Next Generation Sequencing: Helicos's VP Speaks Out

Following my post last month Helicos Part III: To Buy or Not to Buy?, I had an opportunity to interview the Chief Operating Officer and Executive Vice President of Helicos BioSciences Corp. (HLCS), Steve Lombardi. It was a very informative conversation from both a scientific and investor standpoint, and I'd like to take the time to cross post some especially exciting excerpts. The complete transcript of the interview, as well as the background research on Helicos can be found here.

The Heliscope is on track for a commercial launch by the end of the year:

SL: ....we've had two production prototype HeliScopes running since around the first of the year….they are the place where we do all our testing. We're also doing all of our systems integration, so one is always running and generating results while we're putting new parts on the other doing the integration testing. During the IPO period we brought these prototypes up, and were confident enough with the performance we saw from them right after the IPO that we began the build of the commercial HeliScope. The instruments we will be shipping are on the factory floor today....Our goal is to ship product by the end of the year.

Concerning the speed and accuracy of the Heliscope:

SL: Well we've quoted 25MB/hour for sequencing applications and 90MB/hour for our gene expression application, and but those are ballpark numbers. We haven't set commercial specs yet because we are still in the process of doing the validation and verification. We wouldn't have started the commercial build if we had we not seen performance off the prototypes that gave us confidence that we could get near those specs. I can't give you definitive numbers on this but we would have not have started the build if we were not confident in the system

SL:....the difference between the 25 and the 90 is to get to accuracy. For gene expression applications where you can use tags, you can use compressed sequence space and can deal with errors in an orderly manner, we can run the instrument at 90MB/hour. For sequencing applications where you don't have that control, what we can do is again take advantage of the single molecule approach and do something that we call multi-pass sequencing…..we can literally melt off the strand that we synthesized, and resequence the same templates all over again so that we have two independent measurements.….two sequencing runs to get accuracies that are good enough.

SL:....We think we can solve this through process development because as you know were still dealing with research pilot-grade manufacturing.... The result will be that we're all of a sudden at 90MB/hour for single pass sequencing, and we think were currently going to be industry best at 25MB/hour.

On the price of the Heliscope NGS system:

SL: We haven't set price yet, it will be more expensive than anything out there, but what we've been saying is that there's two key reasons why. One is our system configuration; we provide with the HeliScope a not-inexpensive image processing tower that in near-real-time converts the raw data to base calls, reliable bases, so that at the end of the run, you have the ability to just port that data to your bioinformatics engines.... The second reason is more strategic....what Bill (Efcavitch) did was to design an instrument with headroom in imaging capacity. 3 billion strands is today's density but we have licensed technology....where we can potentially increase the density of that by a factor of four. That's 12 billion strands that we would be able to look at, and the instrument has built into it this imaging capacity. Think of it as headroom; an instrument that will get people to the $1000 genome. From a marketing perspective, we believe we can look at a customer and say this instrument will get you there. How you will improve performance and how you will get decreases in cost is by buying the next kit that will have in it the better flow cells, the more dense flow cells, the better chemistry cycles that use less reagent and have more stability to them. Through that process we really believe in the future that we can give people $1000 genome performance....To me the really exciting thing about this from a marketing guy's perspective is any time Bill makes an improvement in the assay, any customers' application benefits from it because the assay is agnostic to the application.

SL: It gives the customer confidence that an instrument will last because it's not a cheap investment and it also gives us the ability not to have to turn around and make a continued investment in engineering, we will continue to do maintenance engineering and make the thing better and cheaper but we don't have to build another instrument for a while. So what we've done with our R&D expenses, and you saw this right after the IPO, is that we've started a CSO office to do genomic collaborations; we've hired Patrice Milos from Pfizer. She was their head of pharmacogenomics and executive director of their whole molecular profiling at Pfizer development. She's building a world class genomics team to do collaborations with customers. So Bill focuses on making the assay cheaper and what Patrice will continue the effort to work with customers to build all the applications and publish good science with them on the HeliScope.

The Vision Behind Helicos:

SL: The whole focus of this company from day one was not to be a replacement for ABI sequencers. The goal of this company was to enable, through the price performance and the simplicity of the workflow that you've described, an ability to let people ask new and more important questions of the genome. So we believe that we can create value by growing the market, not just replacing the current sequencing marketplace…. medical resequencing is a huge opportunity, but it's not the only opportunity. There are people incredibly interested in looking at whole genome methylation studies, making quantitative measurements of the genome, not just quantitative measurements of the transcriptome; applications like copy number variations, ChIP sequencing and measuring the amount of a transcription factor binding to DNA. These measurements are all very important and we fundamentally believe we've got the best technology when you get to quantitative apps because we do so little to the sample in prepping that we don't perturb what is digitally in that cell. We've found a tremendous interest from people beyond the genome centers, they're mostly in the academic health centers and people doing translational research. The fact that you can do single molecule measurements, and you don't have to build a genome centers' worth of infrastructure causes something to resonate when they realize that the patients DNA could be sitting on the HeliScope and being measured. It resonates and we're getting tremendous interest about it and finding market segments within this life science area that no other technology can get to. A lot of these competing companies are saying "we're going to find every ABI sequencer and replace it". That's not what we want to do, we want to add value to the marketplace because there are places where there is lots of money, lots of samples, and lots of known genome annotations but still we think there will be new genome annotation and people will do genomics and genetics in new ways which will grow the market. And that's our whole idea.

SL: Cancer stem cell research is a hot area; people are figuring out how to purify them, but quantitative measurements of those stem cells to understand the functional genomics of how regulate themselves is hugely important and we've got people looking to us to collaborate; they look at single molecule measurements and they look at the ability to do these digital experiments on sequence and quantitation and say "this could be the answer."

I highly recommend reading the complete transcript to anyone who has been following the analysis of, or is interested in investing in HLCS. In my opinion, this is definitely an unusual opportunity to be able to evaluate a first generation technology company such as Helicos with a very comprehensive amount of candid information. The interview can speak for itself without any further commentary, sufficed to say that speaking with Mr. Lombardi reinforced my prior long position following an analysis of the science and technology driving HLCS.