Ambion Spin-Off Asuragen Brings In $49M Via Series A

Formed early this year, Asuragen Inc. completed a Series A financing that secures the diagnostic company $49 million.

The Austin, Texas-based firm is a spin-off of Ambion Inc., which sold its research products division last December to Applied Biosystems Group, of Foster City, Calif.

The new company, which took on the diagnostics and services portion of Ambion, intends to use the proceeds to fund general operating needs and to pursue licenses for the development of cancer diagnostics and therapeutics.

While Asuragen currently has no therapeutic products in its pipeline, targeted therapies and molecular diagnostics are "becoming more and more commingled and interdependent," said Vivian Wong, Asuragen's marketing manager, who added that the company is actively looking for opportunities in both areas.

San Francisco-based Telegraph Hill Partners led the Series A round, which included investments from Houston-based Growth Capital Partners and other firms that supported Ambion.

In December, Applied Biosystems bought Ambion's research products division for $273 million. The rest of the company became part of Asuragen under the lead of Matt Winkler, the founder and former CEO of Ambion, who helped kick off the new company with $35 million in initial support.

Added to the $49 million raised through the Series A, Asuragen is "very well resourced," Wong said, and has not discussed when the next round of funding might occur.

Asuragen is composed of diagnostics and services divisions, as well as a discovery group. It focuses on microRNAs and their roles as cancer diagnostics. The company has more than 100 employees.

Its portfolio includes Signature LTx (Leukemia Translocation Panel), Signature ACP (Ashkenazi Carrier Panel) and controls and standards engineered using its Armored RNA technology. The LTx and ACP diagnostic products are for research use only and can help reduce overall time and cost. Signature LTx, for instance, consolidates up to 12 different assays into a single reaction, enabling results for one to 96 samples in about five hours.

Armored RNA technology has been used in in vitro diagnostics. It stabilizes RNA transcripts from nuclease degradation by packaging them in a protective protein coat.

"Companies take out a license using that technology to make controls for their diagnostic kits," Wong said. "We also have retail catalogue items that we sell for armored RNA."

Asuragen does not disclose its revenues, but Ambion was expected to have about $52 million in total revenues for 2005, according to the December press release that announced Applied Biosystems' intent to buy the research products division.

In addition to its diagnostics products, Asuragen has expertise in cGMP custom development and manufacturing, and it is growing its molecular biology service offerings to help with scientific discovery and drug development. Asuragen would like to become a fully integrated company with commercialization capabilities, Wong said.

In April, the company signed its first major agreement, with Digene Corp., of Gaithersburg, Md., focused on the worldwide marketing and distribution of Asuragen's Signature cystic fibrosis screening products. Asuragen also agreed to develop a next-generation CF test, Signature CF Expand, which expands the mutation panel to include ethnic-specific mutations that can be used in carrier screening. The test should be commercially "available the end of this year," Wong said.

Under terms of the deal with Digene, Asuragen received an up-front payment and is entitled to regulatory milestone payments. Specific terms were not disclosed.

While the company does have the one marketed cystic fibrosis product, and possibly two by the end of the year, it plans to focus mostly in the area of oncology, but it is "open to other opportunities" that might arise, Wong said.

Concurrent with the Series A funding, Asuragen announced the appointment of Rollie Carlson as president. Carlson previously worked at Abbott Laboratories, of Abbott Park, Ill., where he managed the worldwide Vysis molecular diagnostic business.