Six months after acquiring the CodeLink bioarray platform from GE Healthcare, Applied Microarrays has now created a distribution network of life sciences supply companies that it believes will lead to more deals abroad as well as potential custom-array collaborations.
AMI CEO Alastair Malcolm told BioArray News this week that the company has signed 12 distribution agreements over the past month, giving the company a presence in 14 different countries in Europe, Latin America, Africa, and Asia. Applied Microarrays is handling its own sales and support in the US and Canada.
The growing distribution network is part of the company’s strategy to market custom arrays for so-called “lateral studies” that involve several types of biomolecules and would therefore benefit from an open platform like Codelink, Malcolm said.
Last month, AMI said that GRI will distribute its CodeLink bioarray products in the UK and France. Agreements are now in place with INBIO for Australia and New Zealand, Delta Scientific Services for Egypt, G. Kordopatis for Greece, Zotal for Israel, DBA Italia for Italy, Sciencewerke for Malaysia and Singapore, Accesorios Para Laboratorios for Mexico, and bioNova cientifica for Spain. In the past week, AMI has also concluded distribution pacts with Labvision in Sweden, Veritas in Japan, and Isogen for the Netherlands, Belgium, Luxembourg, and Portugal.
Malcolm said that the company is looking to complete its distribution network this quarter, and is seeking partners “primarily in Latin America” as well as “a couple of areas in the Scandinavian and Baltic countries where we are looking to focus our activities in the next month or so.”
With such wide geographic coverage, AMI is in some ways rapidly rebuilding the global marketing reach that GE had in place to support CodeLink. But Malcolm argued that AMI’s network of focused life sciences distributors could provide even better sales and support than the platform had when it was part of the GE portfolio.
“Within the GE world, there was clearly a huge product portfolio that the international sales force was supporting,” he said. “They had first-class specialists but they had a broad portfolio to cover. In our case we have selected distributors that are more focused on the microarray space so we feel that will rapidly develop the market for our products,” said Malcolm. “For the next several years we will go with distributors in international markets.”
CodeLink was originally developed by Motorola and then sold in 2003 to Amersham Biosciences, which was later acquired by GE Healthcare. GE announced its plans to jettison the CodeLink platform last December, deeming it ill suited for diagnostic applications. In April, Malcolm, a former vice president of life sciences operations at Motorola and a former VP of molecular diagnostics operations at GE, stepped in with several other investors to buy the platform from GE for an undisclosed sum. Applied Microarrays was formed to support the platform, and AMI retained many key personnel from the CodeLink team (see BAN 5/8/2007
, BAN 12/19/2006
Under Motorola and GE, the CodeLink team attempted to establish the platform in the market for whole-genome arrays for gene expression studies, eventually launching whole-genome chips for rat, mouse, and human, as well as theme arrays for inflammation and metabolic studies.
Since the April acquisition, however, AMI has sought to distance itself from the whole-genome expression array market and move towards more innovative, custom projects using CodeLink’s manufacturing capabilities to spot arrays for studies involving proteins, peptides, miRNAs, and other biomolecules of interest.
While Malcom said that AMI’s new distributors will initially support its catalog chips, the company’s new objective is to develop leads in foreign markets that will grow into more custom partnerships.
“We focused on selecting distributors on the basis that they are already in the array space with oligos, reagents, et cetera,” he said. “What we saw going forward is that there are a lot of customers that are extending their studies beyond nucleic acids into proteins, peptides, array [comparative genomic hybridization], and other fields.”
“We don’t think of ourselves as second-tier company, we see ourselves as a leading-tier company that can provide platforms across applications.”
According to Malcolm, these customers are looking for an open system that “enables multiple kinds of studies.” So, for example, AMI decided to partner with GRI and Sciencewerke because they both already support BioMicro System’s MAUI Hybridization System, an open system that Malcolm said works well with the CodeLink platform. “We looked for distributors that already have instruments that are available for different types of studies, rather than have a closed system like Affymetrix,” he said.
Indeed, the firm sees the potential for a bundling effect to take place, where customers conducting “lateral studies” across nucleic acids, proteins, and miRNAs will seek to outfit their labs with open, flexible array products. “It comes back to the idea that in a lot of regions there are a lot of interesting lateral studies going on,” said Malcolm. “These customers want to put together labs that are extremely flexible and have a lower cost of entry as opposed to some of the major systems that are out there that are closed and more expensive,” he said.
New Products and the ABI Fallout
When AMI bought CodeLink, it also acquired several legacy theme arrays that were in development. At the time, collaborations were in place to develop a women’s health chip that could identify common genes in breast cancer, cervical cancer, and other common cancers and diseases that afflict women in a 16-assay format, as well as a cardiac pathology chip.
In June, Randall Lockner, the firm’s vice president of business development, said the chips were “three to six months” from being released (see BAN 7/3/2007
This week, Malcolm said that of the arrays in the development, the cardiac pathology chip is the closest to commercialization. “I can say that in the cardiac studies space we would expect to announce something in the first quarter of next year,” he said.
AMI is relying on CodeLink customers to assist with the content on the arrays. He said that custom collaborations could also lead to future CodeLink theme arrays. “With a lot of the custom arrays, the content has been brought to us by our partners” said Malcolm. “So far we haven’t come across an application area that we can’t support.”
A separate opportunity facing the company is the demise of Applied Biosystems’ Expression Analysis System. As ABI announced last month, sales of the system have been discontinued immediately, and chips will be discontinued at the end of 2008, with service and support terminated sometime in 2009 (see BAN 10/30/2007
Like ABI, GE also has played in the market for gene expression chips but found the competition from other firms like Affymetrix, Agilent, NimbleGen, and Illumina to be too much of an obstacle for creating any sizeable market share.
Malcolm said that ABI’s decision to exit the market could lead to further adoption of AMI’s expression chips. However, he said that like ABI, AMI is not seeking to be a “second-tier” player in the market for gene expression arrays, but rather will focus on its flexibility in order to serve a broader base of array users.
“ABI were single focused and they didn’t get into the top tier” of the gene expression array market, he said. “We are not positioning our company going forward in the same mode. Like everyone else we would hope that ABI users would consider adopting the CodeLink platform,” said Malcolm.
“We don’t think of ourselves as second-tier company; we see ourselves as a leading-tier company that can provide a platform across applications,” he said.
Malcolm added that AMI could partner with larger array companies for custom work. “We see ourselves as being a partner to the major companies like Affy, Illumina, and Agilent … on projects that they just can’t do by themselves,” such as protein arrays, he said.