The Providence-based DNA sequencing company Nabsys is shutting its doors after nearly eight years in operation.
Nabsys was formed in 2007 as a merger between two research projects started by University scientists. The company’s mission was to improve genome mapping and analysis using “strategic deployment of a novel positional sequencing platform” for DNA, according to the Nabsys website. At its peak, the company employed nearly 50 workers, many of whom earned salaries of more than $100,000, the Providence Journal reported.
Nabsys has yet to fully disclose the exact details of its shutdown, but it appears the company is closing permanently due to a lack of funding.
John Thompson, former director of genomic technology at Nabsys who left the company in April 2014, said he started receiving calls from former co-workers about three weeks ago asking if he knew of any job openings. “They had gone to a company-wide meeting expecting to hear about how the company was going to merge with someone else,” Thompson said. “Instead they found out that they were shutting the doors, so it was kind of unexpected.”
Thompson, who holds stock in Nabsys, said the company was starting to experience financial issues around the time of his departure.
“It’s not unusual,” he said. “All startups and biotechs are in a constant fundraising mode, and you have to keep raising money every year to keep the doors open.”
In its early stages, the company experienced success with securing funding. Nabsys received nearly $1 million in state-provided startup funding and over $50 million in venture capital funding. Point Judith Capital, a venture capital firm co-founded by Gov. Gina Raimondo, invested $4 million in Nabsys in 2009. But it appears that funding began to decline in early 2014, Thompson said. David Martirano, co-founder of Point Judith Capital, did not respond to multiple requests for comment.
The state has aimed to revitalize the Jewelry District by encouraging startups like Nabsys, which generate job opportunities. The closure of a promising biotechnology company like Nabsys should serve as a reminder to Rhode Island about the importance of state funding, Thompson said.
“If the state wants to have a thriving biotech industry, they’re going to need to do something to help it,” Thompson said. “They have to be actively providing the resources (the companies) need, which the state hasn’t really done.”
Darrell West, vice president of governance studies at the Brookings Institution and a former professor of political science at Brown, said a state should take note when a company like Nabsys goes out of business.
“It makes the public cynical when there’s state money in businesses (that) haven’t been successful,” West said. “But people also have to be aware that the success rate is low in this field.”
The company was co-founded by Professor of Physics Xinsheng Sean Ling and his former student, Adjunct Professor of Biotechnology Barrett Bready ’99 MD’03. Initially, the two could not agree upon the best scientific approach toward DNA sequencing. Ling favored a physics-based approach, while Bready supported a perspective informed by computer science.
Bready, who served as president and CEO until 2014, edged Ling out of the company because of the dispute, said Ling, who attributed some of the company’s later struggles to the approach Bready adopted. Bready did not respond to multiple requests for comment.
“There are a lot of things going on when you take something out of academia and put it in a for-profit company,” Bready told The Herald in 2013 in response to his dispute with Ling.
Ling said he and others are still conducting active research in the DNA sequencing field. “I am extremely saddened that the Nabsys name has been tarnished,” he said. But “the science Nabsys originally set out to do is not dead. It is very much alive.”
Several other faculty members also served on the Nabsys board, including Professor of Computer Science Eli Upfal and Professor of Computer Science Franco Preparata, both of whom declined to comment on Nabsys’ shutdown.
When a biotech startup fails, it is important to remember that every factor has to be in working order for the company to succeed, West said.
“The research has to be good, the financing has to be in order and you have to have a really strong management team,” West said. “If you mess up any one of those things, generally it’s fatal to the company.”