Genome Explorations, the Memphis, Tenn.-based microarray services startup founded by former St. Jude Children’s Research Hospital researcher Divyan Patel, this week announced a collaboration with ExpressOn BioSystems of Roslin, Scotland, to offer design services for antisense, siRNA, and ribozymes for use in gene knockdown and target validation studies.
The collaboration follows the company’s October 2003 linking up with Southern Research Institute of Birmingham, Ala., to pursue joint development programs in pharmaceutical target identification using gene expression profiling, and for cross-marketing of services.
Genome Explorations was an early competitor in a now seemingly burgeoning commercial microarray services sector. Its deals provide an insight into the maturing of the microarray market, where the concept of an isolated, centralized provider of microarray analysis services faces questions about its viability in an academic setting (see BAN 3/10/2004).
For Patel, who in 2002 teamed with partner Arno Justman to buy an Affymetrix GeneChip instrument system and began offering microarray-based services, business is growing. The company grossed $1 million in revenue in its first year, and in its second year doubled that, Patel told BioArray News.
The company is collaborating with ExpressOn BioSystems on siRNA design services, offering customers another method for validating information derived from its microarray analysis. The idea for the collaboration emerged after the executives of the two companies met at the Chips to Hits conference last year, said Patel.
ExpressOn has developed a microarray-based methodology to target regions of RNA accessible for interaction. The company has created an assay, Accessarray, using a microarray spotted with 4,096 oligonucleotide combinations. Hybridization results are analyzed using the company’s software, in order to construct a single-base resolution structure map of the target RNA, and to identify regions of accessibility. Then design criteria are applied to predict a maximum of five antisense, siRNA, or ribozyme designs that will demonstrate in vitro efficacy.
The final step of the process is comparing the gene expression profiles within cells pre- and post-treatment with the designed reagents to measure the selectivity of the designed reagent for knocking down the target gene.
“We identify genes that are being differentially regulated. [Researchers] will then try to validate that with Realtime PCR, or Northern blotting,” Patel said. “This siRNA model shows what happens in vivo.
“In essence, people are going down the road with siRNA; it would be nice to get them a kick start with this,” Patel said.
Academic Outsourcing Trend
Patel, who established the Affymetrix core lab at St. Jude Children’s Hospital in 2000, said his clientele, academic researchers, are realizing that they will have to use methods such as siRNA to stay current in their fields.
“The trend is towards more and more outsourcing,” said Patel. “When we started at St. Jude, there were 200 to 300 [Affymetrix] units in the country, and now there are [a thousand]. But it hasn’t affected the business that much.”
Patel estimates the company has processed some 2,400 samples in its 2,800-square foot laboratory since it opened and now lists 156 customers, despite shifting away from offering GeneChips with its service to its customers, to now going to a bring-your-own GeneChip business model.
“We stopped charging people for arrays, and now we just allow them to purchase the arrays and send them to us,” he said. The change was designed to save the costs of maintaining an inventory of chips that can go out of date, or become outmoded by newer products. Half of the company’s first-year revenue was from the sale of GeneChips.
The cost-saving move was counterbalanced by the scanner upgrade the company needed to purchase in order to analyze Affymetrix’s newer chips, such as the Human Genome U133 Plus 2.0 Array, the company’s flagship whole-human genome product. This array is now Gene Explorations’ top analysis services product, along with the Affymetrix mouse genome product.
The company paid $100,000 for this scanner upgrade a year after buying its first scanner. Affymetrix representatives decommissioned the lab’s old scanner, leaving the hulk of the machine in Memphis for Patel to dispose of.
“We would have liked to keep it for a backup,” he said.
Meanwhile, other microarray vendors have knocked on the lab’s door, looking to sell a second platform into the seven-employee company. ”They don’t come up to Affymetrix’s standards,” Patel said.
He is not running to develop any secondary offerings in proteomics just yet either.”One of our scientific advisory board is involved in proteomics and as soon as It becomes mainstream, we will do it,” Patel said. “We are a small privately-owned company; we don’t have the budget to buy R&D material or mass specs at $800,000.”
But, the company is entertaining thoughts about expanding. Patel said Gene Explorations has received feelers from several academic institutions about the company taking over their core facilities.
“We are happy in Memphis,” purely because of the FedEx hub here,” said Patel. “When Dublin ships us samples, they are here in the morning. And, because we are based on the university campus, our local customers can just walk right over to us.”
Growth has kicked Patel out of the wet lab, “which I hate,” he said, but not fully into administration, “which is good.”.
He spends his time more as a customer liason, advising on data analysis or experimental design.
“I like the research,” he said. “The company is not here to make money, but to help people in the arena. We have some clients who have already run arrays. We analyze the data and run it back for them and don’t charge for that.”