Biotech firm HTG raises capital to increase workforce, expand

2011-05-19T00:00:00Z Biotech firm HTG raises capital to increase workforce, expandBy David Wichner Arizona Daily Star Arizona Daily Star
May 19, 2011 12:00 am  • 

For more than a decade, homegrown biotech firm High Throughput Genomics Inc. has been focused on providing genetic testing materials and related services for drug research.

Now, the company has a new name - HTG Molecular Diagnostics Inc. - that reflects a new focus to move its technology closer to patients, with new testing products to help diagnose patients and target treatment based on genetic markers.

With a fresh round of venture-capital financing, the company also is in expansion mode.

HTG is in the process of more than doubling the size of its facilities on Tucson's south side and plans to increase its current workforce of about 30 people by at least half in the next year, President and CEO T.J. Johnson said.

HTG's test kits already are used as research tools by major drug companies and academic researchers nationwide, including Merck and the University of Arizona's Arizona Cancer Center. The company is now turning its sights on the diagnostics market, with plans to develop tests to sell to labs for patient testing.

"We've historically been a research (products) company, and we're now actually moving into what we view as a clinical company," said Johnson, who was wooed away from his executive position at homegrown Ventana Medical Systems in 2008.

That new focus has helped the company garner new private investment for growth.

In February, HTG announced it had secured $15.7 million in venture capital financing, led by new investor Novo A/S. Fletcher Spaght Ventures is also a new investor, joining existing investors Merck Capital Ventures, Solstice Capital and Valley Ventures. The company has attracted more than $25 million in venture funding overall.

"It's really this strategic shift from purely a research company to a clinical company that allowed us to go out and raise new money for the company for its growth, in what's historically one of the hardest economic environments to raise money in our lifetimes," Johnson said.

Now the company is busy expanding its facilities and staff and laying the groundwork for new products.

The company is expanding from its 12,600-square-foot leased location at 3430 E. Global Loop, near East Valencia and South Palo Verde Roads, adding a 17,000 square foot space in the same complex.

Meanwhile, the company is working to identify its first candidates for clinical testing, the first of which could be rolled out in the next two to three years, Johnson said.

Several other former Ventana executives, including recently named Chief Business Officer John Lubniewski, are leading the effort. HTG founder and former CEO Bruce Seligmann is now chief science officer, directing much of the new-product research.

The products could match patients as candidates for specific drugs. For example, Ventana, part of Swiss drug giant Roche since 2008, makes a test for patient suitability for a breast-cancer drug marketed by Roche.

But HTG isn't limiting itself to drug-specific tests and is looking to help scientists and physicians with a gamut of clinical questions, such as disease prognosis and treatment options, Johnson said.

"Part of what we want to do is to bring new utility to personalized medicine, so that we can help answer questions that today aren't known," Johnson said.

HTG's initial focus is cancer drugs and diagnostics, because of the company's strength in tissue analysis, Johnson said, adding that one initial focus will be melanoma, a deadly form of skin cancer.

Genetic testing is a lucrative, and growing, part of the larger molecular diagnostics market.

The global market for genetic testing is forecast to reach $1.8 billion by 2015, according to a January report by Global Industry Analysts Inc.

The growth is being driven in part by advances in screening technologies and demand for new diagnostics for an aging population globally, the San Jose, Calif.-based research firm said.

HTG had revenues of more than $5 million last year, about double its 2009 sales, Johnson said, adding that the money is being plowed back into the business to fuel growth.

Not only could HTG develop into something big, that's part of the plan, said Harry George, chairman of HTG and managing partner of Solstice Capital.

"Our objective is to build this company into something really significant," George said.

Investors aren't in a hurry for a return on their money, George said, but eventually HTG could go public or be acquired by a bigger company.

Ventana did both, and while George was hesitant to make a direct comparison, he said HTG's success helps the region reach the kind of critical mass of companies that can help drive technology and attract top talent.

"It's an excellent example of that, and it goes into other areas … these are not just jobs, they are high-paying jobs, he said.

How it works

HTG's qNPA, or quantitative nuclease protection assay, technology breaks down cell or tissue samples so they can be measured for gene activity based on their interaction with different kinds of genetic material.

The qPNA is used with the company's ArrayPlate product, which allows drug researchers to speed up testing of gene activity by clustering 47 genes in each of 96 tiny wells in a standard-sized microarray plate used in standard lab equipment, allowing thousands of tests to be performed simultaneously.

The resulting reactions are detected using chemicals that cause samples to luminesce, or light up, for analysis via a special reader that displays the patterns on a computer monitor.

Did you know

High Throughput Genomics Inc. was founded in 1997 as a subsidiary of SIDDCO (Systems Integration Drug Discovery Co.), which was started by biochemist Bruce Seligmann. HTG was spun off in 2001 when SIDDCO was acquired by San Diego-based Discovery Partners International Inc.

Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 573-4181.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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