WisBusiness: GenTel Makes Big Leap with Acquisition of GlaxoSmithKline Protein Chip Platform

FITCHBURG – Alex Vodenlich, president and CEO of GenTel Biosciences, likes challenges. He got one when he took over GenTel in 2003 and completely changed the direction of the company.

“We basically started over from scratch back then,” he said.

Now he has another challenge with Tuesday’s announcement that his company has purchased the protein chip platform assets of GlaxoSmithKline, Inc., (GSK) one of the world’s largest drug companies. Financial details of the transaction were not released.

The deal is considered a major coup for GenTel, according to analysts. Paul Domanico, who runs a consulting firm in Durham, N.C., said the GSK technology will give GenTel the capability to develop sophisticated “biomarker applications necessary to improve our understanding of disease.”

“This puts them ahead of everyone in their market and makes them a force to recognize,” sad Domanico, a former vice president for technology at GSK.

GenTel, which is in the Fitchburg Technology Campus, is a privately held, six-year-old protein chip-based life sciences company. Vodenlich said the acquisition is a major step forward in GenTel’s growth and its ability to serve the biotech and drug industries.

WisBusiness.com editor Brian Clark spoke with Vodenlich – a native of Racine and the son of immigrants from the former Yugoslavia – about the Glaxo purchase and the company’s growth potential.


Brian Clark: What is the Glaxo protein chip platform?

Alex Vodenlich: It is a system that integrates instruments, software, statistical tools and know-how to enable scientists to quickly develop, process and analyze quantitative, highly multiplexed protein microarrays.

Clark: Who would your customers be?

Vodenlich: They include large pharmaceutical companies and other biotech firms that can now turn to GenTel for arraying specific antibodies or antigens, developing and validating specific assays, and screening their pre-clinical and clinical samples.

Clark: Why is this acquisition significant for GenTel?

Vodenlich: It would have taken us a long time to duplicate such a platform. We will have the platform running, validated, and commercially viable within the first quarter of this year.

Clark: How did this deal come about?

Vodenlich: GenTel’s relationship with GSK began roughly two years ago, when GenTel began a collaboration with GSK to supply and evolve the GenTel protein array slides.

Anna Fisher, formerly of GSK, evaluated GenTel’s protein array slides and found that the data generated using GenTel slides and Glaxo’s system gave her the best results. We got to know her well and hired her in November. She is now vice president of assay development.

Clark: How big could this be for GenTel?

Vodenlich: It has great potential. We could be handling 50,000 patient samples at a time for drug companies. It will be a challenge. But we believe we’ll be ready if that comes to pass.

Clark: You worked for PanVera for about a decade. When did you make the jump to GenTel?

Vodenlich: PanVera was sold for the first time in 2001. The company that bought PanVera was acquired by another company, which sold off most of those assets to Invitrogen. So essentially, PanVera became Invitrogen in March of ‘03. I left in January of ’03 and came to GenTel, about six weeks before Invitrogen became the owner of PanVera.

I was vice president of contract services and before that was vice president of sales and marketing. I didn’t have anything to do with it the last four years, but now contract services is a pretty vibrant part of Invitrogen’s business here at their Madison site. They do contract screening and assay development for pharmaceutical companies.

Clark: What attracted you to GenTel?

Vodenlich: I had the opportunity to be the CEO of something and take on the challenge of building a company. Truth be told, it didn’t really matter which company, as long as it was in the life science arena so I could use my experience.

The first couple of years here at GenTel, let’s say, were pretty darn rocky. It wasn’t quite all that I was told it was and we had to make a lot of hard choices. We basically restructured and refocused the company and started over from scratch. So that is what nice now is that what we have here at GenTel Biosciences is what came from my efforts.

Clark: How did it change?

Vodenlich: Well, the surface chemistry technology that the company was founded on – which came from the Wisconsin Alumni Research Foundation (WARF) – didn’t pan out. The founders had ideas about how to take that technology and develop it further, develop intellectual property around it and then license that intellectual property. The business model was a licensing model.

That didn’t play well for investors, it didn’t play well in the post 9/11 marketplace and what GenTel really needed to become was a product and marketing oriented company. That’s where my experience was.

So I looked at the technology and said “that’s not quite going to do it,” so let’s look for other technologies and apply them toward an emerging market, which was the protein chip and protein microarray market.

That was the orientation I brought to it. And that’s not to say that the company’s existing technology, the experience and the know-how and equipment, weren’t valuable because they allowed us to assess very accurately these surface technologies. And the reason we started with the surface is because the surface that you print your proteins on is critical to the performance of the chip.

So the first employee, Bryce Nelson, and our second employee Todd Strother, were really excellent surface chemists and developed a lot of proprietary techniques for characterizing surfaces. That allowed us to look through many different technologies and further develop the one that became our technology.

Clark: What do you mean by ‘characterize?’

Vodenlich: Looking for uniformity. The last thing you want is for one side of your chip to be different from another. You want every part of the surface of the chip to be identical in binding capacity, in background fluorescence to give you a very consistent product. We knew how to look at thickness, uniformity, hydrophobicity (stickiness) and binding capacity.

We developed all those things over the course of the first two years into a product that was called Path. We licensed the trademark using technology that came from another company, not from WARF. But it turned out to be the best surface technology, so we went with it.

Clark: What came next?

Vodenlich: That was step one, to build the platform, the foundation. The next step was to build the actual tests on the chip. That’s what we have been doing for the past two years.

We’ve become quite good at it. The third part is “how do we drive our products into many different market segments” and create many different businesses out of it.

One is to just sell the blank slide, which we do to several companies, including Invitrogen. They buy the bare slide and do their own manufacture. We are also in discussion with them to build products for them under their own label. That’s another source of business and revenue.

Then there is the service business, where someone hires us to build them a test which can go all the way from building and validating it for them to then screening their samples for them. So we have launched a whole fee-for-service testing service called ‘Aperture.’

If you have patient samples that you want screened against any of our chips or arrays, we can do that. Or we can build you custom ones, too.

We are also actively seeking grant funding, going after SBIR and NIH sources. That helps us innovate and do research on the NIH nickel.

Clark: How much have you gotten from those sources?

Vodenlich: In the four years that I have been here, we have applied for nine grants – eight phase one and one phase two – and we’ve gotten six of them, which is pretty good. The phase ones were for roughly $800,000 and this last one, the phase two was for $1.2 million and that was centered around developing our allergy chip. It’s a two-year grant and we got it in May of last ’06.

We submitted two more in December and we will submit two more in April. They are all phase one grants looking at novel applications for protein arrays.

Clark: Tell me about the company’s growth.

Vodenlich: In the last year, we have doubled our revenue over last year and we expect to double it again this year. When you are starting out, doubling something small doesn’t necessarily mean a lot. But now we are getting up to the millions of dollars, which is more impressive.

The question now is how do we accelerate the business? We’ve built the foundation, we’ve framed the house with different tests and now we have to pull it all together and build it out and even do the landscaping.

Having acquired the assets from Glaxo really accelerates that process. We can use their protein chip platform for product development, in the service business and it will be critical for our fee-for-sample screening business.

We are now in about 5,000 square feet and hope to add another 3,000 if things work out as we hope. It would be right here in this building in the Fitchburg Technology Campus. We will need more space. We will expand manufacturing and we’ll have to hire more people to do the work. Over the 18 months, we have gone from nine to 18 employees.

Clark: How will that work?

Vodenlich: If a big pharma company has a clinical trial, in which they have collected tens of thousands of patient samples, and they want to analyze those samples for five or 10 different proteins to see if they are going up or down based on treatment of their drug. Well, they can come to us and ask us to build a test that measure those proteins. We can do that.

Then they’d want to see the validation data, based on 50 to 100 patient samples. If that looks good, they might ask us to screen 50,000 more patient samples. To do that, we need this robotic automation platform. That is the system we acquired from Glaxo.

They developed this specifically for this purpose and to serve their internal customers. But they decided to outsource that function because they decided is not part of their core business. So the next step is to go out and win those contracts not just from Glaxo, but from other pharma and biotech companies. That’s our goal and we’re already on our way to a degree.

Our first really big contract is with a company in the UK. We are building them a cancer chip and we are right in the middle of that now. It’s going well, and once it is done we will validate it on our validated platform then they will start sending us serum samples from patients.

We will screen those samples on our chip and send them complete reports that they can use to build their business, which is more on the diagnostic end. The company is called Protein Logic. We’ll be announcing something down the road, but we hope to do more work with them. And we’re also working on several other contracts.

Clark: You also acquired some high-powered research talent as part of the Glaxo deal?

Vodenlich: Well, in the course of the nitty gritty negotiations, when it looked like we had a good shot at getting it, we learned that people in the Glaxo protein chip group might be looking for work. It turned out that Anna Fisher and a colleague of hers were interested in joining us. We had already worked with them for 18 months trying to optimize our slide for their platform, so we’ve know her for a lot longer than she has been a GenTel employee.

We made them offers in November, but the Glaxo deal wasn’t done. But we moved ahead and built them a lab in the Research Triangle Park in North Carolina near where they were working. They worked with Glaxo to understand the assets we are getting and they have helped oversee the build-out.

When the deal was signed, the majority of the assets came here, and we are set up down there. The goal for this first quarter is to be operational and Anna is already starting to validate assays and get more chips and arrays done and shipped up here to Madison.

Clark: What is next for GenTel?

Vodenlich: I think the big thing we need to work on – now that we have established a good system – is to layer on the quality assurance. We have started on a plan, but it will take a while. If we are going to supply products to folks like Invitrogen – and they have come in and audited us – we need to have certain systems in place from a manufacturing standpoint. We’re working on that.

Secondly, if you are going to handle tens of thousands of clinical specimens and blood samples, you have to have a whole level of quality assurance for that. We are beginning to get that in place, too, so that when you receive samples they are bar-coded and handled properly and not mixed up.

These clinical trials for big pharma are very expensive and take a lot of effort for them to collect samples under stringent guidelines. The last thing we want is for them to doubt our ability to do the work correctly. The data that we report to them has to be of the highest quality and accuracy.

Clark: How about beyond that?

Vodenlich: Well, if these markers, or chips, have diagnostic utility, we would be in a whole different level of regulation. Our business now is built around a research use only up to and including pre-clinical trials. But if our allergy chip – which can test for 30-50 things at a time, is validated against the skin test or the RAST test that allergists use now, we would have some critical decision making to do.

Do we partner with a diagnostic company to bring that to market and take it through the FDA or do we try to do it ourselves? We might well license the technology to a diagnostic company. We will see down the road.

In the emerging protein array market, what everyone is looking to do is validate the markers, the proteins in blood that correlate highly to a specific disease or a stage of a disease. There is a lot more work to be done. There will be a lot of protein arrays and chips used and tested as people use them as tools to find out what 10 or 20 proteins in the blood can give them a pattern. Or give a really nice snapshot of a particular disease stage to help determine if a drug treatment is working or not.

Clark: Do you do much in the lab these days?

Vodenlich: Me? No way. I got out of there a while back. I stay involved in the science, but not the nitty gritty. It’s very interesting stuff, but there is just not enough time in the day.

Besides, Bryce, who is the VP of R&D, is really on the cutting edge of this field. And now we have Anna, who has the whole pharma perspective along with automation and validation. Just by meeting with them, I learn a lot.

Clark: How many hours do you work a week?

Vodenlich: If I work more than 50 hours a week, I’m not being very efficient or we need to hire more people. As I tell folks here, this is a marathon, not a sprint. We want people here for the long haul. We do not want them to burn out. If working weekends is routine, then something is wrong.

I want our employees to be here five years from now, with occasional sprints. I force people to take vacations, in part so they will be sharper and more productive. We don’t live to work. We work to live. The happy medium is somewhere in between. But I’d like to think working here is fun and interesting, too. But I want people to spend time with their families, too.