By Mary Welch

Aclara BioSciences Inc. believes its recent $15 million private placement will put the company well on the way toward commercializing its microfluidic chip technology for genetic analysis and high-throughput drug screening.

The Hayward, Calif., firm was started as Soane Technologies in 1990 by David Soane, at the time a professor of chemical engineering at the University of California at Berkeley, and his wife, Zoya. The company evolved into two divisions; the bioanalytical effort that focused on microfluidics became Aclara, and the second ¿ dedicated to discovering new plastics for eyeglass lenses ¿ was dubbed 2C Optics.

David Soane remains as scientific advisor, said Herbert Hooper, executive vice president and chief technical officer.

¿David is involved in a number of activities,¿ Hooper said. ¿He¿s one of those creative entrepreneurs who can¿t start enough companies.¿

Hooper was also in the chemical engineering department at Berkeley and co-founded, with Soane, the division of Soane Technologies that became Aclara.

The company changed its name to Aclara BioSciences last June.

Aclara¿s microfluidics technology enables a wide range of chemical and biological measurements to be performed on microfabricated chips with order-of-magnitude reductions in analysis time, complexity, and reagent and sample consumption. The company applies this technology in the fields of genetic analysis, drug screening and optimization, and clinical diagnostics.

Aclara¿s new generation of biochips, called LabCards, can perform a variety of biological assays. The LabCards utilize electric fields to control the movement of samples and reagents through interconnected microcapillaries and microreactors on the surface of glass and plastic chips ¿ thus miniaturizing, integrating and automating multistep chemical and biological measures in less time.

Bertram Rowland, Aclara¿s vice president and general counsel, said Soane Technologies filed a patent in 1990 for the electric-field-controlled movement of liquids through interconnected microcapillaries on chips, otherwise known as seminal microfluidics.

¿This was filed a good five years before our competitors filed patents in this field,¿ he said.

One company intrigued by Aclara¿s technology is Perkin-Elmer Corp., of Norwalk, Conn., which will collaborate on the development of genetic-analysis systems utilizing Aclara¿s microfluidics with Perkin-Elmer¿s portfolio of genetic-analysis technologies.

The agreement, signed last May, calls for both companies to invest in joint research and product development. Perkin-Elmer will commercialize the resulting systems, and Aclara will manufacture and supply the microfluidic chips. As part of the deal, Perkin-Elmer made an undisclosed equity investment in Aclara.

Hooper said the companies are ¿essentially developing the next-generation DNA sequencing technology, and we¿ll create highly automated and integrated genetic analysis systems. The downstream potential for chips is limited only by the demand for genetic information.¿

In high-throughput screening, Aclara has a collaboration with an undisclosed pharmaceutical company to screen drug candidates against targets on microfluidic chips.

Aclara also signed a $1 million contract last fall with the Defense Advanced Research Projects Agency to advance microfluidics technology. The project centers on development of ready-to-use LabCards that are preloaded with all of the reagents necessary for performing various assays, thus reducing the number of manual steps required for an analysis.

The company has a $3.6 million deal with the Advanced Technology Program of the National Institute of Standards and Technology (NIST) for DNA sample preparation technology. The NIST grant will accelerate Aclara¿s development of LabCards having integrated DNA sample preparation capabilities.

¿Our strategy is to develop and commercialize our platform technology through co-development partners, like Perkin-Elmer, and through technology access partnerships,¿ Hooper said.

The infusion of $15 million in the Feb. 23 placement is expected to last the company, which has about 50 employees, until the end of 2000 or longer, he added.

Aclara is headed by Joseph Limber, who was the former president and chief operating officer of Praecis Pharmaceuticals Inc., of Cambridge, Mass., and a former executive vice president at in Sequus Pharmaceuticals Inc., of Menlo Park, Calif.

Alta Partners, of San Francisco, led the latest financing round and was joined by new investors AM Pappas, of Research Triangle Park, N.C.; Bluewater Capital, of San Francisco (an affiliate of U.K.-based London Merchant); GIMV Investment Corp., of Antwerp, Belgium; and Singapore BioInnovations, of Redwood Shores, Calif. Current Aclara investors Ampersand Ventures, of Wellesley, Mass., and CMEA Ventures, of San Francisco, also participated. SG Cowen Securities Corp., of Boston, acted as the placement agent.

As part of the deal, Jean Deleage, who formed Alta Partners as a successor to San Francisco-based Burr, Egan, Deleage & Co., joined Aclara¿s board of directors. Dow Chemical Co., of Midland, Mich., is also an equity investor, but did not participate in this round. n