With new spinoff, biotech goes all-in on DNA sales

Chain reaction: With an eye on exploding biotherapeutic fields, Stony Brook-based Applied DNA Sciences has spun its DNA-manufacturing business into a new company, LineaRx.

A Stony Brook biotech with a growing international reputation for supply-chain security has spun off a new company focused on DNA modification and production.

Stony Brook-based Applied DNA Sciences on Tuesday announced the formation of LineaRx Inc., a wholly owned subsidiary that will concentrate on commercializing the parent company’s extensive experience in the design, manufacture and chemical modification of DNA by large-scale polymerase chain reaction – big news for scientists working on new vaccines, cellular therapies and other advances in burgeoning biotherapeutics fields.

Applied DNA has emerged as a leader in large-scale PCR-based DNA manufacturing, particularly since its 2015 acquisition of West Virginia-based Vandalia Research and its core DNA-sequencing technology, which is based on polymerase chain reaction – a molecular-biology technique used to generate thousands or even millions of copies of a particular DNA sequence.

The biotherapeutics market is “substantial,” Applied DNA said in a statement, and the time was right to go all-in on the proprietary PCR technology, according to President and CEO James Hayward, who said the launch of the LineaRx spinoff “will unlock significant value to the benefit of Applied DNA shareholders and to the world of healthcare.”

“Our proprietary and patented approach to linear DNA manufacturing holds the promise to deliver more efficient, affordable and safer genetic therapeutics to a broad patient population,” Hayward added.

Applied DNA foreshadowed this foray into mass-DNA production in 2017, when it announced an agreement to supply “bulk DNA” for “a leading chemicals company serving the in vitro diagnostics market.”

The new company’s name is derived from “linea” (Latin for “line”) and the classic “Rx” symbol commonly attached to medical prescriptions, which is also partially derived from Latin (in the classical language, the word “recipe” – the “R” in “Rx” – means “to take”).

The big-picture idea is to distinguish LineaRx’s work – specifically, the distinct forms of DNA that result from PCR production – from the other DNA-based technologies offered by Applied DNA, which specializes in supply-chain traceability through the use of DNA-based taggants and readers.

James Hayward: Playing the long game.

“Unlike Applied DNA’s taggant business, in which the DNA is short and nonfunctional by design, LineaRx DNA sequences are long and contain the control elements that allow their expression in cells after specialized delivery to the cells,” Hayward noted, referring to the LineaRX sequences as “gene-sized.”

“The segregation between the divisions enables the companies to differentiate their product portfolios, business units, operations and regulatory affairs,” the CEO added.

The spinoff will be staffed by Applied DNA employees “for now,” Hayward told Innovate LI, and will be based at the parent company’s Stony Brook facility. But “the markets, operations and regulatory requirements are distinct,” he said.

While the mothership has made serious inroads over the last two years providing supply-chain verification – featuring those shorter, nonfunctional DNA-based taggants – in industries ranging from pharmaceuticals and fertilizers to laser printing and national defense, LineaRx’s focus will be considerably more scientific.

Projected markets for the spinoff’s PCR-based DNA include the gene-therapy market (projected to reach $12 billion in global revenues by 2021), DNA-based vaccines (hurtling toward $3 billion in worldwide sales) and immuno-oncology (which should approach $4 billion in international sales early in the next decade, according to Applied DNA).

To capitalize on these rising markets, Applied DNA will license multiple existing patents for therapeutic applications to LineaRx, including “the rights to manufacture DNA via PCR,” the parent company said Tuesday.

LineaRx will also subsume the current activities of Applied DNA as a Contract Research Organization and Contract Manufacturing Organization to the biotherapeutics market.

“By segregating our markets and differentiating our sales teams, we expect to be able to better focus our selling efforts,” Hayward noted. “LineaRx will provide prospective customers and development partners access to a unique portfolio of patented and proprietary linear DNA technologies.”

Applied DNA made a wise call spinning its PCR-based DNA business into a separate entity, according to Clinton Rubin, the director of Stony Brook University’s Center for Biotechnology and a distinguished professor who chairs SBU’s Biomedical Engineering Department.

“LineaRx broadens the options for developers of gene and cellular therapies,” Rubin, who launched several successful startup companies himself, said in a statement. “The management of LineaRx are experienced pros and bring a much-needed and timely asset to the biotech industry, fueling regional and New York State growth in bioscience technology development and commercialization.”

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