KEY POINTS
  • Amazon held $15 million in shares of Nautilus Biotechnology at the end of the second quarter.
  • Nautilus is working to quantify a high percentage of the human proteome, which is a constantly changing set of proteins.
  • Amazon declined to comment on whether it works with Nautilus, but Amazon's other two investments in public companies in the second quarter were in companies it does business with.

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Andy Jassy, CEO of Amazon and then CEO of Amazon Web Services, listens during the Amazon Web Services Summit in San Francisco on April 19, 2017.

Amazon invested millions in a pre-revenue biotechnology company that went public after merging with a special-purpose acquisition company in early June, according to a regulatory filing released last week.

The move fits with Amazon's efforts to build a presence in health care. The online retailer now operates an online pharmacy following the $753 million acquisition of start-up PillPack in 2018, and in June an Amazon executive said other companies are interested in using the Amazon Care telehealth service.

Amazon disclosed that it held a $14.7 million stake in Nautilus Biotechnology on June 30. Following the publication of this story on Thursday, shares were halted and rose as much as 50% after they resumed trading, and shares closed up 10% for the day.

Nautilus has built a prototype for a device that can measure the human proteome, a set of proteins in the body that, unlike the genome, is constantly changing based on food consumption and other factors.

Companies such as Thermo Fisher Scientific produce mass spectrometers, but those devices can be expensive and and only yield a small percentage of proteins from a drop of blood, Sujal Patel, co-founder and CEO of Nautilus, said in an interview. The company wants to become capable of measuring more than 95% of the proteome.

Organizations could use the system for drug discovery, as well as clinical diagnostics and precision medicine. In 2020 Roche-owned Genentech agreed to use Nautilus' system, and the companies plan to publish their research findings. Nautilus expects its first revenue in 2022 and is targeting a long-term operating margin of 25% to 30%. Patel, formerly co-founder CEO of data-storage hardware company Isilon, which EMC acquired in 2010 for $2.3 billion, said Nautilus will sell its instruments along and provide cloud-based software.

Nautilus Biotechnology's founders, Parag Mallick and Sujal Patel.

Studying the proteome could help researchers find treatments for people who end up with severe lung damage after contracting Covid-19, and it could have helped demonstrate the safety of coronavirus vaccines during the approval process, said Parag Mallick, Nautilus' co-founder and chief scientist.

Amazon Founder Jeff Bezos' venture-capital firm Bezos Expeditions invested in Nautilus, in addition to Amazon.

"I don't have further comments in terms of their motivations in the future," Patel said, although he added that that might change. Amazon declined to comment on whether it has a relationship with Nautilus beyond the investment.

Amazon's two other holdings in public companies at the end of the second quarter were both with companies it does business with. Amazon held $32 million in shares of egg distributor Vital Farms, which called Amazon subsidiary Whole Foods Market "a significant customer," and Amazon had $335 million in shares of Air Transport Services Group, which handles part of Amazon's aviation logistics.

Nautilus is based in Seattle, and it had about 70 employees when it went combined with Arya Sciences Acquisition Corp III in June, Patel said.

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