By Karen Pihl-Carey

Using a technology to alter the genome of host cells in order to produce organisms with particular output traits, a new genomics biotechnology company has emerged in Philadelphia.

Morphotek Inc., which raised its seed financing last month, is a company focused on its in vivo gene-altering platform technology, also known as morphogenics. Morphogenics accelerates the evolution of a host organism's genome, resulting in a diverse offspring pool. The organisms are selected using Morphotek's model systems to identify subtypes that exhibit commercially valuable output traits.

"We could start with a parental cell that has a very fixed feature," President and CEO Nicholas Nicolaides said. "Then, we could use our technology to increase the genetic evolution of that host to produce an output trait."

For example, the company could take a plant that was not drought-resistant, use morphogenics, and then create offspring that would grow in drought-like conditions. Morphotek researchers could then compare the genomes of the hosts to find out what's important in making the plant drought resistant.

"The concept of the company," Nicolaides said, "was to form a biotechnology company that could support the growing needs of the genomics industry as a whole. Where genomics is an important industry and it has the technology to identify genes, there's still an unmet need to understand what those genes do and how they can produce commercially viable products. And that's where our company comes into play."

Two weeks ago Morphotek announced it raised $2 million seed capital in an equity financing led by Allan Bedwick, president of the Philadelphia-based Bedwick Capital Management. The company also received a competitive Innovation Fund award from the Ben Franklin Technology Partners of Southeastern Pennsylvania. Nicolaides said the financing will allow the company to complete the development work of its technology for use in pharmaceutical, agricultural and chemical applications. The company is a resident partner of the Port of Technology, a biotechnology business incubator at the University City Science Center in Philadelphia.

Formed in September 1999, Morphotek was founded by molecular geneticists Nicolaides, Philip Sass and Luigi Grasso. Morphogenics was invented by Nicolaides, Bert Vogelstein and Kenneth Kinzler at the Johns Hopkins University.

"I was at Johns Hopkins in 1996, so they owned the patent rights to the original invention," Nicolaides said. As a result, Morphotek signed an exclusive license agreement earlier this year with Johns Hopkins University for the use of morphogenics to generate commercial products. Morphotek, however, has developed additional products and reagents that Johns Hopkins does not own patent rights to, Nicolaides said.

Nicolaides and Sass, the company's executive vice president and chief operating officer, said Morphotek's technology could generate a wide variety of commercial products. "We have technology already that we can apply directly to plants. We already have data for mammalian cells," Sass told BioWorld Today. "So it's really a broad-based technology."

"It allows us to bypass the bottleneck of cloning genes in trying to understand their function," Nicolaides said. "And it allows us to make biological products much quicker than a more standard traditional genomics approach."

Nicolaides added that Morphotek is not in competition with other genomics companies, such as Celera Genomics and Human Genome Sciences Inc. He believes the morphogenics technology is somewhat complementary to such companies because it can uncover the function of genes, instead of simply identifying them.

"Our strategy is to go out to the various pharmaceutical companies, genomics companies, and tell them about our process," Nicolaides said. The technology can help elucidate the mechanisms of the genes the other companies have patented, and help in developing commercial products. In return, Morphotek will sustain itself with up-front payments, research and development funding and milestone payments, Nicolaides said.

He expects the company will begin marketing the technology by December. To date, the company has filed five patents that cover the use of its technology across species ranging from microbes to plants and mammalian cells.

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