Proligo supplies biotechs with DNA raw materials

BOULDER — There’s an old business lesson learned in Colorado during the mining heyday of the 1800s: While a few people got rich risking life and limb digging for the mother lode, more got wealthy by supplying the shovels, picks, flour, bacon and coffee that were the miners’ staples.

So it goes with Proligo LLC, a manufacturer and supplier of the chemicals used to make DNA and other nucleic acids. While many flashy companies use nucleic acids for a wide range of applications in microbiology, drug development and genomics, or the study of genes, much of Proligo’s business is in quietly supplying those companies with the raw materials they require.

?Our company is based on the processing of genetic information, and genetic information is the core of many new industrial activities,? said Wolfgang Pieken, president and chief executive officer of Proligo, based in Boulder and Hamburg, Germany. The field of genomics, for instance, is bringing about a revolution in the understanding of the molecular mechanisms of disease. Companies involved both in the sequencing of genes and in developing drugs that target specific genes need a supply of nucleic acid for their work.

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Proligo employs 200 people, who are about evenly divided between Boulder and Germany. In Hamburg, the company produces nucleic acids used to make short DNA fragments called oligonucleotides. Biotechnology and pharmaceutical companies worldwide produce their own oligonucleotides from materials supplied by Proligo and other companies, though few around the world operate on as large a scale as Proligo.

Whereas in Germany the company focuses on producing building-block nucleic acids for manipulation by other companies, in Boulder Proligo builds those acids into more complex materials. Products produced in Boulder include custom-built oligonucleotides and RNA, or ribonucleic acid, a molecule similar to DNA that helps to decode the genetic information carried by DNA. As part of this operation, Proligo recently announced a strategic alliance with Lorus Therapeutics Inc. to help production of Lorus’ anti-cancer drug, GTI-2040, as it entered Phase II clinical trials.

Proligo itself was spun out of NeXstar Pharmaceuticals in 1998 and recently became a fully owned subsidiary of Degussa AG. The Dusseldorf company’s subsidiary, Degussa Corp NJ, acquired the outstanding 49 percent interest in Proligo LLC from Gilead Sciences Inc. for $14.3 million, while at the same time providing another $18 million for strategic expansion of Proligo’s nucleic acid supply capacity to the genomics and genetic medicines marketplace.

Proligo showed $25 million in revenues last year, with the Hamburg side already profitable and the Boulder side expected to turn profitable, perhaps within a year. Meanwhile, Pieken’s company is expected to heavily invest in new technology that may ramp up genetic sensing in a way similar to how mechanized mining changed the gold fields of Colorado.

And it may well expect its supply business to grow as well, said Ralph Cristoffersen, the chairman of the board of Ribozyme Pharmaceuticals Inc. (RPI) in Boulder.

Chrisofferersen, who gave up his chief executive and president positions at RPI this year and now splits his time with new venture capital projects, said the biotech industry is a lot more active than many people outside of the industry believe.

?We raised money last year before the market went bad, and we’re actively developing our suite of (bio-pharmaceutical drugs),? he said. ?The biotech industry, from an economic perspective, may be depressed on the market, but many of these companies are continuing to develop their products, full speed.?