Codon Devices “Streamlines” Operation, To Focus on Synthetic Biology

Codon Devices is switching strategic gears. The privately held Cambridge, MA-based company, which makes genes for large drugmakers running experiments, said today in a statement that it has “streamlined” its operation to put more of its resources into product development partnerships for its synthetic biology program, which engineers new biological products with potential to do lots of things, like clean up oil spills or remove contamination from soil.

Of course, “streamline” is business-speak for “layoffs,” which Xconomy was able to confirm have occurred at the company, according to genetics professor George Church of Harvard Medical School and Jim Collins, a bioengineering professor at Boston University. Both scientists, who are Xconomists, serve on the company’s scientific advisory board, and Church is a co-founder of the firm.

Codon didn’t say in its statement how deep the cuts went, how much cash it will save, or how many people are left on the payroll. CEO Brian Baynes didn’t immediately return a phone call seeking comment. The company’s synthetic biology program, called BioLOGIC, has attracted partnerships with Merrimack Pharmaceuticals and Agrivida.

“This gets them back to the original direction of the company, which was not really manufacturing, but more about synthetic biology,” Church said. “This was a good way to scale up infrastructure to get where they wanted to be with synthetic biology.”

The company is supported by some big-name venture capital firms, including Highland Capital Partners, Khosla Ventures, and Kleiner Perkins Caufield & Byers. The company closed in March on the second installment of a $31 million financing.

Codon apparently had trouble meeting demand for custom-manufactured genes from September 2007 to February 2008, said John Mulligan, chairman of Blue Heron Biotechnology, a competitor based in Bothell, WA. The manufacturing snag, which appeared to coincide with moving offices, caused Codon to refer some customers to Blue Heron to get their orders filled, Mulligan said.

“Customers complained that they did not hear about the problem until their genes were already late,” Mulligan said. “Something serious happened.”

The two companies have had their tensions. Codon sued Blue Heron for patent infringement, which the parties settled earlier this year. Demand has been surging from large pharmaceutical companies for industrial quantities of genes that can be custom-ordered for big experiments, Mulligan said. It’s not unusual to run into manufacturing problems for custom-ordered genes, in fact, Blue Heron has run into the same problem itself, Mulligan said.

“It’s a complex manufacturing process,” Mulligan said. “Everybody in the business has had a glitch here and there.”

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