By Karen Pihl-Carey

With $8 million in its most recent financing deal and an aggressive goal to market its first product next year, Xanthon Inc. expects to increase its space and employees five-fold.

The privately-held biotechnology company, located in Research Triangle Park, N.C., started in 1996 with about eight people working in a 5,000-square-foot building. By this time next year, those eight people will become 80 to 100, and by this coming February, the office and laboratory space will grow to 26,000 square feet, said president and CEO Jim Skinner.

Xanthon is able to build itself based on its Electrochemical Detection System platform.

¿The company was co-founded by Holden Thorp, a professor of chemistry at UNC (University of North Carolina) at Chapel Hill, and myself in summer/fall of 1996,¿ Skinner told BioWorld Today. ¿The idea was to commercialize the electrochemical detection technique for nucleic acids. The technology directly detects the nucleic acid without labeling, and in many cases, without amplification.¿

That means there is no need for chemical labels, such as fluorescence or radioisotope tags, and the technology allows for the design of sensors that can detect certain nucleic acid sequences at relevant levels without amplification.

The product for mRNA expression analysis, expected to go to market next year, will provide at least 480 sequence specific assays for expression analysis in less than five minutes, while current available technology produces far fewer in an entire day, Skinner said. ¿Lead compounds can be identified much more quickly and be brought into the Phase I/Phase II process,¿ he said.

Xanthon intends to begin marketing the product to about 300 or so pharmaceutical companies in the third or fourth quarter of 2000, Skinner noted.

¿We¿re focusing our commercial efforts in drug discovery because there¿s a high need right now. There¿s a ready market for it, a significant need,¿ he said. ¿We¿re also able to get to market two years ahead than if we were going to the clinical diagnostics market.¿

The company is considering incorporating the electrochemical detection technology into biochips or formatting it into devices for clinical diagnostics in the laboratory or physician¿s office.

¿There¿s a relatively small molecular diagnostic-based market out there now, so there¿s not a great deal of commercial opportunity,¿ Skinner said. ¿That will evolve over time.¿ He said Xanthon¿s platform technology involves a simple technique that uses a mediator capable of transferring electrons from guanine, a constituent of DNA and RNA, to an electrode. The transfer generates an electric current indicating the number of nucleic acids present. An electrical potential is applied to the nucleic acids in the presence of the mediator, which is oxidized at the electrode and moves to the nucleic acids. Electrons are abstracted from guanine, Skinner said, and shuttled to the electrode.

Xanthon, a name derived from a portion of the oxidized product of guanine, received its seed money from a group of venture capitalists led by Intersouth Partners, of Durham, N.C. It received $3 million in its first two rounds and $8 million in its third round completed in May through a group of venture capital funds led by Noro-Moseley Partners, of Atlanta. Also involved in the most recent financing were Intersouth Partners, Franklin Street/Fairview Capital, the Aurora Funds, the North Carolina Technological Development Authority, Cordova Ventures and the Centennial Fund.

¿That funding will last us into approximately mid-next year,¿ Skinner said. ¿We are preparing to raise another round of capital that should close approximately in February.¿