July 27, 2005

Shrinking the Lab

Labcyte makes lab equipment that dispenses liquids in nanoliters, which can save time and money.

By Andrew Madden

Company: Labcyte (formerly Picoliter)

HQ: Sunnyvale, CA

Founded: 2003

Management: CEO Elaine Heron was previously general manager of the molecular biology division of Applied Biosystems (NYSE: ABI). She has also been vice president of marketing for gene research firm Affymetrix and a founder of Molecular Dynamics, now a division of GE Healthcare. Founder and CTO Richard Ellison previously worked in new printing technologies at the Xerox Palo Alto Research Center (PARC).

Investors: In July 2005, the company closed Series C financing totaling $21 million, led by Cross Atlantic Partners, Hambrecht & Quist Capital Management, and the Bay Area Equity Fund, with participation from existing investors Abingworth Management, Alloy Ventures, Delphi Ventures, and the Sprout Group.

Business Model: To keep down their costs during the drug discovery process, companies and universities are turning to miniaturization processes. But there's a catch: standard lab equipment was not designed for dispensing tiny traces of substances. Labcyte has developed a proprietary technology for using focused acoustics, or ultrasound, to precisely transfer droplets down to 2.5 nanoliters. By transferring compounds directly into assay plates, the technology eliminates the need for tips, washing, and intermediate dilutions. Their system retails for around $225,000.

According to the company, six major pharmaceutical companies have purchased its systems, including GlaxoSmithKline and Astro Zeneca, as well as schools, including Vanderbilt University. Clients report improved results in the form of time savings, according to the company, which leads to a return on investment in the new equipment within about a year. Labcyte also expects to deploy its acoustic technologies for nano-dispensing liquids in the fields of genomics and proteomics.

Competitors: Genomic Solutions, Gilson, Agilent, Tecan, Thermo Electron

Dirt: Labcyte is making the lab "cool" again -- at least for investors. Twenty-one million dollars is a big round for a lab equipment company. Clearly, Labcyte's backers believe that the company has the goods to go head-to-head with its larger competitors. While other companies have nano-liquid dispensers, Labcyte appears to be unique in its use of ultrasound, which allows it to work with smaller traces of liquid. Another plus: Labcyte's products would probably help to round out the offerings of larger competitors -- making it a potential acquisition candidate.

Source:

• Labcyte website