For Vancouver’s Boreal Genomics, home proved a better bet than Silicon Valley

Andre Marziali's biotech company started with a machine invented in a basement suite that could clean up DNA samples. Then his team developed a blood test for cancer

Credit: Martin Dee

Lab Work: Andre Marziali holds a prototype of the cartridge his firm’s OnTarget device uses to process blood samples

Andre Marziali’s biotech company started with a machine invented in a basement suite that could clean up DNA samples. Then his team developed a blood test for cancer

One day in September 2014, Andre Marziali gathered his team of 23 scientists in the lunch room of Boreal Genomics Inc. The director of engineering physics at UBC had co-founded the campus-based company, which was working on a technology for early cancer detection. Marziali had bad news: he needed to shrink the team, and about half of them would lose their jobs.

“It was pain and shock for a lot of people, but the first thing that happened is one of the people got up and gave me a hug,” he recalls. Somebody wrote “Boreal Class of 2014” on a whiteboard, and one by one everyone signed their name. The message is still there.

For three years, Boreal had tried a more aggressive approach to growth. In June 2011, Boreal’s board hired a new CEO, Nitin Sood, who had extensive experience in bringing new products to market. Sood was based in Silicon Valley, so Boreal opened an office and soon a lab there.

The company had recently commercialized a machine called Aurora that Marziali, David Broemeling and Joel Pel had invented in the two former UBC students’ basement suite. About the size of a counter-top bread-maker, the device uses rotating electric fields to separate a DNA sequence from contaminants like soil.

But as the new office opened, Marziali’s team modified their technology, developing a second instrument called the OnTarget that can weed out any strand of DNA that comes from a tumour cell—effectively a blood test for cancer. By 2013, most of the company was focused on developing cancer tests.

Boreal made other changes, accumulating a CFO, chief commercial officer and chief medical officer at its Silicon Valley outpost. The 40 employees were evenly split between the two offices, but California was burning significantly more capital than Vancouver, due to higher salaries and rent. “We had a lot of good people down there,” Marziali notes. “It was just the wrong time to bring an evolving technology into what was still a very early liquid biopsy market.”

The board decided to close the California office and directed cuts in Vancouver. Boreal recovered, signing supply and distribution deals with companies that use the OnTarget for clinical tests and studies, and several who lost their job in Vancouver were invited back. Marziali, who did a PhD and post-grad work in physics at Stanford University before coming back to his alma mater UBC in 1998, calls it a return to the company’s lean roots.

“I get that culture down there—you spend a lot of money, grow the company, make it super visible and hope that someone comes and invests large amounts of money,” he says, referring to San Francisco biotech giant Grail Inc., which is raising $1 billion in its second financing round as it also tries to develop an early cancer test. “The problem is that you’re betting on an incredible level of success. I’ve seen so many companies do that and just tank.”

Marziali considers Boreal a testament to the benefits of a less flashy but still nurturing environment for academic startups in Vancouver. The company started in 2007 in Marziali’s lab, where he led research in applying physics and engineering to solving problems in molecular biology, particularly DNA sequencing. Marziali acknowledges an “exemplary” level of support from UBC and his home department of physics and astronomy—an arrangement that lets him spend about a quarter of his time at Boreal while keeping his university post. In contrast, many U.S. universities have strict limitations on professors’ startup ventures.

In the early days, Marziali also received crucial government support—Genome BC and the National Research Council’s Industrial Research Assistance Program were two backers—that he says helped Boreal grow big enough to make a convincing pitch to investors. In 2010, Boreal raised US$6.9 million in its first institutional financing round, including a significant investment from Arch Venture Partners, Forbes magazine’s top-ranked health-care venture fund. A second round in 2013 raised US$18 million.

The OnTarget has unique potential because it can detect 96 common mutations seen in at least eight cancer types before symptoms develop. Marziali estimates that once the technology is scaled up to large test volumes, one test could cost as little as $150, compared to those currently in use for late-stage cancers, with price tags of $1,000 or more. He and radiation oncologist Dr. Alan Nichol, in collaboration with the BC Cancer Agency’s BC Generations Project and others, recently launched a pilot study using 1,000 samples. If that effort succeeds, a larger national survey will follow.

Boreal recorded its first profitable quarter ending in December 2016. “We fully expect within the next year a bigger company will come along and absorb us,” Marziali says. “Which would be great because then you can spend somebody else’s money, do bigger clinical studies, more commercialization, in terms of the overall goal to get this technology out there to be useful to people.”

Genetic Engineering

Genome BC’s Technology Development Platform launched in 2002 to allow sharing of equipment, expertise and engineering resources. Andre Marziali, co-founder of Boreal Genomics, says it provided training for several of his scientists and let the company quickly show proof-of-concept of proprietary technology via its rapid prototyping facilities.