While some larger microarray vendors have seen flat array revenues in recent quarters, Applied Microarrays, the firm that acquired the CodeLink bioarray platform and associated assets from GE Healthcare two years ago, continues to see growth, according to its top official.
CEO Alastair Malcolm told BioArray News last week that sales for 2009 so far have been about 50 percent higher than they were in 2008. The number of company employees also grew 30 percent this year, though Malcolm declined to provide sales numbers or a headcount for the privately held firm.
According to Malcolm, the majority of the company's sales come from contract manufacturing, while sales of legacy CodeLink bioarray products now account for less than a tenth of AMI's total revenues.
"We have kept CodeLink in the marketplace because customers continue to buy it, but it hasn't been a strategic focus for us. With our business model, the design is frozen [for the legacy products] and we are not planning to issue any extension to the CodeLink family," said Malcolm.
Tempe, Ariz.-based AMI acquired CodeLink from GE in May 2007, six months after GE decided to jettison the platform (see BAN 5/8/2007). As part of the purchase, AMI obtained CodeLink's staff and manufacturing capabilities, which it decided to use as the basis of a custom array and contract-manufacturing business (see BAN 5/13/2009).
Malcolm said last week that the contract-manufacturing side of AMI's business is "growing very healthily" on the basis of contract development and manufacturing partnerships. This year, AMI began producing lower-density protein and nucleic-acid arrays in 96-well and 384-well formats to be used in clinical trials in the pharmaceutical market.
"In these formats, you are looking at less than 2,000 capture probes per well to do a high-throughput screen," Malcolm said. "With our high-throughput printing capabilities, we are putting these tools to good use in a new market," he said. "There is an increasing trend that pharma companies and the new families of drug companies are outsourcing their research. In turn, the contract research companies are outsourcing array manufacturing."
One factor in AMI's growing custom array business is the current economic environment. Malcolm said that companies in the past had attempted to build internal array-manufacturing resources, but are now more inclined to outsource manufacturing due to capital limitations.
"We are finding that in 2009 there are more incentives [for big companies] to outsource as a means of cost saving, as well as for startups for the preservation of capital for IP development and marketing development," Malcolm said. "It's hard to raise money, and they would prefer to preserve their cash for core activities. In that sense, it has supported our business model."
At the moment, AMI is focusing on between 15 and 20 major customers, Malcolm said, both "large public corporations that are outsourcing because of our capabilities or cost-saving reasons" and "early-stage companies … that lack the funding to set up internal microarray facilities."
In addition to seeing protein-array projects and producing arrays in high-throughput formats, AMI has been producing a lab-on-a-chip for infectious disease testing and circulating tumor cell capture and other cell-capture arrays. "We've been making them for about 15 months, and we are seeing a lot of interest in tumor cell-capture arrays," said Malcolm. AMI has "specific capabilities to produce these products with low background and high specificity," but does not intend to take the products to market by itself; its partners will sell the arrays, he stressed.
To manage the new products, AMI has expanded this year. The company added personnel and expanded its manufacturing capabilities. "We put in more printing machines and implemented additional quality-control testing," Malcolm said of the expansion, which took place between May and August. He did not disclose how much the expansion cost, but said it added 30 percent more space to AMI's facilities.
One reason for the expansion is that the company offers more services. AMI now bundles reagents with its arrays, and provides the final formulation and final packaging for its customers' products. Malcolm discussed the firm's need for expansion with BioArray News earlier this year (see BAN 2/17/2009).