NanoString Technologies, the maker of a machine that lets scientists digitally analyze how genes are turned on or off in a tissue sample, just won a glowing endorsement from one of the biggest names in biology—Eric Lander of the Broad Institute of MIT and Harvard.

The Seattle-based company has nailed down a three-year research collaboration with the Cambridge, MA-based Broad Institute to look at how networks of hundreds of genes work in concert to form immune defenses against foreign invaders. Financial terms aren’t being disclosed, but NanoString has sold the Broad a couple discounted nCounter machines that normally retail at $235,000 apiece, and will provide proprietary reagent chemicals to operate them, according to acting CEO Wayne Burns. In return, NanoString gets certain intellectual property rights from the collaboration, advice on how to improve its tool, and some golden word of mouth.

NanoString, a private company founded in 2004 with technology from the Institute for Systems Biology in Seattle, has been building stronger ties to the Broad over the past year as people there have started using one of the first commercially available machines, Burns says. The mounting enthusiasm at the institute was instrumental in helping NanoString nail down a $30 million venture capital round in June. The round was led by Clarus Ventures, which has an office just a couple blocks from the Broad. Word has spread to the point that 15 researchers at the Broad are now involved in 20 separate collaborations to see whether the NanoString technology can yield biological insights that couldn’t realistically be attained with competing instruments, Burns says.

“NanoString offers the ability to look at hundreds of genetic markers across many samples at relatively low cost and with high sensitivity. They have developed exciting technology with potential applications to a wide range of scientific problems,” said Lander, the director of the Broad Institute, in a NanoString statement. “We look forward to working together to explore new ways of using of this technology.”

That kind of endorsement is sure to carry weight in the biomedical research community, and can’t hurt a fledging company trying to increase sales. “If you’re in the industry you know exactly who Eric Lander is, the reputation he has, as well as that of the Broad. We have the best of the best endorsing our technology,” Burns says.

For those who are new to the NanoString story, the idea is to allow researchers to look at a large number of genes, with digital precision, to see the extent to which they are turned on or off in a given sample. It’s the sort of technology that’s supposed to help researchers do …Next Page »

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Carlsbad, CA-based Helixis, the startup maker of genetic analysis tools founded from the Caltech lab of Nobel Laureate David Baltimore, has raised $7.3 million out of a venture capital round potentially worth $10 million, according to a regulatory filing today.

Helixis reported back in July that it had raised $5.5 million, so today’s filing is an amendment to reflect the larger amount of capital (nearly $2 million more) being invested. The filing, like July’s document, doesn’t say who invested, although Domain Associates, Advanced Technology Ventures, and Okapi Venture Capital led an initial venture financing in the company of $10 million back in 2007. The founders include Baltimore and Axel Scherer, who is also a Caltech professor.

Helixis is developing products that attempt to make real-time polymerase chain reaction (RT-PCR) technology more accessible to the average researcher. This technology precisely measures individual units of DNA and mutations. Switzerland-based Roche and Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) are a couple of the big players in this market and typically sell big, expensive pieces of equipment to perform this kind of analysis.

The startup from Caltech has a different view of how real-time PCR might be applied. Advances in biology depend on scientists being able to precisely measure DNA and compare it easily across samples, but largely because of cost the current technology for doing that isn’t accessible to enough scientists, Baltimore says in a video clip posted on the Helixis website.

“The idea might be to have on the desktop of every scientist a machine that works as well as the most high-tech machines, but is affordable at the bench level,” Baltimore says. “Helixis is a company devoted to doing that, and has produced such a machine. We’d like to make that machine available on the widest possible basis.”

Helixis CEO Alex Dickinson couldn’t immediately be reached for comment, although he did confirm the amount of the financing through a company representative.

The company has some big names on its five-member board of directors, according to today’s SEC filing. The group includes Dickinson; Caltech’s Scherer; Illumina CEO Jay Flatley; Jim Blair of Domain Associates; and Tom Rodgers of Advanced Technology Ventures.

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In what is shaping up as the battle of San Diego’s biotechnology tools titans, Life Technologies (NASDAQ: LIFE) has filed a patent-infringement suit against rival Illumina, claiming that some of Illumina’s best-selling genetic-sequencing products violate Life Tech’s intellectual property.

The suit, filed in U.S. District Court in Delaware, claims that certain Illumina products, including the Genome Analyzer and the second-generation Genome Analyzer II, infringe upon three Life Tech patents. The suit seeks an unspecified amount in damages, and a permanent injunction restraining Illumina (NASDAQ: ILMN) from further infringement. If granted, the injunction would prevent Illumina from selling its equipment.

Telephone and e-mail messages to an Illumina spokesperson were not returned.

Illumina’s Genome Analyzer products are a mainstay of the company’s genetics analysis business, and are important to Illumina’s growth. The $50,000 whole-genome analysis that Illumina began offering to the public in June uses the Genome Analyzer. The company has stated that one of its corporate goals is to make the Genome Analyzer the industry standard for genetic analysis. Last year, the device accounted for the bulk of Illumina’s $64.8 million increase in instrument sales.

Life Technologies, formed last November through the merger of Invitrogen and Applied Biosystems, claims it is the leader in the genetic sequencing business. The Carlsbad, CA-based company had revenue of $3.1 billion in 2008, dwarfing Illumina’s 2008 revenue of $570 million.

Listed as plaintiffs along with Life Tech are patent owners Alexander Chetverin and Helena Chetverina, both of Russia; The Institute for Protein Research of the Russian Academy of Sciences; and William Hone of New York. According to the suit, the patents cover certain methods of amplifying and expressing nucleic acid, a building block of DNA. Applied Biosystems had an exclusive license to the patents, which issued in the late 1990s.

Illumina subsidiary Solexa is also named as a defendant.

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[Update: 09/16/09, 11:15 am] Helicos Biosciences has gotten a lifeline, at least temporarily. The Cambridge, MA-based maker of genetic analysis instruments which hired an investment banker two weeks ago to seek “strategic alternatives” as it ran low on cash, has raised $10 million from new and existing investors and CEO Ron Lowy. [The deal includes new and existing investors, not just existing investors.]

Helicos (NASDAQ: HLCS) got the money from investors that include Atlas Ventures, Flagship Ventures, Highland Capital Partners, Versant Ventures, and Lowy. The cash infusion comes about a month after Helicos disclosed in its quarterly report, on August 14, that it was down to its last $5 million of cash. That meant it needed to raise money in the next four months, given the company burned $11.3 million of its cash to operate the first six months of this year.

The company is hopeful that its gene sequencing machines—which compete with those from industry heavyweights like Life Technologies, Illumina, and Roche—will gain acceptance in the market in a hurry after they were first introduced last year. Demand is encouraging so far, Helicos says. The company’s tools are used at the Broad Institute of MIT and Harvard, Mass General Hospital Cancer Center, and Dana-Farber Cancer Institute. Last week, Helicos sold four of its systems to a research institute in Japan.

But Helicos makes it sound like it’s not out of the woods, even after raising $10 million. The company hired Thomas Weisel Partners earlier this month to help consider “strategic alternatives,” like more financing, or partnerships, to make sure the company doesn’t run out of money.

“We believe that raising this level of funds is appropriate given the recent demand for the Helicos Single Molecule Sequencing System while we consider our strategic alternatives,” Lowy said today in a statement.

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CombiMatrix, the Mukilteo, WA-based maker of genetic analysis tools, said today it has received a $1.5 million contract from the U.S. Air Force Research Laboratory. The company (NASDAQ: CBMX) is being asked to develop semiconductor automated tools that detect biological, chemical, and environmental hazards that may affect the health of soldiers. CombiMatrix has developed other products for the U.S. military, including tools to detect anthrax.

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CombiMatrix, the Mukilteo, WA-based maker of genetic analysis tools, said this week it intends to hire an investment bank to evaluate options to “unlock shareholder value,” which might mean selling the company, parts of the company, or a finding partnership, according to a statement. CombiMatrix (NASDAQ: CBMX) considers it a good time to evaluate those options because it has more than a year’s worth of cash in the bank, and it hopes to win $36 million in a court judgment. As we described in this profile in June, CombiMatrix is also going through a strategic shift, gearing its tools more toward the market for cancer diagnostics.

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Seattle-based Amnis, the maker of a scientific instrument that provides detailed images on large numbers of cells, has raised the first $839,000 out of a venture round that’s expected to top out at $1.5 million within a couple of weeks, according to CEO David Basiji.

Amnis secured the first batch of funds from its existing investors, CVF LLC, MedVenture Associates, and OrbiMed Capital, and angels, Basiji says. The money will be used to beef up manufacturing runs so that Amnis can produce enough of its new ImageStreamX machine to meet demand from biologists, he says. By mid-September, Amnis expects to have enough orders booked to use up its full manufacturing capacity for the rest of the year, he added.

“We’re seeing a lot of organic demand,” Basiji says.

We profiled Amnis in this space last month, describing how the company is going through a transformation with its second-generation instrument. As described in that story, the ImageStreamX is essentially a cross between a traditional laboratory microscope for looking at cells, and a standard machine for counting and cataloging large numbers of cells-what’s known as a flow cytometer. Microscopes are great for providing detailed images, but they are slow, and are limited by what human eyes can see. Flow cytometers are good at giving quantitative cell counts in a sample-but don’t provide images that can provide subtle insights into variation of cells. The Amnis product is designed to combine some of the best features of both product types, Basiji says.

Amnis sells the product to academic researchers at places like the National Institutes of Health, the Pasteur Institute in France, as well as big drugmakers like Amgen and GlaxoSmithKline.

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San Diego-based Illumina, the maker of genetic analysis tools for biologists, said today that its second-quarter sales fell short of the company’s forecast. Illumina (NASDAQ: ILMN), in a preliminary, unaudited financial review, said it expects to report $161 million in second quarter sales—less than the $168 to $173 million it expected. It blamed the shortfall on reduced research funding from foundations, and delays as customers wait to see how their budgets are affected by the federal stimulus package.

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We had a smorgasbord of life sciences news this week, featuring updates on Northwest companies developing drugs, devices, vaccines, and scientific instruments.

—Cell Therapeutics has bet the company on pixantrone for non-Hodgkin’s lymphoma, and this week it hit one of its key goals for the year, by turning in its new drug application to the FDA before the end of June. The Seattle company (NASDAQ: CTIC) fell short in its bid to unload all of its $118.9 million in debt, instead getting rid of about $52.9 million of its liabilities.

—Seattle-based Targeted Genetics (NASDAQ: TGEN) has been in survival mode for some time now, and this week it said it will cut its staff down to as little as 10 to 15 employees. The company hopes the cuts will stretch its cash reserves into August, giving it enough time to close a deal to keep the company from closing its doors.

—Sanofi-Aventis CEO Chris Viehbacher traveled to Seattle last week for a global health meeting, and took time to offer a glimpse into his strategy to make the Paris-based drugmaker a bigger player in global health. He also shared his perspective on partnerships with biotech companies.

—Seattle-based Amnis shared its story of how it has rolled out a second-generation version of its sophisticated lab instrument, which combines properties of a microscope with a high-speed cell counter called a flow cytometer. Orders are building up, and this could be the company’s first full year of profitability after a decade in business, says CEO David Basiji.

—Oncothyreon (NASDAQ: ONTY), the Seattle-based developer of cancer drugs, said that its German partner, Merck KGaA, started up a pivotal trial of its immune-boosting therapy, Stimuvax. It’s the second big trial of this drug, which is already being tested against lung cancer. If it’s successful, Oncothyreon will stand to get royalties on product sales.

—AVI Biopharma (NASDAQ: AVII), the Portland, OR-based developer of RNA-based therapies, said it is working on a contract to develop swine flu drugs.

—Bothell, WA-based Mirabilis Medica told its story about how it is developing the first use of high-intensity therapeutic ultrasound waves to treat uterine fibroids, as a non-invasive alternative to surgery.

—MDRNA (NASDAQ: MRNA), the Bothell, WA-based developer of RNA interference drugs, gained full rights to a technology license from Denmark-based RiboTask to make its treatments more stable, and less likely to spark inflammation.

—Global health funding has quadrupled over the past two decades, and while a lot of this new money comes from foundations like the Bill & Melinda Gates Foundation, the biggest financier of this work is now the U.S. taxpayer, according to this intriguing new study from the University of Washington.

—Anthony Fauci, the head of the division of the National Institute of Allergy and Infectious Diseases, called for a transformative research agenda to fight tuberculosis, like the country did for HIV in the 1980s, during a stop last week at the Pacific Health Summit in Seattle.

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Seattle-based Amnis spun out of the University of Washington a decade ago, fired up about developing a new type of sophisticated imaging instrument with potential to enable all kinds of cool experiments in the lab. Yet it never really caught on in a big way, and nobody has yet published a groundbreaking paper in Nature or Science based on showing things only it can do.

Yet oddly enough, in an economic downturn, this could be Amnis’s breakout year. I gathered some interesting insights from CEO David Basiji about how Amnis has souped up its technology, right when its customers suddenly have more money to spend.

Amnis has been selling a tool since 2005 that’s sort of a cross between a traditional laboratory microscope for looking at cells, and a standard machine for counting and cataloging large numbers of cells—what’s known as a flow cytometer. Microscopes are great for providing detailed images, but they are slow, and are limited by what human eyes can see. Flow cytometers are good at giving quantitative cell counts in a sample—like the amount of CD4 or CD8 cells in the blood that signify HIV infection—but they don’t provide images that can provide subtle insights into variation of cells. They can’t tell you critical information about whether a protein target of cancer drugs, like VEGF, is in the cell body or on the surface, where a drug is more likely to hit it.

Tools to give researchers these finely-tuned insights aren’t cheap, and they make up a big market. The market for microscopes approaches $2 billion a year, led by major optics players like Zeiss, Nikon, and Olympus. Flow cytometers generate about $1 billion a year in sales, led by Becton Dickinson and Beckman Coulter. So far, little Seattle-based Amnis, with 33 employees, has carved out a tiny niche, generating $6 million last year for its tool that aspires to offer the best features of both, Basiji says.

Last month, Amnis rolled out a new second-generation product, called ImageStreamX, that it hopes will grab a much bigger share of the market. It’s 10 times faster than the older one, and with a starting price of $200,000—down from $285,000 for the older one. This new product rollout happens to coincide as researchers are scrambling to spend money fast as part of the $10 billion federal stimulus that’s flowing to the National Institutes of Health. Suddenly, Amnis has built up a backlog of 20 orders for its new machine. For a tool that starts at $200,000 and can run up to $500,000 with added features, that can add up to real money in a hurry.

“Before, our sales people used to have to do a lot of education about our product. Now we really have people coming to us,” Basiji says.

The first-generation product essentially created some interest in the Amnis technology, helping it build up a database …Next Page »

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CombiMatrix tried for years to sell sophisticated genetic analysis instruments to laboratories, and essentially got overrun by big competitors like Santa Clara, CA-based Affymetrix and San Diego-based Illumina. But the little Mukilteo, WA-based company is still around, and hoping to flank the big boys in an emerging market that could be more lucrative—diagnostics for earlier detection of cancer.

The company (NASDAQ: CBMX) has been selling DNA microarray equipment since 2004. These are scientific instruments, sometimes called gene chips, that can be used to look at a very large number of genes at the same time to see which ones are expressed, or dialed up or down, in a tissue sample.

CombiMatrix decided a little over two years ago to turn away from marketing to R&D labs, and toward offering a service to cancer physicians, says CombiMatrix CEO Amit Kumar. The plan is for doctors to send in tissue samples from patients with leukemia, prostate or breast cancers, and have CombiMatrix staff look for telltale genetic signs that provide a prognosis of how aggressive their disease may be. The information gets sent back to the doctor, giving him or her an idea of how aggressively the cancer needs to be treated, Kumar says.

It’s still early days in this field of genetic diagnostics, and it’s anybody’s guess whether this can help patients live better or longer lives, but so far about 300 patient samples per month—at $2,000 apiece—are getting tested, Kumar says. About 900 physicians from around the country have bought the CombiMatrix service, including ones from UCLA Medical Center, the University of Michigan, and Cedars-Sinai Medical Center in Los Angeles. It’s a sign of demand for more personalized treatment of cancer, Kumar says, which is diagnosed in 1.2 million people in the U.S. each year. Eventually, CombiMatrix hopes doctors will use its gene chips for an even bigger application, in which healthy people getting annual physicals will get their blood samples screened to spot early signs of five major forms of cancer, Kumar says.

This push into diagnostics is important to CombiMatrix partly because this is a market that Affymetrix and Illumina, which together control about 85 percent of the market for R&D use of microarrays, haven’t yet tapped, Kumar says. CombiMatrix, after capturing a little more than 1 percent of the R&D market, decided to move on to the greener pastures.

“We didn’t have the balance sheet to fight with them on price in the R&D market,” Kumar says. “But we have an advantage on diagnostics, and we’re establishing a beachhead before they turn their attention to the market.”

CombiMatrix will have to play its cards carefully …Next Page »

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NanoString Technologies, a Seattle-based maker of genetic analysis tools, has nailed down $30 million in a third-round venture financing to boost sales of its first product, just as it was running low on cash while it tries to prove itself in the marketplace.

The round was led by Clarus Ventures, and was joined by NanoString’s two founding investors, OVP Venture Partners and Draper Fisher Jurvetson. NanoString, founded in 2004 from the lab of biotech pioneer Leroy Hood at the Institute for Systems Biology, has now raised $47 million since its beginning. This round ties NanoString with Calistoga Pharmaceuticals for the second-biggest fundraiser in the Seattle life sciences industry this year, behind the $42 million round raised by Kirkland, WA-Pathway Medical Technologies.

NanoString’s new money will be used to help the company boost U.S. and international sales of nCounter, an instrument that’s supposed to give biologists a digital readout that says to what extent a given gene is dialed on or off in a tissue sample. The technology had a coming-out party in the pages of the journal Nature Biotechnology a year ago, and booked its first commercial sale last July. It is now competing against some heavyweights in the market for gene expression tools—Santa Clara, CA-based Affymetrix (NASDAQ: AFFX), Carlsbad, CA-based Life Technologies (NASDAQ: LIFE), and San Diego-based Illumina (NASDAQ: ILMN).

Machines that usually do this sort of precise gene expression analysis, known as real-time PCR, make up a market worth $1 billion a year that’s growing at a 20 percent annual rate, NanoString’s top executive at the time, Perry Fell, told me in this feature story last July. It’s the sort of technology that’s supposed to help researchers do a new kind of large-scale genetic experiment, where they might compare 100 genes from 100 different patients with diabetes to see how they respond to certain therapies.

“It’s a great company, the product is terrific, it answers a lot of important questions and gives you better results than competing technologies,” says Chad Waite, a managing director with OVP Venture Partners, who helped seed the company. But he’s quick to add, “We’ve still got work to do.”

Nanostring isn’t profitable, and it ran into bad timing …Next Page »

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Novocell, the San Diego-based developer of stem cell therapies for diabetes, said it has named John West as president, CEO , and a member of its board. West was previously CEO of Solexa, a maker of genome sequencing machines that was sold to San Diego-based Illumina (NASDAQ: ILMN) in 2007 for more than $600 million.

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Nanostring Technologies CEO Perry Fell has resigned as CEO, and has been replaced on an acting basis by chief financial officer Wayne Burns. The Seattle-based company, which makes instruments that provide a digital readout for large-scale genomic experiments, shipped its first commercial product in July. The company was founded in 2004, and has raised $17 million from OVP Venture Partners and Draper Fisher Jurvetson. Fell will retain a board seat, said Sara Morris, a spokeswoman for OVP.

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Not many CEOs of publicly traded companies tell Wall Street that they are willing to sacrifice profits for the next few quarters to preserve the long-term health of their R&D operations. So I was eager to hear Rob Friel, CEO of Waltham, MA-based PerkinElmer, explain why he thinks this strategy makes sense for his company, a giant maker of fancy picks and shovels for biomedical researchers.

The main reason is that years of investing in R&D has put his company in a better position than a lot of people realize, Friel says. Most investors see, for example, that PerkinElmer (NYSE: PKI) has made a lot of money in the past selling a machine called Opera, a sophisticated cell-analysis tool for biotech, pharmaceutical, and academic researchers that prices out at $750,000. In an economic downturn, that’s not a great business.

But thanks to PerkinElmer’s previous investment in continued R&D on the technology underlying the Opera system, Friel says, the company is already in the process of switching over customers to the next-generation tool it calls Operetta. This newer version is faster, better at archiving data from reams of cell analysis experiments, and, at $150,000 to $200,000, much cheaper than Opera. Friel’s confident the new system stacks up well with competitors like Thermo Fisher Scientific’s Cellomics machine, and General Electric’s IN CELL Analyzer.

And if PerkinElmer, a seven-decade old company, can catch a lucky break—like President Obama boosting the National Institutes of Health budget as part of an economic stimulus—then its strategy of continuing to invest in such advanced life sciences research tools might just end up being farsighted. What’s more, because it’s sitting on a relatively comfortable pile of $179 million in cash, PerkinElmer may be able to scoop up cutting-edge technologies from distressed small companies for thrift-shop prices.

“We are taking the approach that we should continue to invest in the long-term, even though it may be difficult for some time,” Friel says.

Naturally, this long-term emphasis is unpopular with Wall Street. PerkinElmer stock has fallen to a five-year low, dipping to $14.11 at Friday’s close. The company now trades at …Next Page »

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Companies usually try to say all the right things about win-win situations when they strike merger deals, but it’s always good to check back after a few months to see if the honeymoon is over. So last week I tracked down Mark Stevenson, one of the principals involved in the November merger of Carlsbad, CA-based Invitrogen and Foster City, CA-based Applied Biosystems.

He had some good news. The newly-merged company, rechristened Life Technologies (NASDAQ: LIFE), is truly keeping its headquarters in Carlsbad, CA, where Invitrogen was based. Plus, while the merged company plans to save $80 million by cutting overlapping administrative jobs, the combined company will employ more people in San Diego County than were employed by Invitrogen, says Stevenson, president and chief operating officer of the new company. Life Technologies even expects to grow this year, despite the global economic downturn.

“We feel that San Diego is a great biotech hub,” Stevenson says. “It has a mix of really good academic centers, clinical translational research, and an entrepreneurial startup environment.”

The rationale of the merger was to bring together the leader in high-powered DNA sequencing machines (Applied Biosystems) with the leader in consumable biological lab supplies (Invitrogen), Stevenson says. The deal provides “critical mass” around the world with a sales force of 3,000 people, and a total of 9,500 employees. The combined company now has a $300 million annual R&D budget, which allows it to place “big bets” on personalized medicine and regenerative medicine that wasn’t possible before, Stevenson says.

A few trends are working in Life Technologies’ favor. About half of its revenue comes from academic customers, who tend to win multi-year federal research grants that are mostly insulated from the downturn, Stevenson says. The pharmaceutical and biotech industries have taken a well-documented beating, which makes it difficult to sell them as many expensive instruments as in years past. But that trend is being offset by economic stimulus programs in China, Japan and other countries that are pumping money into biomedical research, Stevenson says. In the U.S., the company hopes a stimulus plan will include more money for the National Institutes of Health, or at least loosen restrictions on embryonic stem cell research that could enable more private investment to flow into the sector, he says.

As it stands, Life Technologies now has 1,050 employees in Carlsbad, and another 1,475 in the San Francisco Bay Area at its Foster City campus, says company spokesman Bill Craumer. The primary reason to keep the company based in Carlsbad …Next Page »

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Agilent Technologies, the Santa Clara, CA-based maker of instruments for electronics and life sciences companies, is cutting 120 jobs at a plant in Liberty Lake, WA near Spokane, according to a filing with the state Employment Security Department. The layoffs are effective Jan. 30. Agilent (NYSE: A) announced on Dec. 17 it was cutting 500 full-time workers and 300 temporary positions. It has almost 20,000 employees worldwide.

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Helicos Biosciences, the Cambridge, MA-based maker of genetic analysis tools, said today it has reached an agreement to raise $18 million in a private offering of common stock and warrants to buy shares. Helicos (NASDAQ: HLCS) didn’t say how much longer the cash infusion will allow it to operate. The company reported a net loss in the third quarter of $11.4 million, and about $22.8 million of cash and investments left at the end of September.

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San Diego’s Illumina has a pretty amazing story to tell about exponential growth. The maker of genetic analysis tools has beaten or matched Wall Street earnings forecasts for a dozen quarters in a row. It has grown from 239 employees in 2004 to an estimated 1,604 by the end of this year. But when it invited investment analysts to its headquarters yesterday for an in-depth rundown on the state of the company, Illumina’s stock fell 5 percent on another lousy day for the markets.

The Wall Street crowd apparently thinks it’s a tough economy for selling super-sophisticated genome analysis machines, which cost more than $450,000 fully-equipped, plus as much as $200,000 a year in consumable supplies to keep them running. Since Illumina (NASDAQ: ILMN) did a 2-for-1 stock split on Sept. 23, its value has sunk 33 percent, to $27.71 at the close Thursday.

CEO Jay Flatley painted a broad picture of what Illumina does in his opening remarks at analyst day, which I watched on a webcast. It makes tools for high-speed DNA sequencing, genotyping of a segment of an individual’s genetic code, and tests that examine to what extent an individual’s genes are dialed on or off. By bringing down the cost of full genome sequencing to less than $100,000, Illumina is one of the companies that has been ushering in the era personalized medicine, along with its competitors, Foster, City, CA-based Applied Biosystems, Roche, and Cambridge, MA-based Helicos Biosciences. Illumina’s new goal is to bring that price down to $10,000, Flatley said.

“It’s within our sights,” he told analysts.

Getting there isn’t easy. Illumina has had struggles to manufacture its arrays to keep up with demand, mostly from government, academic, and hospital labs, Flatley says. It placed special emphasis—unusual for a Wall Street presentation—on its initiatives to recruit and develop enough talented workers to keep up with its rapid-fire growth.

To give a sense of where that growth is coming from, Illumina brought in Peter Gregersen of the Feinstein Institute for Medical Research on New York’s Long Island. Gregersen, who does genetic research for autoimmune diseases like rheumatoid arthritis, gave a fascinating talk about how the new tools are enabling him to ask new questions.

Autoimmune diseases are a bunch of conditions in which the immune system goes haywire and starts attacking healthy tissue instead of foreign invaders like viruses and bacteria. These diseases affect millions of people—about one in 20 people in the country—with rheumatoid arthritis, lupus, multiple sclerosis, Type 1 diabetes, and inflammatory bowel disease, to name a few, Gregersen said. Their causes aren’t really known, although researchers suspect multiple genes play a role. For rheumatoid arthritis, about 10 genes are thought to be responsible, and for lupus it’s 20, he said.

By looking broadly at the genetic profiles of patients with these diseases—and with costs coming down to the point where large numbers of patients can feasibly be sequenced—new sequencing tools will lead researchers to much deeper understanding of these diseases. “This is an engine of hypothesis generation,” Gregersen said. …Next Page »

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Invitrogen, the San Diego-based maker of lab products, said it plans to change its name to Life Technologies when it completes the acquisition of Foster City, CA-based Applied Biosystems. The new company will trade on the NASDAQ exchange under the ticker “LIFE.” Instruments will continue to be sold under the Applied Biosystems brand name, while chemical reagents will still be sold under the Invitrogen name, the company said. The merger is awaiting approval from European regulators.

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