BioWorld International Correspondent

MUNICH, Germany - The steady trickle of German biotechnology companies finding venture backing does not threaten to become a raging torrent anytime soon, but fears in the sector that 2003 would turn out to be a dry year are slowly eroding.

Sloning BioTechnology GmbH, of Munich, raised €4.3 million in a second round of financing, joining companies such as Epigenomics AG, of Berlin, and Cellzome AG, of Heidelberg, both of which closed rounds in the past six weeks.

"Sloning stands for synthetic cloning," Octavian Schatz, the company's CEO, told BioWorld International. "In many ways, DNA cloning is still very much the process that it was 30 years ago, and we want to change that."

The company has developed and patented a process to enable the production of any gene or large DNA molecule at a rate the company says is about 10 times faster than current conventional procedures. The process uses standardized building blocks from an established library, which can be combined independently of their individual sequence. The company said its approach allows parallel synthesis of several gene variants and shows inherent error correction.

"The real difference to the current state of the art is the use of the library of building blocks," Schatz said. "Our library holds a couple of thousand building blocks. We are doing double-stranded constructions, as opposed to the more regular single-strand.

"The main advantage is that the process has an inherent error-correction ability." He added that the details are proprietary, "but suffice it to say that the way we ligate them leads to the formation of predominately correct intermediates." That builds correct genes and DNA more quickly, he said.

Schatz said that raising funds in the current market had indeed been difficult. "What made the difference is our technology," he said. "It's an absolute [novel method], the way we are doing DNA constructs."

The funding round was led by HBM BioVentures Ltd., of Baar, Switzerland, with additional investments from DEWB AG, of Jena, Germany, and 3i. The funds will be used to complete current trials of the products and to prepare for market entry.

"This is a small investment in biotech terms," Schatz said. "Eventually, however, it could be enough to take us to profitability.

"We are in principle going to have a product in a short time," he added. "In a sense our product is [custom] DNA, but this is part of a service. Customers specify what they want, and we deliver. The goal is to prove that we are much faster."

Delivering DNA is not the only approach that might work for the company. "We think ours is the only technology in this area that's fully automatable," Schatz said. "The next step would be to put the technology as a whole into the market and sell DNA synthesizers."

Sloning established partnerships in 2003 with MicroCoat Gesellschaft fuer Biochemische Produkte mbh, of Bernried, Germany, and Hamilton Bonaduz AG, of Bonaduz, Switzerland, to make machines and materials to automate its processes.

"Our customers will be the large biotechnology and pharmaceutical companies, the ones that handle the largest amounts of DNA cloning," Schatz said.