round in the future."

Chiplin would not comment further on the partnership announcement, but together, the three pieces of news back up Chiplin's statement of increasing the heat.

"This is fantastic," Chiplin said. "We signed up four customers in, I think, the third and fourth quarters of last year. We are the structural genomics company with customers. I hear many analysts say that our technology is validated by our customer base."