It doesnt take a microscope to see how rapidly Signature Genomic Laboratories LLC has grown by pushing the boundaries of clinical diagnostic testing for genetic disorders.


The young Spokane biotech company expects to post $18 million in gross revenue this year, up from $13.5 million last year and $9 million in 2006, says President and CEO Lisa Shaffer, who founded the company with Bassem Bejjani in 2003. To accommodate its growth, it recently bought, remodeled, and moved into the 18,000-square-foot former Sears Roebuck & Co. distribution center at 2820 N. Astor from its previous location in a 12,000-square-foot leased space in the Sirti Technology Center downtown.


We were having a difficult time keeping up with the growth, but weve managed it and now we have the infrastructure to grow without the pains, says Bejjani, who is the companys chief medical officer.


Signature Genomic uses a relatively new technique to diagnose chromosomal abnormalities in human patients. It now has 76 employees, up from 21 workers 18 months ago, when it moved to Sirti from Sacred Heart Medical Centers Health Resource Center, at 44 W. Sixth, Shaffer says. Nine of its employees are salespeople who are scattered around the country, Shaffer says.


The new space can accommodate at least 20 more employees, and the company plans to hire two more directors, who interpret test results, and three more genetic counselors, who talk with physicians about lab results, next year, she says.


The companys growth recently earned it a spot on Inc. magazines Inc. 5000 list of fastest-growing U.S. private companies in 2008. For its list, the magazine measured companies revenue growth from 2004 to 2007. Signature Genomic was ranked 114th overall and fifth in the health-care sector, with nearly 1,800 percent growth over the three-year period. Inc. magazine also ranked Shaffer eighth on its list of top female CEOs of the fastest-growing private companies.


Shaffer and Bejjani, who previously were cytogenetics laboratory director and medical director, respectively, at Baylor College of Medicine, in Houston, came to Spokane in 2002 after Sacred Heart Medical Center promised to invest in their company. They formed a limited-liability company with Sacred Heart in May 2003, launched a commercial enterprise with three employees in March 2004, and by August of that year were making a profit, Shaffer says. Spokane-based Pathology Associates Medical Laboratories Inc. also has an ownership stake in the company.


Last year, Ampersand Ventures, a Wellesley, Mass.-based investment firm, bought half of Sacred Hearts interest in Signature Genomic, which helped the company structure for growth, Shaffer says.


Earlier this year, jVen Capital, a Potomac-Md. based life-sciences investment firm, bought an equity interest in the company. In conjunction with that acquisition, Evan Jones, the principal of jVen Capital, was appointed chairman of Signature Genomics board. Jones previously was co-founder of Gaithersburg, Md.-based Digene Corp., a publicly held biotech firm that specialized in DNA-based diagnostic tests for human papillomavirus (HPV), which causes cervical cancer. Netherlands-based Qiagen N.V. acquired Digene last year for $1.6 billion.


Jones was searching the lab market for the company that he thought was best positioned for growth, Bejjani says. He approached Shaffer and Bejjani after researching Signature Genomic.


Evan Jones is providing the funds and the experience that is going to turbocharge the companys growth and take it to the next stage, Bejjani says.


Shaffer says the partners dont plan to take Signature Genomic public anytime soon, but are not ruling anything out in the longer term.


Shaffer and Bejjani pioneered the use of a technology, called microarray, to detect chromosomal abnormalitiesmissing or extra pieces of DNAin people with mental retardation and birth defects. They use the technology to study a patients DNA quickly, making comparisons between a carefully selected cloned DNA, and both the patients DNA and normal, or control, DNA.


The traditional methods that cytogeneticists use to analyze chromosomal abnormalities are low-resolution, time-consuming, and rely on the clinical suspicion that a test subject has a particular syndrome or chromosomal imbalance, the company says. Microarrays represent the integration of traditional and molecular cytogenetic techniques and provide a larger view of the genome at an unprecedented resolution, it says.


Most tests that Signature Genomic runs are for children, but adults are tested as well, Shaffer says. The practical reason for the analysis is to give a scientific explanation for an abnormality, to give parents the exact odds of a recurrence in future offspring, and to share DNA-specific information about anticipated future medical complications such as cancer and kidney failure, she says.


It allows the family to stop shopping for a disease, Bejjani says. It gives them some answers.


Signature Genomic has developed several variations of its original SignatureChip microarray technology. Two of its recent productsthe SignatureChipWG and SignatureChipOScover 150 syndromes and more than 1,500 important genes, Shaffer says.


The company has done more than 25,000 analyses since 2004, she says. It expects to do 15,000 analyses this year, which breaks down to about 50 a day, Bejjani says. Last year, it performed roughly 10,300 analyses. Since 2004, the listed price for the test has been $1,650. Many private insurers, as well as Medicaid in some states, have paid for it, Shaffer says.


Prenatal tests


In January 2007, the company introduced a microarray designed specifically for prenatal diagnosis, Shaffer says. That microarray covers only specific regions associated with mental retardation and malformation syndromes. Prenatal tests represent about 10 percent of the companys business, she says.


The prenatal market is large and will continue to grow, Shaffer says. It looks like the postnatal market did in 2004.


In July 2007 the company launched its Genoglyphix program, in which other laboratories buy Signature Genomics microarrays for in-house research, she says. The company decided to launch the program mainly because competition in the market is heating up. Previously, microarrays were only marketed to research labs, but the number of diagnostic labs has increased, and microarray makers have started recognizing the value of diagnostic testing and are selling the technology to those labs, Shaffer says.


In addition to microarrays, the company offers clients technical support, its staff members expertise in interpreting test results, and the ability to search its database for similar cases, she says. While labs may have the technology to perform clinical diagnostic testing, interpretation of test results is a key part of the process, and an area in which the company has substantial expertise, she contends. Genoglyphix now comprises about 12 percent of the companys sales.


Weve adapted our business model to represent changes in the market, Bejjani says. Were retaining a larger portion of the market by providing more value.


Signature Genomic plans to expand to other markets next year, but Shaffer and Bejjani decline for now to disclose further details.


When the two cytogeneticists started their venture, they expected it to be more of a hobby than a thriving business.


We thought it would be a boutique lab. This is becoming the standard of care all over the world, Bejjani asserts. The market was ready. We read it right and gave them what they wanted.


Bejjani and Shaffer attribute the companys fast growth partly to the rapid pace at which demand has grown for microarray testing. Shaffer says the postnatal market is about halfway through its transition to microarray-based clinical diagnostic testing from the traditional method, and the company has more than 50 percent of the available market share.


Signature Genomics customers include clinical geneticists, neurologists, pediatricians, neonatologists, obstetricians, and the research community, primarily in the U.S. and Canada, but also worldwide. Shaffer says that international sales represent an untapped market for the company, but international markets have diverse health-care systems so the company has to perform a careful analysis before entering them.


The company largely has been immune to the effects of the national economic cooling, mainly because of the nature of the health-care industry, Bejjani says.


Babies are still being born, and people are still getting sick, he says.


Despite its growth, the company hasnt had difficulty finding workers on its technical side. Shaffer, a Tri-Cities native, says that one of the main reasons she wanted to set up the company in Spokane was the abundance of available young workers here who are recent graduates of the universities in the area.


The company has had more trouble finding directors, who interpret lab results and need to have doctorates in genetics. Shaffer says she thinks that people were waiting for the company to mature, and that finding qualified candidates has been easier lately. The company also is looking for more computer programmers.


Signature Genomics main challenge now is marketing its products and educating clinicians in how to order such tests, he says.