[Corrected 11/24/14, 12 pm. See below.] San Diego-based BioNano Genomics, which has taken a fundamentally different approach to analyzing the genome, says today it has closed on $53 million in Series C financing to expand its commercialization efforts in North America, China, and Europe.
Legend Capital, a Beijing-based venture fund affiliated with Lenovo’s controlling shareholder, led the round with the Novartis Venture Fund. They were joined by two other new investors, Federated Kaufmann Fund and Monashee Investment Management, and existing investors Domain Associates, Battelle Ventures, and Gund Investment.
“We’re delighted to have a Chinese financial partner who can help us chart the waters there,” CEO Erik Holmlin said by phone. BioNano sold its high-throughput Irys System to the Chinese Academy of Sciences in Beijing just over a year ago, and Holmlin said Legend will be “an amazing partner as we begin expanding our footprint in China.”
At $53 million, the round amounts to one of the largest private financing deals in the U.S. life sciences sector this year. Including the round, the company has raised a total of roughly $92 million since BioNano moved to San Diego three years ago as part of a turnaround.
BioNano does not use the short-read, next-generation genome sequencing technology employed by San Diego-based Illumina (NASDAQ: ILMN) or ThermoFisher Scientific’s Carlsbad, CA-based Life Technologies business.
Conceptually speaking, next-gen sequencing is comparable to assembling a jigsaw puzzle with tens of millions or hundreds of millions of pieces. In constrast, Holmlin said, “We’re putting the jigsaw puzzle together with really large pieces.” BioNano’s Irys System does not produce the resolution that comes with sequencing every DNA base pair, but Holmlin said, “all the functional components are going to be in the right place.”
BioNano’s Irys System uncoils DNA molecules into long contiguous strands that are tagged with fluorescent enzymes at specific sites and drawn by an electric current into proprietary “nano channel” arrays, where they are aligned for high-resolution imaging. The resulting images of tagged DNA molecules are converted into digital data.
BioNano says its technology makes it possible for researchers to identify a host of crucial structural variations in DNA strands that cannot be discerned by next-gen sequencing. Each strand consists of hundreds of thousands of base pairs, and the enzyme labels enable researchers to map variations that include the location of a gene on a chromosome, and the existence of stretches of DNA that are repeated, inverted, or deleted.
In a statement today, Legend Capital’s executive director, Darren Cai, says the ability to understand structural variations is recognized as an essential tool for applying genomic information in diagnosing and treating human diseases. For example, in most cases of chronic myelogeous leukemia (and some cases of acute lymphocytic and myelogenous leukemia), a piece of chromosome 9 and a piece of chromosome 22 break off and switch places in a translocation known as the Philadelphia chromosome.
[Corrected to show quote attributed to Jim Blair was from Tracy Warren] According to a spokeswoman for the company, Tracy Warren, a general partner of Battelle Ventures and chairwoman of BioNano’s board, describes the Irys System as “the missing link between sequencing data and actionable clinical data.”
“Customers are adopting our system to address a heretofore unaddressable core of genomic variation called structural variation,” and that makes BioNano’s Irys System complementary to next-gen sequencing machines, Holmlin said. As a result, BioNano is selling its Irys System to many of the same academic research institutions that buy equipment from Illumina.
With the latest round of funding, Holmlin says, “We will use this capital to accelerate global sales of Irys and to invest in next-generation innovation to address the untapped, multi-billion dollar genome-mapping market.”
In addition to the Chinese Academy of Sciences, BioNano has disclosed Irys sales to Australia’s Garvan Institute of Medical Research, Israel’s Tel Aviv University, UC Davis, and The Genome Analysis Centre and Wellcome Trust Sanger Institute near London.
Campbell Murray, managing director at the Novartis Venture Fund, is quoted in the company’s statement as saying, “We saw that BioNano has the only commercial genome mapping system that can systematically analyze clinically important [structural variations], including DNA rearrangements and recombinations, and were inspired to provide capital and expertise to BioNano.”
Murray and Legend Capital’s Cai also are joining BioNano’s board of directors.