The company’s WOLF® Cell Sorter uses patented, microfluidic based sorting and laser-based technology capable of detecting mammalian and microbial cells to immensely simplify the process of analyzing and sorting distinct populations of cells from a heterogeneous population.
Whether you’re involved with drug discovery, diagnostics, or basic research, Nanocellect is a company that should be on your radar screen. In this interview with Jose Morachis, PhD, Co-Founder and President of NanoCellect, we discuss the company’s history, its unique technology, future goals and so much more. Enjoy!
Interview with NanoCellect President, Jose Morachis, PhD
Cade Hildreth: What is your background and how did you become involved with NanoCellect?
Jose Morachis, PhD: You can think of me as a biotech-nerd that follows biotech business trends and exciting new science like a sports fan would. I did undergrad at UC Riverside where I did several research projects including summers at UCR, Rockefeller University and Amgen. One of these got me hooked on transcriptional regulation of genes and how it changes in cancer. I followed that path into graduate school at UCSD and joined Dr. Beverly Emerson’s lab at the Salk Institute where I uncovered mechanisms of how cells are programmed to react to cellular stress.
While a grad student I co-founded ScholarNexus with my colleagues Will Alaynick and Nate Heintzman with a goal of advising—and eventually seeding and accelerating—startups. The premise has been to find new promising technology, build a team, find funding, and translate that technology to make an impact beyond academic publications. This led to the creation of 3 successful startups (and a few that did not survive) including SweetSpot Diabetes (acquired by Dexcom Inc.), Arima Genomics, and NanoCellect Biomedical.
Cade Hildreth: Founded in 2009, what is the start-up story of NanoCellect? How did it become a company specializing in microfluidic flow cytometry platforms?
Jose Morachis, PhD: NanoCellect is a great story of how scientists and engineers from very different backgrounds came together to build a new approach and solution to flow cytometry. The initial concept of NanoCellect’s chip technology was born in the laboratory of Professor Yuhwa Lo at UC San Diego Jacobs School of Engineering. Dr. Lo thought it may be worth exploring a way to further develop the initial concept by spinning it out. That’s when he was introduced to us at ScholarNexus.
As soon as I learned a few of the details behind the technology, I became quite interested in learning more. I never liked the flow cytometry equipment I had access to during my graduate research; I found those legacy instruments intimidating and complex to use–even though they could greatly improve my research. So, we arranged a meeting over coffee where I first met Dr. Lo in person. In that short meeting, our interest and fascination on developing this very promising technology caught fire.
It’s hard to describe, but you get immediate gut feelings about the chemistry between individuals and for some reason we all developed this great trust and mutual respect to work together. This is critical in order to develop something really technically and commercially challenging—you need to focus on tech and not egos or drama.
This was in November 2009 and probably one of the worst times to start a company: during a recession. We had minimal traction, limited experience, and I was still finishing grad school. The chances of getting venture capital to build this company were zero, but that was not going to stop us from developing a very promising platform. So, we turned to what we could do, and that was to write grants. NIH and other federal agencies have a mandate to fund innovative small companies to address unmet technical and health needs.
Within that magical meeting over coffee, we decided to start a company and apply for an upcoming NIH SBIR deadline in December. The company was first formed by Professor Yuhwa Lo, his graduate students Frank Tsai and later Sunghwan Cho, along with myself, Will Alaynick and Nate Heintzman from ScholarNexus. Yuhwa and his team had the strong engineering background, while we (ScholarNexus) brought a diverse biology background. With luck on our side, we found out later in 2010 that the NIH was going to fund our first grant proposal and off we went.
To save money (and have health insurance), I kept a post-doc position part time and together as a team we moonlighted until we could get enough momentum. Eventually I was able to go full-time to lead the company as founding CEO and we were also fortunate to have Sunghwan Cho join as our CTO. Our company was initially called NanoSort but several years later we decided to change it to NanoCellect Biomedical to put a focus on the “cell”.
Microfluidic technology was still a very early field when we started NanoCellect and more so when applied to flow cytometry and cell sorting. However, traditional cell sorting technology was long due for disruption. Flow cytometers and specifically fluorescence activated cell sorters (FACS) took off in the 80’s and 90s’ to primarily investigate immunology applications. Traditional instruments are very expensive, difficult to use, costly to maintain and are designed to be housed and operated in large shared core facilities.
However, recent growth in single-cell applications and immuno-oncology require new and modern approaches that demand an easy-to-use system for every lab. Sowe set out to leverage our microfluidic cell sorter chip and develop the easiest to use cell sorter that could produce high-quality sorting results, high cell viability, and be priced well below traditional cell sorters.
Cade Hildreth: You have a number of well-known investors who have backed the company. Who are some of these investors and how did they become involved?
Jose Morachis, PhD: Our goal during fundraising was to be very strategic on who and when we brought in our investors. We were funded primarily by SBIR grants and contracts from the NIH during the initial stages of our company. Those SBIRs ($11.5 million) allowed us to really focus on our R&D and design a fully functional platform without distractions of an immediate commercialization mindset that comes from most VCs.
After developing our first fully functional Alpha Prototype, we decided we were ready to push ahead and work with a design-for-manufacturing team to help us get to our next phase. That’s when I met FusionX Ventures’ Managing Partner, Ken Hood, who led our Series A round late 2015. FusionX had just been created as an offshoot from D&K Engineering to fund very promising hardware technologies. D&K Engineering, based in San Diego, then became an obvious choice to work with in developing and manufacturing our instruments.
After successfully developing our Beta Prototype, we quickly produced a handful of units for early adopters that were eager to purchase and use our cell sorter. This also allowed us to figure out our best applications and beachhead markets. Quickly we figured out that single-cell analysis and cloning would be our focus. So, our next move was to transition from an R&D focused startup into a commercial company.
Illumina Ventures became an obvious choice to lead our Series B round to leverage their strong connections and brand in the genomics and life science fields. We also brought in complementary VC’s to provide significant value-add to our team. This included Anzu Partners, Vertical Ventures, and Genoa Ventures, as well as a strategic investment from Agilent Technologies. This helped us access key individuals with a ton of experience and great coaching.
For example, Jenny Rooke has been a trailblazer in making bets on life science tools companies and helping them grow. Similarly, Paul Conley representing Vertical, brings experience from many technology companies including his role as a board member for 10X Genomics. While Tad Weems and Darlene Solomon at Agilent Technologies started as an early-access customers and eventually decided to become more involved as investors.
Cade Hildreth: What is the WOLF Cell Sorter?
Jose Morachis, PhD: The WOLF Cell Sorter is a fluorescence activated cell sorter that was designed for the emerging applications of single cell assays. The instrument allows scientists to analyze, sort, and dispense individual cells into test tubes or wells of a standard 96- or 384-well plate with minimal training or expertise requirements.
The microfluidic cartridge design allows for low pressure, gentle sorting and no cross contamination between experiments. It has the smallest footprint of any cell sorter in the market, and maintenance is minimal since all the fluidic components are part of a disposable cartridge kit.
Cade Hildreth: What is the importance of gentle cell sorting, and how does it benefit stem cells, in particular?
Jose Morachis, PhD: Cell sorting requires rapid, precise analysis of each cell by a laser. Cells are funneled through a cuvette (traditional cell sorters) or into a microfluidic channel (NanoCellect’s approach). Traditional cell sorters rely on high pressures (up to 70 psi) to push cells through the cuvette and a droplet generating nozzle.
This process creates a lot of stress on cells and reduces viability of sensitive cells. And even if cells survive, their gene expression profile is altered due to the rough droplet sorting. NanoCellect’s microfluidic technology is a gentler process using less than 2 psi of pressure without droplets.
Stem cell research, with gene editing tools like CRISPR, has been a major research focus. However, stem cells are sensitive to droplet sorting, which is a major reason researchers have a strong interest in the WOLF Cell Sorter. With the WOLF Cell Sorter, we have helped stem cell and iPSC researchers achieve multiple fold improvements in sorting viable single cells and clones.
Cade Hildreth: What is the importance of the WOLFViewer software and how does it benefit users?
Jose Morachis, PhD: The software is one of the most important factors in our product’s success. It has allowed us to democratize cell sorting technology beyond flow cytometry core facilities and highly experienced operators. We designed a user-interface that allows new users to be trained in half a day and be ready to independently sort their cells in their own labs. While simple, it has powerful features to analyze the data, create experimental templates, and easily generate reports.
Software is sometimes an underappreciated component of instrumentation. No matter how great our technology is, we knew it would be an unsuccessful product if we did not have super easy-to-use software.
Cade Hildreth: What types of markets does NanoCellect primarily serve?
Jose Morachis, PhD: Our three major markets are single-cell genomics, gene editing, and cell line development for antibody therapeutics. All of these markets have workflow requirements where sterility and viability are critical for their success. Other growth areas we see an uptick of interest in are companies doing immuno-oncology and cell therapy research, as well as applied markets involving plant cells and microbes, like bacteria and yeast.
Cade Hildreth: What types of clients does NanoCellect serve and which client segment is growing most rapidly?
Jose Morachis, PhD: Our primary and fastest growing customers come from biopharma…especially those with very active research departments. These range from young VC backed biotechs with limited or no access to cell sorting technology to large pharma that want to use the best technology to stay ahead of the competition.
We also have a considerable number of academic and government funded institutions—many of which have become repeat customers.
Cade Hildreth: What differentiates NanoCellect from other companies offering cell analysis and sorting technologies?
Jose Morachis, PhD: It is well known that large legacy companies are unable to stay innovative and nimble. For this reason, traditional cell sorters have not changed much since the 80s and 90s. We have only seen small incremental improvements in those traditional instruments with minimal innovation. Our microfluidic approach and strong focus on ease-of-use differentiate us from other technologies.
More importantly, we improve the quality of the cells sorted with the WOLF compared to other technologies.
Cade Hildreth: What are NanoCellect’s 5-year company goals?
Jose Morachis, PhD: We are laser focused to grow our commercial traction and build on our brand. This requires building a great reputation with our customers and always being available to support their workflows. It also requires a great user experience. To do this we work closely with complementary companies to provide our customers downstream solutions. For example, we are a 10x Genomics Compatible Partner product for sample prep. We also have workflow solutions with QIAGEN to support cell sorting upstream of their single-cell RNA-seq kits.
Longer term, we will continue to be an innovative company with a strong pipeline of new cell analysis technologies that will enable researchers to analyze and sort cells based on 2D & 3D images. These new platforms are actively being developed by our strong R&D team and our ongoing collaboration with Dr. Yuhwa Lo’s lab at UCSD.
These R&D efforts are largely supported by continuing support from the NIH that has most recently funded several projects related to imaging-based cell sorting.
Cade Hildreth: What types of investments has NanoCellect made to position itself as an industry leader in microfluidic flow cytometry platforms?
Jose Morachis, PhD: Our team has invested in a strong IP portfolio in-house as well as exclusively in-licensed technology. We have also invested in state-of-the art equipment, facilities, and know-how that very few companies possess. Investment in our human capital is probably the most important piece in continuing to make NanoCellect a leader in our field. We have been lucky to successfully recruit and retain excellent engineers and scientists to drive our new microfluidic designs and product pipeline.
Our Scientific Advisory Board includes the past President of the International Society of Advancement of Cytometry and the founding CTO of Caliper. To stay ahead, we also recruited Chris Neary as CEO to increase our commercial capabilities and drive strategic growth. We are leveraging Chris’ many years of experience in the life sciences and diagnostics sectors, within startups and large companies to build commercial, marketing, and development teams.
Cade Hildreth: How can people learn more about NanoCellect?
Jose Morachis, PhD: The best place is to visit our website or reach out to us directly. Our next conference will be ASHG in Houston coming up in mid-October.
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