Isis Spinoff Ibis Biosciences, Looking at DNA of Infectious Bugs, Aims to Identify What They Are, Faster

10/27/08Follow @xconomy

When people walk into the hospital with nasty flu-like symptoms, and doctors don’t know where the bug came from, the custom is to take a fluid sample and grow it in a lab dish for a day or two to get enough material to find out what it is. Then microbiologists use tools to try to identify it. Ibis Biosciences thinks it has a tool that can give a more definite answer within eight to 16 hours, by looking at the bug’s DNA.

Ibis is a subsidiary of Carlsbad, CA-based Isis Pharmaceuticals (NASDAQ: ISIS). So while I was in the neighborhood meeting that company recently, I stopped by to hear the Ibis story from its president, Michael Treble, who is headquartered right across the parking lot from Isis.

Ibis is working these days to reach milestones that will lead Abbott Laboratories to acquire the company, Treble says. The giant health products company invested $20 million in Ibis in July, and got the exclusive right to acquire Ibis for another $175 million to $190 million before next June 30. The interest stems from Ibis’ T5000 machine, which is used for research that can identify something new and unfamiliar like a SARS virus. It isn’t yet being used as an everyday diagnostic tool in hospital labs to screen for any number of infections, but that’s the vision.

“Molecular technologies have been around 20 years, but you can’t run 100 different PCR reactions to hunt down what the bug is. It’s cost-prohibitive,” Treble says. “With ours, within five hours you have an answer from a sample.” (He’s talking about polymerase chain reactions, or PCR, which amplifies DNA to get enough sample to identify an organism’s unique signature.)

The Ibis systems leans heavily on its connection to a massive database of the genomes of various bugs, so the machine can quickly find a match, or a near-match, to an infectious agent, Treble says.

This kind of machine isn’t cheap, running $300,000 to $400,000 for the instrument and proprietary chemical kits. Ibis, or rather Abbott, wants to sell them to hospital microbiology labs and infectious disease labs. Already, the Centers for Disease Control and Prevention uses one for research, as do Johns Hopkins University, the Naval Health Research Center, and others, Treble says.

Ibis got its first two orders in October 2006 to U.S. government agencies that wanted to do forensic analysis on human remains when the samples are too scarce or too degraded to be analyzed with other tools.

“Governments, organizations like the CDC, hospitals, and health providers throughout the world need better tools to deal with the growing risks associated with SARS-like epidemics and hospital infections. The Ibis T5000 Biosensor System represents a compelling approach,” said Garth Ehrlich, executive director of the Center for Genomic Sciences at Allegheny Singer Research Institute, in an Ibis statement.

Ibis is betting that hospitals will be motivated to buy its tool because of new reimbursement rules imposed by insurers seeking to crack down on them for allowing patients to get infected with costly hospital-acquired infections. If patients get infected at the hospital, insurers are “pushing the costs onto the hospitals’ books,” Treble says. Every year, the CDC estimates that 200,000 people in the U.S. get these kind of infections, like C. difficile or MRSA, which often force patients to be hospitalized for longer periods to take powerful antibiotics like vancomycin. Hospitals may want to screen patients with the Ibis tool before admitting them to the hospital in order to isolate those who are contagious before they pass a bug on to others and run up a big tab, Treble says.

“You can ask, ‘Where is this coming from?” Treble says. “Now you can effectively change things if you know what the source is.”

Treble has been with Ibis for more than three years, and before that was CEO of Madison, WI-based NimbleGen Systems, a company sold to Basel, Switzerland-based Roche in 2007 for $272.5 million. Ibis, he says, should have even more impact. “This is the biggest opportunity I’ve seen in 30 years,” Treble says. He’s hoping his enthusiasm is contagious.

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