By Jim Shrine

Orchid Biocomputer Inc. established a $16 million lease-financing package it will use to further develop what company officials said is the most significant medical and commercial genetic analysis technology available.

Orchid, of Princeton, N.J., received $6 million from Oxford Venture Finance, of Alexandria, Va., and expects another $10 million upon near-term attainment of certain corporate development goals.

Orchid¿s platform was established through the combination of its ultra-high-throughput microfluidics technology with the single-nucleotide polymorphism (SNP) analytic chemistry and genetic bit analysis capabilities from Molecular Tool, a Baltimore-based company Orchid purchased in September.

¿It¿s just a matter of putting the financial resources to work and getting on with it,¿ said Dale Pfost, Orchid¿s chairman and CEO. ¿It¿s a commercial and scientific inevitability. This is the most exciting area of biotechnology.¿

Russell Granzow, the company¿s senior director of business development, said, ¿All the technology exists. With this lease financing, we are now ready to move forward.¿

The SNPs are at the heart of that opportunity. The company said SNPs have emerged as the most powerful variability markers for determining a person¿s propensity to disease, and how a certain drug will affect an individual patient. Pfost said the speed, accuracy and specificity of the technology offer many advantages over approaches such as DNA sequencing used to ¿score¿ SNPs.

Over the next few years, he said, Orchid will be filing for patents on the use of SNPs in the area of patient stratification ¿ or how particular drugs may not work, or whether they will result in unacceptable side effects, in certain people based on the SNPs.

An example of the utility, Pfost said, would be in an efficacy trial in which many patients weren¿t responding to a drug that was working for many others, or was causing severe side effects in a certain percentage of patients. Ordinarily, the trial would be halted and the drug perhaps abandoned. But Orchid would use an SNP test as a tandem product to determine which patients would respond to the treatment, patenting the use of the drug along with the SNP as part of the indication.

With that strategy, Orchid could take over the drug, in effect resurrecting it from failure, Pfost said, or get its own proprietary label extension. Or the company could go into partnership with the drug¿s developer.

An intellectual property portfolio would be created through stratification of patient sets as a function of genetic variation and its effect on drug efficacy, Pfost said, adding that the technology provides a genotyping error rate of less than one-tenth of 1 percent.

Separate from the financing, Orchid established a collaboration with the University of Washington School of Medicine, in Seattle, to establish a high-throughput genotyping lab, which will focus on genetic variability. The work will be managed at the university¿s new Institute for Quantitative Systems Biology, which is being co-founded by Leroy Hood, a pioneer in DNA sequencing and many of the technologies that advanced biotechnology. Hood is a William Gates III professor, and chairman of the department of molecular biotechnology at the university¿s medical school.

Last week, Orchid and the University of Cincinnati School of Medicine initiated a clinical genetics network to research genetic diversity¿s role in disease and drug function. Participating clinicians will provide clinical samples to be analyzed for SNPs and their correlation to disease and drug efficacy.

Also last week, the company opened a high-throughout laboratory it said will be ¿scoring¿ millions of SNPs per day by the end of next year. The first phase of that lab, in Baltimore, will be integrated into a new facility in Princeton later this year.

Orchid, which completed a $27.5 million financing last year, expects another round of private financing this spring, Pfost said, adding that could be the final one before the company goes public. n