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To Fight “Superbugs,” Roche Shells Out $190M For Bay Area’s GeneWEAVE

Xconomy San Francisco — 

Swiss cancer drug giant Roche has used acquisitions to beef up its diagnostics business over the past few years. And today marks the latest example: an agreement to buy a Bay Area startup in a deal that could be worth as much as $425 million.

Roche is paying $190 million up front, and potentially another $235 million down the road, for a privately-held, Los Gatos, CA-based startup called GeneWEAVE Biosciences. The startup has developed a technology named “Smarticles” which is meant to quickly detect the presence of deadly the drug-resistant “superbug” infections patients can acquire in hospitals, and to determine which antibiotics are best to treat them.

GeneWEAVE’s tiny engineered particles do this by essentially lighting up different strains of bacteria. The particles bind to specific bacteria and deliver a molecule of DNA that causes them to express luciferase—an enzyme that causes organisms to glow. Adding an antibiotic to the sample switches off this process in bacteria that are susceptible to that drug, so only the drug-resistant ones light up.

The idea is that by detecting drug-resistant infections or the carriers of these bacteria earlier, healthcare facilities can take preventative measures and stop them from spreading. Traditional methods used to identify drug-resistant infections (things like methicillin-resistant staphylococcus auerus, or MRSA) and determine which antibiotics will work against them involve isolating microbes, growing them, and seeing if they’ll survive when exposed to a drug. And GeneWEAVE says that faster nucleic acid-based tests only rule out potential treatments, rather than help pinpoint the effective ones. GeneWEAVE says it can do this, and quickly—directly from clinical samples.

For Roche, meanwhile, the  adds a piece to its sprawling international diagnostics business, which it’s been building up via deals with companies like Foundation Medicine (NASDAQ: FMI), Bina Technologies, and Ariosa Diagnostics. And though this it’s unclear if this deal will impact Roche’s internal antibiotics development efforts as well, the company has also been particularly active on that front. Among other deals over the past few years, it’s aligned with Boston area startups like Spero Therapeutics and Macrolide Pharmaceuticals, which are both developing therapies for drug-resistant bacterial infections.

Such infections are on the rise, with the Centers for Disease Control and Prevention estimating that they affect about 2 million Americans each year and kill more than 23,000. GeneWEAVE’s technology is currently being tested in several sites around the U.S.

GeneWEAVE’s backers include Decheng Capital, Claremont Creek Ventures, and XSeed Capital. Its last venture round was a $12 million Series B in July 2014.