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Bill Ericson doesn’t see much cause for pessimism about the dawning Genomic Age. The Mohr Davidow Ventures partner, who’s helped resuscitate the firm’s life-science practice since he came aboard in 2000, believes the widespread dissemination of genetic information will be a virtually unalloyed good, opening up a wealth of opportunities for more effective medicine, lower healthcare costs and individual empowerment — not to mention investment opportunities for those prescient enough to seize them. (See here and here for my own take on the subject.)

Ericson, of course, has plunked down some serious cash in service of his convictions. He played a significant role in funding the genome-sequencing startup Pacific Biosciences, which announced itself with a splash last weekend, and previously backed Tethys Bioscience, a biotech with a test it says will predict your diabetes risk with high precision. I spoke with him recently about the PacBio investment, and somewhat to my surprise soon found myself in a broader conversation about the impact genomic data will have on the world. (I’ve edited the transcript for clarity and brevity.)

VentureBeat Life Sciences: Makers of biological tools like gene-sequencing equipment have been out of favor with VCs for almost a decade. How did you get involved with a genome sequencer like PacBio?

Bill Ericson: Back in the mid-1990s, it became clear that we were entering a period in which we could measure biological functions and patterns in ways that we hadn’t previously been able to do. When I joined Mohr Davidow, I wanted to focus on where measuring biology in more systematic, quantitative ways would lead. It was just the beginning of a period of rapid technological advances and of rapidly improving understanding of fundamental biology. I was convinced that all sorts of goods and services would flow out of that.

One area we considered greatly underinvested was sequencing. Other nucleic-acid measurement techniques are surrogates for sequence information, which we thought was the gold standard. At the end of the day, if you could do fast, accurate sequencing, you’d probably end up dominating the field.

One technology that got us really excited was at a company then called Nanofluidics [now PacBio], where three Cornell postdocs were working on zero-mode waveguides and using them to do sequencing. We convinced them to move their group to the Palo Alto area, where they incubated with us for the better part of a year. We wanted to invest in people and technology that could really take you to the next, next level of sequencing — as close as possible to the end state of sequencing technology. These guys had at least the theoretical ability to do the full human genome for $1,000 or less.

VBLS: What consequences do you expect from the advent of such high-speed sequencing?

BE: This is an information-generating technology, one that’s faster, cheaper and more powerful than anything else. Any number of new applications could flow from that. For instance, everyone believes that genetics plays a role in predisposing you to various diseases. If we do the population studies [that reliably link genetic differences to disease], you can arm physicians, patients and consumers with a better way of looking at health. Human health turns into much more of an information system that can be understood and proactively addressed, in sharp contrast to medical practice today, which is tremendously reactive and wasteful.

Once you shine the spotlight of sequencing on large populations, you’ll identify patterns that are invisible today. I would love to see genetic studies show that only five percent of the population actually needs to go on a drug that today is prescribed for 40 percent to 50 percent. That’s a tremendous win — no drug has no side effects. Sequencing could also be very useful in an area that frankly ought to scare all of us to death, which is the emergence of drug-resistant infectious disease. You could see the mutations [that confer resistance] happening in real time. In real time, you could be measuring somatic mutations [that give rise to cancer].

I think all these tools are going to give rise to new applications. It’s a lot like watching the computer industry — once PCs were adopted to the point of being cheap and readily available, people created applications for them. I honestly wish I could tell you precisely what will be valuable and what won’t, but we’re still in the early innings.

(More after the jump.)

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More than a half-dozen startups and established companies are in hot pursuit of the “$1,000 genome,” a Holy Grail for those who believe fast, cheap genome sequencing will revolutionize medicine. The latest is Pacific Biosciences, a formerly secretive Menlo Park, Calif., company that just spilled its guts to the NYT over the weekend. We take a look at the company, its technology and the competitive landscape in this piece over at VentureBeat Life Sciences.

Competition to analyze human genomes faster and cheaper — a subject I’ve discussed at length here and here — keeps heating up. The latest shot came yesterday, when Menlo Park, Calif.-based Pacific Biosciences granted the NYT an exclusive look at technology it says should eventually make it possible to sequence a genome in just a few minutes for under $1,000.

Although the “$1,000 genome” is a purely arbitrary goal, it’s become a Holy Grail of sorts for the genomics field. (The startup Knome, which we covered here, currently offers full-genome sequencing for $350,000.) Cheap, fast sequencing of all six billion DNA “letters,” or bases, in humans could make it possible, for instance, for doctors to better tailor treatments to a patient’s own genetic quirks or to identify the specific weaknesses of tumor cells. More broadly, it would also vastly increase our understanding of the genome, which has turned out to be a much more mysterious realm than just about anyone expected only a decade ago, and illuminate the ways DNA varies between individuals, groups and even among cells and tissues within a single individual.

PacBio has long been secretive about its work, although it’s been clear that the company has some heavy hitters backing it, including Kleiner Perkins Caufield & Byers, Alloy Ventures and Mohr-Davidow Ventures. (Our earlier coverage of the company’s $50 million financing last year is here.) A research team including scientists from PacBio — then known as NanoFluidics — and Cornell did publish a 2003 paper in Science describing some of the company’s work, but it’s a fairly abstruse piece even by the standards of the scientific literature, unless ploughing through mathematical descriptions of zero-mode waveguides is your idea of fun.

Before getting into the PacBio technology, however, a word of caution. The high-speed sequencing race is pretty crowded, with more than a half-dozen companies pushing forward with new technological approachs and making grand claims for their speed, accuracy and ultimate utility. None of these claims are really possible to evaluate at the moment, and of course the companies involved have every incentive to play up their strengths. PacBio is no different in this respect, and while the NYT story focuses on this particular startup, reporter Andrew Pollack is careful to quote several skeptics who raise perfectly reasonable concerns about the company’s expansive claims.

According to a sidebar to the main NYT story, PacBio’s basic approach involves trapping individual DNA molecules in thousands of tiny holes, or “wells,” fabricated in a thin sheet of metal. These holes are only 70 nanometers wide, or about one-thousandth the width of a human hair — small enough to hold a single stretch of DNA, but large enough for various biochemical reactions to take place inside.

Once inside the wells, the double-helix structure of DNA “unzips” into two single strands, each of which then rebuilds a complementary strand from chemical bases floating in the wells with the help of an enzyme called DNA polymerase. Those bases are tagged with fluorescent molecules that make it possible to identify them under a microscope. PacBio’s system uses digital-camera technology to observe the process in real time, allowing it to analyze and “read” the order in which the bases are strung together.

PacBio claims several advantages over other high-speed sequencing techniques, all of which involve chopping up DNA into short pieces that can be read more easily and then reassembled into a full genome. PacBio says it can read 1,000 bases of DNA in one go — several times greater than other high-speed techniques, which are capable of analyzing stretches of only 30 to 450 bases at once.

By observing the same reaction across thousands of wells, the PacBio sequencing system should read genomes with great speed. The company is currently able to read about 10 bases a second in any given well, so if 1,000 wells all worked at once — itself something of a tall order — the system should run about twice as fast as existing sequencers.

The company certainly doesn’t lack self-confidence. “If we ever make this work, there would be no other technology applicable in the sequencing field,” Hugh Martin, the company’s CEO, told the NYT. Martin went on to discuss the Archon X Prize for Genomics, which offers $10 million to anyone who can sequence 100 genomes in ten days. “When we’re ready,” Martin said, “we’re just going to win the X Prize.” (PacBio hasn’t even officially entered the contest yet.)

PacBio, however, doesn’t plan to release a commercial version of its system until early 2010, and won’t have a model capable of sequencing a full genome until 2013. Some of its competitors could leapfrog it in the meantime — Intelligent BioSystems, for instance, claims it will have a machine that can sequence a full genome in 24 hours for $5,000 by the end of this year. (The NYT says it will cost $10,000, presumably reflecting the difference between the full six billion bases in our 23 pairs of chromosomes and the three billion bases that make up just one set of chromosomes.) Complete Genomics and BioNanomatrix, who haven’t disclosed details of their technological approach except to say they plan to read a stunning 100,000 bases at a time, assert they’ll be able to decode a full genome in eight hours for $100, although it’s not clear by when.

As I noted earlier, however, it’s best to take all such projections with a grain of salt. Hitting goals like these are best-case scenarios that could be tripped up by any number of unexpected wrinkles in the engineering and technology-development process. Still, it’s a heck of a lot of fun to watch.

PacBio has raised a total of $78 million to date, and will probably need another $80 million to bring its systems to market, the company’s CEO told the NYT.

Featured companies: CG Therapeutics, Complete Genomics, ConforMIS, Flexible Medical Systems, LeMaitre Vascular, MAP Pharmaceuticals, ParaPro, Vascular Architects, Zars Pharma

(UPDATED on 10/1/07: See below.)

[NOTE: Posting has been slow recently for personal reasons. I'll be doing my best to catch up today.]

Complete Genomics raises funding for high-speed sequencing — Complete Genomics, a Mountain View, Calif., developer of high-speed genome sequencing technology, said it raised an undisclosed sum in a second funding round, VentureWire reports (subscription required). The company said the funding was significantly larger than its $6 million first round last year, but declined to say by how much. Investors included OVP Venture Partners and Enterprise Partners Venture Capital.

Complete Genomics is one of several companies aiming to bring down the cost of genome sequencing in order to, among other things, eventually make it possible for individuals to base medical and lifestyle decisions on their individual genetic profiles. The company, founded in 2005, hasn’t disclosed many details about its technological approach, although its Web site vaguely describes it as “a novel combination of high-density DNA nanoarrays, sequencing-by-hybridization and combinatorial probe-ligation chemistry, and high-performance computing techniques.”

The high-speed sequencing market has been in a state of flux recently. Cambridge, Mass.-based Helicos Biosciences, went public in May. Solexa, a U.K.-based sequencer that later moved to the U.S., also went public in 2005 via a reverse merger and then was acquired earlier this year by Illumina. 454 Life Sciences was acquired by Roche earlier this year. VentureWire also lists Pacific Biosciences as a recent venture-backed sequencing company.

UPDATE: Complete Genomics announced an interesting new joint venture with BioNanomatrix of Philadelphia ten days after this funding; see our coverage here.

MAP Pharma prices IPO, looks to raise $92M — Mountain View, Calif.-based MAP Pharmaceuticals said it plans to price its initial-offering shares at $14 to $16 apiece, a range that could potentially raise $92 million. That’s up from the $86 million take MAP estimated in June (see our coverage at the time).

MAP makes reformulated versions of existing drugs for delivery via inhalers. Its lead candidate is a new inhaled version of budesonide, a corticosteroid used to treat pediatric asthma.

Implant maker ConforMIS ponders new funding, possible IPO — ConforMIS, a Lexington, Mass., medical-device company, is raising a “mezzanine” round of financing while it plans for an IPO within two years, VentureWire reports. The company, which makes personalized knee implants, raised a $10 million “debt facility” in August (see our coverage in the second item here).

LeMaitre acquires Vascular Architects for $2.8M — LeMaitre Vascular, a publicly traded maker of devices and implants for vascular surgery based in Burlington, Mass., acquired venture-backed Vascular Architects of San Jose, Calif., for $2.8 million in cash. Vascular Architects makes devices for the removal of plaque deposits that can clog arteries and cause life-threatening blood clots. The company had previously raised more than $42 million in equity and $5 million in debt, according to VentureWire.

Lice-drug maker ParaPro gets $2.1M grant — ParaPro, a Carmel, Ind., specialty pharmaceutical company developing a topical cream for treating head lice, received a $2.1 million grant from Indiana’s 21st Century Research and Technology Fund. The company said the funding will finance late-stage trials of its lice treatment, which it calls Spinosad.

CG Therapeutics names Christopher Henney chairman, seeks funding — Chris Henney, who co-founded three of Seattle’s most successful biotechs — Immunex, Icos and Dendreon — is now also the new chairman (PDF link) of CG Therapeutics, a new cancer-vaccine company in Seattle. The company said Henney will play a key role in lining up corporate partners and seeking new funding. CG Therapeutics is currently working on a first funding round intended to support mid-stage trials of its cancer vaccine in lung and colon cancer.

Zars Pharma delays IPO — Salt Lake City’s Zars Pharma, a developer of topical drugs, postponed its IPO until next week. Zars priced its IPO at $14 to $16 a share in August, and was slated to hit the market this week. See our previous coverage here and in the third item here.

At that, Zars is in far better shape than Cumberland Pharmaceuticals, which has been expected to go public on a day-to-day basis since mid-August. We last wrote about Cumberland here.

Flexible Medical Systems raises $1.2M for remote diagnostics — Rockville, Md.-based Flexible Medical Systems, a device and diagnostics maker focused on non-invasive devices that continuously monitor vital signs, raised $1.2 million in a seed financing. “Accredited investors” provided the funding.

FMS is developing diagnostic monitors that continuously draw “interstitial fluid” through the skin without a needle or other punctures. This fluid can theoretically be used to monitor protein levels in blood, although it’s also worth noting that other attempts to do this sort of thing — especially continuous blood-sugar monitoring for diabetics — have had a mixed history.