By Matthew Willett
Epigenomics AG plans to bring its Fifth Base Genomics approach to individualized medicine to the U.S. with proceeds from its second round of financing, a EUR28 million (US$24 million) private placement.
The Berlin-based company uses a minute difference in a particular DNA base, cytosine, to detect information on gene regulation and expression. It produces genomic patterns of cytosine methylation called a Digital Phenotype to describe and predict cell behavior using DNA chips, MALDI-TOF mass spectrometry and neural network algorithms.
Epigenomics CEO Alexander Olek said the company is perched on the edge of expansion into an almost unlimited market.
"What we do is read the methylation pattern, and the methylation pattern perfectly reflects the expression pattern," Olek told BioWorld Today. "Wherever there's an application for a microarray there's an application for our methylanalysis."
Olek said the company will use the proceeds in four ways, including an all-important expansion to the U.S.
"One thing is further development of the technology, increasing the throughput, producing better databases and making a better interface for researchers," he said. "Our gold-rush project is going through the entire genome and catching as much variability as we can, and the third is continuing proof of principle."
He added that Epigenomics will pursue a strong business development strategy that includes crossing the Atlantic.
"We're going to be a presence in the U.S. in January at the latest," Olek added. "That's important, it's very important. We must fully exploit that. To fulfill our potential we must be a fully international company."
The financing was led by Deutsche Venture Capital Gessellshaft; MPM Asset Management, of Cambridge, Mass.; 3i, of London; and Abingworth Management, of London.
Olek said the financing was oversubscribed three times, and may have gone five times oversubscribed if allowed. He said the inclusion of Abingworth is a validation of the company's chances for success.
"Abingworth has a reputation of not investing in the wrong company, and they found us worthwhile," he said. "Abingworth has that reputation of never having had a failure in their portfolio, so that makes us really proud."
Competitively, Olek said his company is more or less alone in its field.
"We have a patent on everything that could be applied to do this high throughput," he said. "We have a fundamental patent on analyzing methylation, on microarrays for methylation analysis and the related mass spectrometry. We do think that none of the genomics companies can start a program like this without infringing on our intellectual property. We're going to be alone for a while."
And the market for methylanalysis is wide, he said. "It's hard to predict because it's so vast. It's a question of focus, not volume. Take Affymetrix's chips, and the expression market in general, and that's the market volume."
He added that Epigenomics will pursue partnerships to build a platform of information provision.
"There's a business model of partnering, offering lead-specific deals to pharma companies to generate data for clinical trials. Methylation is a perfect surrogate marker for very many things - drug influence, environmental conditions. There are many things that we can do as information providers for pharma and biotech."