By Mary Welch

Sequenom Inc. raised $37 million in a private funding round to support this year¿s launch of its DNA analysis technology for large-scale pharmacogenomics and research and product development applications.

¿We will be using the financing to complete the commercial launch of our DNA analysis products, and that involves building the infrastructure and completing the operations side as well as manufacturing, sales and services support, business development, marketing and customer service worldwide,¿ said Steve Zaniboni, chief financial officer.

¿We were well oversubscribed,¿ he said. ¿We started out with a target of $20 million and had to stop at $37 million. It could have continued. The response was overwhelming.¿

Equity participants included Nomura Securities International Inc., of New York; Deutsche Bank, of London; Haspa Bank, of Hamburg, Germany; Euroventures, of Amsterdam, the Netherlands; Vertex Capital, of Singapore; Alafi Capital, of San Francisco; and Value Management & Research, of Frankfurt, Germany.

Index Securities, of Geneva, Switzerland, served as a placement agent for a portion of the financing. Other investors included Techno Venture Management, of Munich, Germany; Alpinvest International, of Amsterdam; Global Life Sciences, of Munich; Dresdner Kleinwort Benson, of London; and S.R. One Ltd., of Wayne, Pa.

Founded in 1994, Sequenom developed a technology that can analyze large numbers of DNA samples against a well-defined and large set of genetic parameters. In other words, it compares thousands of individuals against a wide range of phenotypes and gene markers in order to draw correlations between individual genetic inheritance and medically or biologically important parameters, such as responsiveness to drugs, crop yields or who will develop cancer. The company, based in San Diego, combines miniaturized chip technology with high-fidelity enzymatic procedures and mass spectrometry.

Genetic Information Moved To Product Candidates

No other DNA analysis system contains all three of these elements, said Toni Schuh, executive vice president of business development. As a result, he said, Sequenom¿s technology solves three key technical issues associated with high-volume, comparative DNA analysis: speed, accuracy and cost. ¿The DNA MassArray converts genomics from an academic pursuit into a viable, industrial strategy for the development of tangible consumer products and services,¿ he said.

The company has two products, both of which will be commercially available this year. The DNA MassArray Basic System is a modular, semi-automated platform that includes an array mass spectrometer, a nanoplotter and a bioinformatics workstation. The DNA MassArray Automated Process Line (APL), which offers additional robotics and software to meet high-throughput demands in an industrial setting, is operational at its Hamburg facility. A second one will be ready in San Diego later this year.

The DNA MassArray APL bridges the gap between basic genetics information and the need to choose an economically viable product development path by quickly identifying which genomics targets, or genes, are suitable candidates for further study, the company said. Designed to be operated around the clock, it can analyze up to 10,000 genotypes per day, with a potential of up to 50,000 genotypes per day if tests are five-fold multiplexed.

¿The technology validates targets for the genomics world,¿ Zaniboni said. ¿You have all these genetic markers that provide the information on what makes people different. But you have to screen all these genes to find the markers. It¿s very precise.¿

The Spell Check Of Sequencing

Schuh likens the process to editing. ¿With genetics research you go through a person¿s genome map and then compare it to another¿s. They¿re the same except for about 0.1 percent, but that¿s the part that makes people different, such as why a person develops cancer. You keep screening and screening until you find the markers and then you analyze them. It¿s like proofreading. You search the DNA carefully, just like proofreading. You look over every word. Once you¿ve done that ¿ found the basics ¿ then you run it through spell check. It¿s faster and easier. You stop at every red line instead of every word. Our technology platform is the sequencing spell check.¿

The technology generates individually correct results based on the molecular weight of the DNA obtained through controlled enzymatic reactions, the company said, and also provides a higher resolution than present gel-based or hybridization-based DNA methodologies.

Sequenom doesn¿t take a narrow view of its potential market. ¿Anyone involved in life sciences in the broadest sense¿ is how Zaniboni described potential customers.

Added Schuh: ¿Anyone dealing in genomics and the validation of markers ¿ the whole area of industrial genomics.¿

Sequenom is the result of a collaboration among Hubert Koster, founder, president and CEO, who was also a biochemist and molecular biologist at the University of Hamburg; Charles Cantor, a biophysicist at Boston University; and Robert Cotter, a pharmacologist at Johns Hopkins University in Baltimore. The company has offices in Hamburg and Boston in addition to its San Diego headquarters. n