With unique tech, Applied DNA gets into in vitro

This is a test: A proprietary DNA-production method owned by Applied DNA Sciences could score big-time with in vitro testing labs.
By GREGORY ZELLER //

A Stony Brook-based biotech has embarked on a five-year mission to safeguard in vitro diagnostics.

In vitro studies, sometimes called “test tube experiments,” involve microorganisms, cells and other biological molecules outside their normal biological context. In the molecular biology era, such tests – performed not only in test tubes but in flasks, petri dishes and other laboratory vessels – have increased in both frequency and importance.

Now, Applied DNA Sciences – a provider of DNA-based supply chain, anti-counterfeiting and anti-theft technologies, as well as product-genotyping and product-authentication solutions – has announced an agreement to supply “bulk DNA” for “a leading chemicals company serving the in vitro diagnostics market.”

For security purposes, Applied DNA is not naming its new partner. But the Stony Brook firm said in a statement Thursday that the five-year agreement, which includes a three-year renewal option, should generate about $500,000 in annual revenues starting in Fiscal Year 2018, with pro-rated revenues expected to start building by the fourth quarter of FY2017.

The partnership includes quarterly shipments of DNA products produced through the biotech’s proprietary polymerase chain reaction technology, which Applied DNA acquired through its 2015 acquisition of West Virginia-based Vandalia Research Inc.

The tech enables the very-large-scale production of unique DNA sequences, “quicker and cleaner” than traditional culture-produced methods, according to Applied DNA. And the new deal, noted President and CEO James Hayward, highlights the growth opportunities for the proprietary DNA-production technology.

“The ability to offer PCR-based DNA production that is more efficient and cost-effective is unique and a significant competitive advantage in the marketplace,” Hayward said Thursday. “This long-term supply agreement reflects efforts being made to cross-sell our cutting-edge capabilities to both existing and prospective pharmaceutical and diagnostics customers.”

James Hayward: A-OK with PCR DNA.

Other potential applications for DNA products engineered through the polymerase chain reaction technology include vaccines, reagents, bio-agricultural uses and gene therapies in both existing and emerging markets – a rich cornucopia of opportunities “that we believe hold the potential to yield similar, long-term, recurring-order flow,” Hayward noted.

“Together with an increasing number of inbound inquiries from prospective customers that recognize the benefits of PCR-produced DNA in their product, we believe this business should see growth going forward,” the CEO added.

That’s good news for a company that his missed the mark on its last several quarterly earnings reports, but continues to build momentum in key verticals.

In recent months, the biotech has announced various DNA-based security deals with the U.S. Department of Defense and breakthrough molecular detective work identifying genetic markers unique to cottons grown in Uzbekistan, a known harbor of forced human labor. Giving international manufacturers and retailers the ability to know if slave labor contributed to their product line is an enormous potential vertical for Applied DNA.

The company has also added on to existing contracts pitting its anti-theft protocols against European car thieves, while assembling a major-league Strategic Advisory Board including energy industry titan Robert Catell, PepsiCo Vice Chairman Mehmood Kahn and former New York City Police Commissioner Raymond Kelly.

And all that followed the November 2016 announcement of a $5 million capital infusion for Applied DNA, in the form of a large-scale purchase of stock shares and warrants by a single “healthcare-dedicated institutional investor.”


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