BioWorld International Correspondent

MUNICH, Germany - Biopsytec Holding AG raised €5 million (US$5 million) in a second round of private equity financing. The company, which has become well known for its diagnostics for bovine spongiform encephalopathy (BSE), specializes in genetic analysis in agricultural animals.

Given consumer and government worries in Europe about livestock diseases such as BSE and foot-and-mouth disease, improving traceability within the production chain has been an important priority for the agricultural sector.

"Our technology has been widely used for traceability of food production," Arno Heuermann, Biopsytec's CEO, told BioWorld International. "But it was originally developed with breeding purposes in mind. In both cases the technology is the same, but the businesses are different."

The Berlin-based company's identification of linkage disequilibrium (ILD) technology scans for genomic mismatches, as a way of looking for certain traits in a particular animal or in a small population. "ILD was developed to build databases on large commercial animals, such as cows and pigs," Heuermann said. "We can trace particular genes for traits in a herd," which helps with both breeding and agricultural productivity.

While Heuermann declined to specify which traits are most interesting, he said that breeding for those elements can bring improvements of as much as 10 percent in output. "The main thing is that the animals are healthier. The genetic markers are not for bigger animals or that sort of thing, but for keeping them healthy. That's where we see real improvements."

In May 2002, Biopsytec entered a technology-sharing partnership with Epigenomics AG, also of Berlin. Biopsytec has exclusive rights to use technology developed by Epigenomics in plants and animals. Epigenomics will use technology that Biopsytec originally developed for agriculture in human medicine. (See BioWorld International, May 1, 2002.)

Comparing medicine and agriculture, Heuermann said, "The lab side and the data mining are the same, but the businesses are different. We are focusing on the agricultural/animal side." On the company's future plans, he added, "We want to be the ones with the intellectual property, the ones licensing diagnostic tools for breeding and quality control."

Lead investor for the current round was SAM Sustainability Private Equity LP, of Guernsey. Other investors included Deutsche Venture Capital, of Munich, and Industrie Management Holdings, of Berlin.

Investments in the company's first round of funding in August 2000 totaled €2.5 million and were led by DVZ, of Munich. The government has not played a role in financing Biopsytec, unlike many other biotechnology companies in Germany.

Biopsytec remains privately held and does not disclose either sales or profit figures.