By Brady Huggett
U.S. Genomics Inc. completed a $17 million Series B private placement, giving this company born in a dorm room the means to make its platform known.
The placement was led by HealthCare Ventures, of Cambridge, Mass., and included existing investors CB Health Ventures LLC, of Boston; Still River Fund, of Boston; and several private investors. In connection with the financing, which increased U.S. Genomics' total funding through a seed and two rounds to $23 million, Augustine Lawlor, a general partner at Healthcare Ventures, joined U.S. Genomics' board.
"We will use [the funds] mainly for commercial development," said Eugene Chan, chairman and CEO of U.S. Genomics. "And we'll use quite a bit for our engineering and scale-up of technology."
U.S. Genomics, of Woburn, Mass., should have two years of operating power under the funding, Chan said, adding that the company has a fairly low burn rate because it hasn't ramped up yet.
U.S. Genomics' story is inspiration to dropouts everywhere. From 1996 to 1998, Chan worked his way through the rigors of the joint Harvard and MIT MD Health Sciences and Technology Program. But something wasn't right, he said.
"For me, the reason I went into medicine was to do something to impact medicine and health care," Chan said. "Somewhere in medical school I realized the best way to do that was to leverage my talents with my background of genetics, physics and chemistry." So he dropped out.
The idea for the technology that grew U.S. Genomics was conceived in Chan's dormitory, but he didn't begin to work on it until he received venture funding. In August 1998, he brought on board his brother, Ian Chan, now chief financial officer and vice president of corporate development, and the two have been at it ever since, building U.S. Genomics up to its current size of 35 employees.
"I think there is an automatic level of trust [with family]," Chan said. "Working with siblings is either really great or its bad, and we knew this was going to be great. A large part of building a company is how the management comes together and works together."
Chan said the company's major accomplishment thus far has been taking the technology from the conceptual stage and redesigning the process of how genetic sequencing is done. Its immediate plans are hiring more scientific talent and setting up partnerships, allowing people to "gain access to our technology," he said.
Its platform, GeneEngine Detection Technology, and the accompanying DNA Delivery Mechanism software, is based on the perfect model - nature.
"It is patterned after the way the body reads DNA," Chan explained. "During the process, the genome is read and written in 30 minutes and doesn't cost anyone $3 million. It tracks the DNA at high speeds, 10,000 to 30,000 base pairs per second. That is beautiful and elegant and one of the most efficient methods available."
The platform is designed to linearize DNA and permit the direct reading of the genetic material without damaging its integrity. This expands the read lengths for which DNA can be analyzed. Conceiving the platform would not have been possible without Chan's varied background.
"We have lifted some technologies from other fields," Chan said. "Technology from the optic side, from the fabrication side, technology used to look at stars. Stuff from outside the biology world.
"Our company is really a technology research company with lots of things going on," he added. "As far as integrating these technologies from other industries, we are the only guys doing it. It makes it exciting." n