Quantum Dot Com

With the company’s name and logo taped to the glass door, the unpacked boxes, an empty reception desk, and young scientists bustling about, it could be any Silicon Valley company in the chaos of starting up. But this, it quickly becomes apparent, is not an ordinary startup. You begin to notice the difference a few doors past the coffee maker. Just down the hall, in a windowless room lit by the faint glow of a green laser shooting through a maze of optical equipment, you’ll find the company’s crown jewels, tiny particles emitting a variety of colors. These are quantum dots-crystals made up of only a few hundred atoms. Viewed through an ordinary optical microscope, they twinkle like stars in a moonless sky.

Quantum Dot Corporation-and its handful of high-profile venture capital investors-is betting these glowing specks will change how biologists view the cellular world. The particles measure only a few nanometers (billionths of a meter) across. Because this is about the same size as a protein molecule or a short sequence of DNA, quantum dots could be near-perfect beacons for lighting up biological events. They come in a nearly unlimited palette of colors and can be linked to biomolecules to form sensitive probes to identify specific compounds and track biological events.

Fluorescent tags are ubiquitous in medicine and biology-used in everything from HIV tests to imaging the inner functions of cells. But the dyes that biologists now rely on have serious drawbacks. For one thing, different types of dye molecules must be used for each color, and a matching laser must be used to get a dye to fluoresce: a green laser for a green dye, yellow for a yellow dye, and so on. The colors emitted by the dyes tend to bleed together, and using a combination of lasers is unwieldy. These limitations mean that, in practice, you cannot look for more than a few types of biomolecules at a time. What’s more, dyes fade quickly, so imaging is a one-shot affair.

Quantum dots have none of these shortcomings. You can make sharply colored dots simply by varying the size of the nanoparticles and make a rainbow of these colors fluoresce with white light or a single-color laser. Furthermore, the nanoparticles continue to shine for much longer than dyes do. These improvements allow you to simultaneously tag various biological components-say different proteins or various sequences of DNA-with specific colored nanodots.

That kind of flexibility could mean a cheap and easy way to screen a blood sample for the presence of a number of different viruses at the same time. It could also give physicians a quick take on a patient’s condition. For instance, the presence of a particular set of proteins is a strong indicator that a person is having a heart attack; quantum dots could offer a rapid and simple test to detect these proteins. On the research front, the ability to simultaneously tag multiple biomolecules could provide a powerful way to watch the complex cellular changes and events associated with diseases, providing clues for drug discovery.

Dot of the Iceberg

The challenge, of course, lies in transforming this raw scientific potential into a viable business. That’s where Palo Alto, Calif.-based Quantum Dot comes in. Like any other fledgling technology company, it has to attract financial backing by wowing investors and working out a viable business plan-as well as fending off emerging competition by building up a strong technology portfolio (see sidebar: “Quantum Competition”). But for Quantum Dot the challenges go beyond those for a typical startup. Not only does it want to succeed commercially, it wants to do so by going where few companies have gone before: using nanotechnology (manipulating and building materials on the nanometer scale) as a tool in medicine and biology.

Even in basic research, let alone in the commercial world, the interface of nanotech and biology is largely uncharted territory. Quantum dots have intrigued physical scientists seeking new kinds of electronic and optical devices for more than a decade, but few biological researchers gave them a second thought. To succeed, the startup company has to bring together biotech and nanotech. Adding to the difficulty, most venture capitalists-whose backing these days is critical to almost any startup-have displayed an aversion to anything as esoteric sounding as nanotechnology. They may rush to fund dot-com startups, but put the word “quantum” in front of the word dot and eyes begin to glaze.

Those forming Quantum Dot, however, are betting that the potential of this cutting-edge technology will ultimately make those glazed eyes snap into focus. The company is co-founded by a pair of consummate Silicon Valley insiders, Joel Martin and Bala Manian, who between them have helped launch a half-dozen technology companies in the fields of medical devices and instrumentation. Within Quantum Dot’s first eight months of existence, the entrepreneurial pair had raised $7.5 million in venture funding. CEO and president Martin says getting investors excited is a matter of timing: Catching a technology just as an explosion of scientific advances brings it to the edge of commercial practicality. “You have to have something that will be on the market in the next couple years,” says Martin. “It can’t be so far out that it’s on the bleeding edge.” At the same time, he adds, “it’s important that the technology captures people’s imagination.”

In the Glow

By 1997, however, when Martin began shopping for new technologies, several groups of researchers had begun to make quantum dots brighter and more practical. With these refinements, the potential for using them in biological imaging and diagnostics was becoming increasingly evident. It began to look as if it would be possible to turn nanoparticles into sensitive probes that would hone in on specific biological targets, all the time glowing in distinctive colors that said: “Here it is!”-with the “it” being a virus, a protein of great interest, perhaps some specific DNA.

The movement toward biological applications was a long process, with no single breakthrough leading the way. But a key realization, says Paul Alivisatos, a chemist at the University of California, Berkeley, who contributed a number of important advances, is that “quantum dots are macromolecules, the size of proteins. Once you realize that the size scales are compatible, you say, “Okay, these things can go together.” Adds Moungi Bawendi, an MIT chemist who has worked on the particles for more than a decade: Biology is “not what we initially thought about. But in some sense it’s a much better application-it’s a natural.”

Such a natural, in fact, that Alivisatos and collaborator Shimon Weiss, a physicist at Lawrence Berkeley Laboratory, and graduate student Marcel Bruchez, started discussing business opportunities in the mid-1990s. “We were stumbling” around, trying to form a company to exploit the biological potential of quantum dots, says Alivisatos. Then, in 1997, they got a phone call from Joel Martin, who was wandering around Silicon Valley looking for the new new thing. In a nanosecond, Alivisatos was inviting the venture capitalist-and his million dollar check-to the Berkeley lab for a visit.

The potential of quantum dots was confirmed in late 1998 by the publication of two breakthrough papers in the journal Science demonstrating that the nanoparticles could be made compatible with living systems and used as bio-probes. One paper was by Alivisatos and his Berkeley co-workers, the other by Indiana University chemist Shuming Nie. Both groups of researchers had learned how to dissolve the nanoparticles in water and coat the tiny crystals with an outer layer to which they could readily bind biomolecules capable of recognizing proteins or DNA. The research confirmed the potential of quantum dot probes for sensitive diagnostic tests, even genetic analysis.

As part of the research, the scientific teams demonstrated ways to detect proteins inside and on the surface of a cell, suggesting a tantalizing possibility-it might be possible to attach a single glowing nanodot to, say, a protein, as a way to watch cellular events. Such observations could provide a far greater understanding of how cells work-and what can go wrong-providing valuable clues in the development of future pharmaceuticals and therapeutics.

A month after the Science papers, Quantum Dot was started. Martin and Manian signed leading nanodot researchers to the company’s scientific advisory board and gave them a financial stake in the outfit’s success. That meant making partners out of long-time rivals Alivisatos, Bawendi, Nie and Paul Mulvaney, a chemistry professor at the University of Melbourne. For good measure, the startup hired Bruchez and Stephen Empedocles, newly minted PhDs from Alivisatos’ and Bawendi’s chemistry labs, as staff scientists. The company licensed key technologies from the universities, garnering an intellectual property portfolio covering the use of quantum dots in biology.

Martin says that while the scientific value of the technology “clicked” the first time he saw it, the path to commercialization was not as obvious. Clearly, the startup didn’t want to compete directly with diagnostics and analytical instrument giants such as Roche and Perkin-Elmer, and just as clearly it didn’t want to merely supply quantum dots as commodity items. The answer, says Martin, was a business model imitating Intel. The chip maker aims to put its microprocessors in everyone’s computer; Quantum Dot would try to make its nanoparticles an essential piece of diagnostics kits and analytical instruments. The strategy was to make the large manufacturers customers, not competitors.

Quantum Dot’s business plan calls for the company to begin shipping test quantities of dots to potential customers this winter to allow them to assess the value of the nanoparticles in diagnostic testing and drug discovery. Deals with instrument makers will come later, says Martin. He estimates the startup has enough cash to survive for another year but says it plans to raise more money this spring.

The company expects to have a commercial product by mid-year, and Martin says initial applications will likely come in drug research. But for the longer term, one killer app stands out. Quantum Dot is working on biological “bar codes”-polymer beads packed with a known combination of thousands or even millions of quantum dots. Each of these beads would have a known color signature-a spectral bar code. Instead of using a quantum dot to tag a biomolecule by binding to it, the scientists aim to build assays for genetic analysis on the surface of the beads. “Labs on a chip” are one of the hottest new approaches to genetic analysis, and Quantum Dot hopes its “lab on a bead” could be an easier way to recognize gene sequences. The researchers attach a particular sequence of DNA to the surface of each type of bead. Because you could readily form thousands, even millions, of beads each with a distinct DNA probe (and readily identify each probe using the bar code), the technique could provide a quick way to simultaneously identify a large number of gene sequences in, say, a blood sample, providing a valuable diagnostic and research tool.

When Cool is not Enough

Despite their early success in raising money, Quantum Dot’s founders are aware that the company is entering a do-or-die period. Without a blockbuster product in the immediate future, the company is in a vulnerable stage common to many startups. “Every opportunity has a time window. There are always competing technologies,” says co-founder Manian. “We may be successful in three years, but if someone has come up with an alternative in two years, the train will have already left the station.” Manian says the company has milestones. “Looking at the barriers you encounter, you make subjective calls: Will it be solved in a week or will it take two years? If it will take two years, you immediately need to look for alternatives or a safety net.” The coolness factor, he warns, “will wear off very quickly if you can’t support it with economic benefits. It has to result in real-world applications.”

This sense of urgency in developing uses for the nanoparticles has drawn some of the best and brightest young quantum-dot scientists to the company. In Quantum Dot’s optics lab, 30-year-old Stephen Empedocles is clearly in charge. This is the company’s showcase, where potential investors come to be awed. But Empedocles confidently stands by, inviting a visitor to take a look through the microscope at the single particles, not much larger than a few atoms, glowing brightly. It’s a glimpse of the nanoworld that’s sure to catch the fancy-and perhaps the checkbook-of an investor.

But the experimental apparatus criss-crossing the lab table like a maze betrays the fact that this is still cutting-edge science. Empedocles joined Quantum Dot immediately after graduating from MIT last spring with a doctorate in chemistry. Already a recognized expert in the development of analytical techniques to detect single quantum dots, Empedocles could have taken a job at a large research organization or had his pick of any number of academic positions. But he was drawn to the challenges and opportunities of taking the fundamental science of quantum dots and using the technology to make an impact on the real world.

“Even at MIT,” says Empedocles, “people couldn’t figure out why [he would join a risky, new company.] No one else I knew went to a startup.” The reason is that the entrepreneurial culture that has taken root in computer and biotech research remains embryonic in the physical sciences. Yet if Quantum Dot succeeds in its quest to marry nanotech and biotech, Empedocles may find that his colleagues at MIT gain a new understanding of his career leap.