Monday, March 10, 2008

DNA mapping firm Helicos' deal drives $1,000 genome

By Ryan McBride

Helicos BioSciences Corp. has sold its first DNA sequencing system, a major development for the Cambridge firm and, potentially, the life sciences sector, observers say.

The life sciences company's DNA mapping system, called the Heliscope Sequencer, is now the most advanced product of its kind on the market. And company insiders say the Heliscope is only a few years from providing the so-called $1,000 genome, which is shorthand for sequencing an entire human genome for $1,000. Many people believe the $1,000 cost would make the technology available to the masses and revolutionize health care.

This week Helicos revealed that Expression Analysis Inc., a provider of genetic research services based in North Carolina, was the first firm to buy a Heliscope. Helicos had said it shipped its first Heliscope in February, but initially didn't identify the customer.

"It's an important inflection point for the company," said John Sullivan, an analyst at Boston market research and investment banking firm Leerink Swann & Co., which has provided investment banking services to Helicos.

Sullivan said the worldwide DNA sequencing market stands at about $650 million to $700 million annually, made up mostly by major research institutions and pharmaceutical firms. But developing faster genetic analyzers such as the Heliscope could expand that market to smaller research centers and hospitals.

New technology has dropped the price of sequencing a human genome, or an entire molecule of DNA, from several million dollars just a few years ago to less than $100,000 today, Sullivan said. The Heliscope, for example, sequences single molecules of DNA in a faster process than traditional systems, which rely on a somewhat complex method of making many copies of each molecule to analyze.

Despite its advantages, the Heliscope has entered the market after a wave of second-generation DNA sequencers from life sciences firms such as Illumina Inc. and Applied Biosystems, both based in California. Applied Biosystems, for one, began shipments of its next-generation "SOLiD" analyzer in October 2007.

With a price tag starting at $1.35 million, the Heliscope is more than double the cost of the "SOLiD" analyzer and more than three times as much as Illumina's machine, according to figures from Leerink. However, Sullivan noted, the Heliscope reduces the overall costs of sequencing, using fewer reagents and working faster than competing products.

Stephen Lombardi, president and COO of Helicos, said the Heliscope is capable of sequencing an entire human genome in a day and at a cost of $70,000 to $75,000. He noted that with more advanced chemistry, the system as is could achieve a $1,000 genome. "We think that this is just a matter of a few years," he added.

Helicos has undergone a rapid expansion to advance its technology and add commercial capabilities, Lombardi said. Last May, the company raised nearly $50 million in an initial public offering, helping the firm, which now employs 122 workers, to double its work force in 2007. The company also borrowed $20 million in a loan from GE Healthcare Financial Services in December 2007 to buoy its commercial efforts.

Lombardi said the company would provide guidance on expected sales of the Heliscope on Tuesday, March 11, with its results for the fourth quarter 2007 and full fiscal 2007.