Pharma and diagnostics giant Roche Holding AG, of Basel, Switzerland, has acquired Seattle-based Stratos Genomics Inc., an early-stage sequencing technology company, in a move aimed at advancing development of Roche’s nanopore sequencer. Financial terms of the deal, which was first reported on Friday, were not disclosed.
Founded in 2007, Stratos Genomics’ chemistry – sequencing by expansion (Sbx) – converts DNA molecules into expanded molecules, or xpandomers, using a technique similar to replication via polymerase. The company has raised just shy of $56 million in more than eight rounds, according to Crunchbase, the most recent a $20 million series B in 2018 led by Fisk Ventures.
Once fully developed, the Sbx chemistry will provide for multiple targeted clinical applications, as well as whole exome and whole genome sequencing, Roche said.
Roche has been crafting its nanopore sequencing platform since 2014, when it bought Genia Technologies Inc., of Mountain View, Calif., and its DNA sequencing technology for $125 million in cash plus $225 million in potential milestones. Still in development, the nanopore sequencer will employ a innovative approach that combines electronic and biological components to sequence DNA efficiently and cost-effectively for diagnostic testing.
Roche said its goal in acquiring Stratos Genomics is to create an end-to-end sequencing solution beginning with a patient sample and ending with a diagnostic result.
“Roche is dedicated to creating innovative diagnostics for the most challenging clinical conditions with techniques that are tailored to individual genetic and disease profiles. These solutions address the demands of research and clinical practice to deliver on the promise of personalized health care for patients,” said Thomas Schinecker, Roche Diagnostics’ CEO. “We look forward to further advancing our sequencing technology as we move to the next generation of health care and welcome the world-class scientists and employees from Stratos Genomics to Roche.”
Roche’s interest in the Seattle startup goes back to 2014, when it injected $5 million into a series B round that included $10 million from existing investors. The investment, which included another $10 million based on milestones, was part of a two-year research partnership focused on Stratos’ Sbx chemistry. Since then, the two companies have engaged in additional collaborations.
In 2017, Stratos Genomics reported a major milestone by sequencing expandable nucleotide-based xpanomers in a nanopore. The demonstration triggered a $10 million payment by Roche, as well as $5 million from Fisk Ventures.
“Both companies have made numerous improvements to their respective technologies that, when combined, will help us realize the objective of becoming the new gold standard in high-throughput, accessible sequencing solutions,” Roche spokesperson Karsten Kleine told BioWorld. “The acquisition will enhance our broad portfolio of products for various stages of the sequencing workflow, which currently largely serves the translational research and laboratory-developed test markets.”
Roche has a number of well-established offerings for the research market, including Kapa library prep kits for use with Illumina next-generation sequencing (NGS) systems, as well as newer products such as the Navify Mutation Profiler, Kapa Target Enrichment portfolio, Avenio Millisect and Avenio assays. The next generation of NGS technologies will focus on capabilities such as target enrichment, automation and distributed kit software, Kleine said.
The Stratos Genomics further expands Roche’s footprint in personalized medicine. In 2018, Roche bought up outstanding shares in Foundation Medicine Inc. (FMI), of Cambridge, Mass., in a cash deal worth $2.4 billion, after acquiring a majority stake for $1.05 billion in 2015. FMI’s Foundationone CDx in vitro diagnostic is the first U.S. FDA-approved companion diagnostic clinically and analytically validated for solid tumors. The pan-cancer detection system received breakthrough device designation and was approved as the first comprehensive genomic profiling assay for all solid tumors incorporating multiple companion diagnostics.
Stratos Genomics currently has about 60 employees and contractors. They will remain at the Seattle office, working closely with Roche’s research and development arm.
“We are thrilled to join the Roche family, which will allow us to combine our unique sequencing by expansion chemistry with the Roche nanopore sequencer,” said Mark Kokoris, president and CEO of Stratos Genomics. “With our combined expertise and complementary technologies, we are well-positioned to open the path to deliver scalable, high-performance sequencing to clinicians and researchers.”