APDN adds to DNA production capacity

Applied DNA Sciences (APDN) has bolstered its manufacturing capacity for DNA by acquiring Vandalia Research, a US firm specialising in the large-scale production of specific DNA sequences using polymerase chain reaction (PCR) technology.

Vandalia operates as a contract manufacturer and was formed in 2004, spinning out of Marshall University in West Virginia, and the takeover provides APDN with another revenue stream in addition to its security focus.

APDN provides DNA markers that are used to protect product such as electronics and textiles from counterfeiting and saw first-half revenues top $5m in the first nine months of this fiscal year, a rise of 142 per cent that chief executive Jim Hayward said reflects the start of a "transition from pilot to full commercial deployments."

The full text of the press release appears below:

---

Applied DNA Sciences acquires assets of DNA manufacturer Vandalia Research
 
- Strengthens large scale DNA production and broadens market reach

Applied DNA Sciences has acquired the assets of privately held Vandalia Research for $1.5m in cash.

Vandalia's core technology and intellectual property portfolio, allow for the large-scale production of specific DNA sequences using polymerase chain reaction (PCR). PCR can amplify a few copies of a piece of DNA, generating millions to billions of copies without the impurities of fermentation.

Vandalia's Triathlon PCR systems are self-contained and modular, can work together in mass production or can be used individually throughout the world, offering the advantage of delivering DNA locally and securely. The enclosed design should facilitate compliance with drug manufacturing guidelines in our quest to DNA mark individual doses as a major initiative in the war against counterfeit drugs.

The acquisition provides APDN with established supply relationships across key companies in the biotechnology, pharmaceutical and diagnostic markets where Vandalia DNA is already used as a business-critical therapeutic, diagnostic and reagent and provides the company the opportunity to cross-sell its DNA-based supply chain security solutions. There will be no lapse in DNA production as we fulfil Vandalia's current backlog and expected orders through the remainder of the current quarter and beyond.

A new capacity for APDN will be the ability to manufacture longer DNA sequences valuable in gene therapy, DNA vaccines and diagnostics. These types of DNA are distinct from APDN's security markers and represent a new entry into medical markets, where management believes there are ample opportunities for APDN's broader platform.

Derek Gregg, former CEO of Vandalia and co-inventor of its Triathlon platform, will join APDN as a consultant focused on the sale of DNA to the biotechnology and drug development industry. The company intends to move the physical assets of Vandalia to its headquarters in Long Island before the end of 2015.

The benefits of PCR

A major concern in fermentation-based DNA production is contamination of the therapeutic DNA with residual DNA from the bacterial host. It is difficult to remove all of that bacterial DNA residue, and so residual bacterial DNA contamination in DNA vaccines or gene therapy is a persistent concern in DNA-based therapeutics.

PCR-based DNA preparation completely obviates that (important) concern. This differential is the major quality improvement obtained via the ADNAS-Vandalia technology.

"Expanding our manufacturing capacity through the acquisition of Vandalia's Triathlon PCR machines is opportune as we move toward converting pilot projects to commercial deployment, and creates, we believe, the world's largest manufacturing capacity of DNA in bulk using PCR," said Dr. James Hayward, President and CEO of APDN.

"Self-contained production, paired with our On-Site DNA Authentication Program that can be done with simple training, opens the opportunity for rapid deployment of DNA marking in response to the anti-counterfeiting needs of the military, border protection, law enforcement agencies and supply chains."

"We are in the midst of a coordinated effort to use SigNature DNA to bring supply chain security to pharmaceutics and foods and, as part of this, it is essential that we immediately begin the process of becoming compliant with cGMP (Current Good Manufacturing Practice) guidelines so that we may improve these supply chains just as we have in cotton. We believe that Vandalia's Triathlon can help us to expedite this process. We look forward to working with our new colleagues from Vandalia, creating demand for DNA and setting new records for its production."