Roche Invests up to $15M in Stratos Genomics for Nanopore Tech; Sees Synergy with Recent Genia Buy

by Julia Karow (reposted with permission from GenomeWeb)

NEW YORK (GenomeWeb) – When Roche announced last month that it planned to acquire nanopore sequencing startup Genia for up to $350 million, unbeknownst to the public it had already struck an agreement with another firm with a potentially complementary sequencing chemistry – Stratos Genomics.

Last week, Roche disclosed its strategic investment in Seattle-based Stratos Genomics, a spinoff from the Stratos Group, and said it is collaborating with the firm to further develop its sequencing-by-expansion chemistry for nanopore sequencing.

"The goal of our research collaboration with Stratos Genomics and the recent acquisition of Genia Technologies is to capitalize on the promise of nanopore sequencing and put Roche on a path to introduce a potentially disruptive technology to the sequencing market," Dan Zabrowski, head of Roche's Sequencing Unit, said in a statement.

Company officials told In Sequence that Roche invested about $5 million in Stratos as part of a $15 million Series B financing round, with the remaining $10 million coming from existing investors. In addition, Roche may contribute up to another $10 million based on milestones, and the other investors up to another $5 million.

The research partnership will last for up to two years and will focus on Stratos' sequencing chemistry. Stratos retains rights to commercialize its technology, and the deal is separate from Roche's acquisition of Genia. If the collaboration succeeds, Roche may pursue additional agreements with Stratos to use its chemistry with a nanopore platform such as Genia's, according to a Roche spokesperson.

Stratos has been developing an approach where a polymerase uses expandable nucleotides, or X-NTPs, to convert DNA into a so-called Xpandomer, a surrogate molecule that is about 10 to 100 times longer than the original DNA. One way to determine the DNA sequence is to feed the Xpandomer through a nanopore detector.

However, Stratos will continue to work on instrumentation and detection methodologies independently of Roche. "Nanopores are a very compelling path for us, but we are also looking at other methods of measuring the Xpandomers at this point," Stratos Genomics CEO Al Stephan told IS.

According to Vinod Makhijani, vice president and project leader for the Roche Sequencing Unit who will be managing the partnership with Stratos, Roche was "pretty impressed by the progress they have made so far."

Last year, Stratos demonstrated that it can sequence about 200 bases of DNA, using a ligase approach, but has since switched to a simpler, polymerase-based conversion process that only requires four different X-NTPs. Each X-NTP contains a hairpin with a cleavable bond and a reporter, a polymer that can vary depending on the detection technology used.

"That's where we think we can work with them because Roche has several decades of experience with polymerase enzymology and evolution," Makhijani said. In particular, the collaboration will involve a team at Roche Molecular Diagnostics in Pleasanton, Calif., with expertise in polymerase technology, mostly for PCR applications, as well as a group at Roche Professional Diagnostics, based in Penzberg, Germany, that specializes in the development and manufacture of customized rare reagents.

"They have some brilliant biochemists and molecular engineering capability that's complementary with our activity," said Stephan. Roche's teams will not work directly with Stratos' group, he explained, but the two will proceed in parallel in order to test as many different solutions as possible.

Once the Xpandomer conversion chemistry has been developed, Roche will likely explore how to use it with Genia's protein nanopore platform, which uses a highly scalable semiconductor chip. According to Stephan, Stratos has had a "very positive relationship" with Genia already, and he can well imagine collaborating with Roche's Genia team in the future.

Genia has been working with a number of academic partners on a sequencing-by-synthesis chemistry called NanoTag. But every sequencing chemistry has its own sweet spots and limitations, Makhijani said, and Stratos' chemistry could prove to be complementary to Genia's.

Though work on Stratos' chemistry is still early, "I'm pretty sure that there are going to be certain applications where the Stratos chemistry would be better suited, and maybe some other applications where the Genia single molecule chemistry would work [better]," he said. "In that sense, we will be able to get the best out of the two chemistries that we have access to for our future product portfolio."

When the time for commercialization comes, "Roche would be an excellent partner, but that has not been determined at this point," Stephan said.

Julia Karow tracks trends in next-generation sequencing for research and clinical applications for GenomeWeb's In Sequence and Clinical Sequencing News. E-mail Julia Karow (jkarow@genomeweb.com) or follow her GenomeWeb Twitter accounts at @InSequence and @ClinSeqNews.

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Joe Horsman