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One Year After Roche Acquisition, NimbleGen Forges Ahead with New Business Initiatives

One year after Roche acquired NimbleGen Systems — the same year that unfavorable market conditions drove Applied Biosystems, Nanogen, and GE Healthcare to abandon the array space — Roche NimbleGen continues to expand.
According to some longtime NimbleGen customers, the firm’s effort to find ways to pair its arrays with Roche/454 Life Sciences’ DNA second-generation DNA sequencers represents a particularly noticeable change that has occurred since the acquisition.
But the road to get there has been circuitous. Before Roche acquired NimbleGen last June for $272.5 million, the Madison, Wis.-based company was planning an initial public offering worth an estimated $75 million (see BAN 6/19/2007). Now, one year after the acquisition, Roche NimbleGen has focused on growing sales of its catalog arrays and services, developed methods to complement second-generation sequencing projects, and adjusted to life as a Roche business, according to the company and its clients.
The acquisition also came at a time when NimbleGen was looking to build its catalog array business, having for the most part relied on a services model in which experiments were performed at a subsidiary in Iceland, which would return the resulting data to the customer for analysis.
However, licensing deals with Oxford Gene Technology and Affymetrix in 2006 gave NimbleGen the opportunity to more broadly develop a catalog array business that it believes has been strengthened by Roche’s sales muscle (see BAN 6/19/2007, BAN 10/10/2006).
Roche NimbleGen spokesperson Joleen Rau told BioArray News this month that over the past year the firm has witnessed a “substantial” increase in sales of its catalog arrays in proportion to sales of its services, though she stressed that overall sales of array products have increased during the same period.
Rau attributed growth in demand for catalog array products both to NimbleGen’s introduction of new products and to the “broader use of the global Roche sales and distribution network, which is ideally suited to sell large-volume catalog molecular biology products.”
Prior to the acquisition, NimbleGen had a “small but very effective” direct sales organization in North America and Europe, on the order of a dozen individuals in each region, Rau said. The company also used a similarly modest network of distribution partners to sell its products and services.
“This is a very typical structure for a relatively small, growing company in the life science research products space,” Rau said. Now, as part of Roche, “we have access to a direct sales and support organization in every major country around the world — literally hundreds of seasoned professionals with strong technical sales experience and excellent local networks. 
The increase in coverage is an obvious benefit to us,” she added.

“I get the feeling that there are still more changes to come [at Roche NimbleGen], but to this point I have been happy.”

Unlike its main rivals Affymetrix, Illumina, and Agilent Technologies, NimbleGen Systems never built its own instrumentation to handle its arrays. Instead, the company opted for an open-platform model that relies on co-marketing deals with different tool providers to encourage customers to build their own systems.
According to Rau, the decision not to develop an internal instrumentation platform was based on a “combination of factors,” including time-to-market and a focus on the strengths and technical expertise of NimbleGen.
“There’s an advantage to getting to market as fast as possible, and in some cases we felt this was more important than to take the time to develop and manufacture with a group of scientists and/or engineers with expertise in a new area,” she said. “In these cases, partnering just makes more sense.”
This strategy has also helped NimbleGen grow catalog sales, said Rau. In April 2007, two months before the Roche buy, the company partnered with Salt Lake City-based BioMicro Systems to provide custom hybridization systems for use with its chips. This month, Roche NimbleGen announced an alliance with BioDiscovery to co-market and promote its high-density 2.1-million-probe HD2 arrays with BioDiscovery’s Nexus Copy Number analysis software (see BAN 4/3/2007, BAN 6/3/2008).
Sequencing and Personnel
Roche announced its plans to acquire NimbleGen a month after it closed its $154.9 million acquisition of 454 Life Sciences. According to Roche officials, the Swiss biotech giant considered both deals and their respective technologies to be complementary.
“One of the things that made NimbleGen so attractive is this enhancement that they’ve added to the 454 technology,” Lonnie Shoff, senior vice president of applied science and molecular diagnostics at Roche Diagnostics, told BioArray News in June 2007 (see BAN 6/26/2007).
“The combination of the two with [chromatin immunoprecipitation (ChIP)-on-chip] and sequencing was very attractive to us,” she said at the time. “And there are certainly some advantages to the arrays in the marketplace that we felt we could add to.”
Indeed, some customers say that one of NimbleGen’s most important contributions to Roche over the past year has been the debut of array-based methods that can be used with 454’s FLX instrument. In November, two studies were published in Nature Methods that detailed the new methods.
The first, called sequence capture, was developed by a team led by Richard Gibbs at Baylor and enables researchers to use NimbleGen’s arrays to select targets for high-throughput sequencing on the FLX instrument. The second, developed by Michael Zwick’s lab at Emory, is called microarray-based genomic sequencing and allows scientists to use NimbleGen arrays to extract and enrich specific large-sized DNA regions, then compare genetic variation among individuals using DNA resequencing methods on the FLX tool.
NimbleGen said at the time that both methods could reduce or eliminate the need for PCR in experimental workflows in favor of using the firm’s high-density, long-oligo arrays in more integrated projects involving next-generation sequencers, including those not made by 454 (see BAN 10/16/2007).
According to several NimbleGen customers, these types of efforts are among the more noticeable changes that have occurred since the acquisition.
Michael Snyder, director of the Yale University Center for Genomics and Proteomics, told BioArray News this week that “there have been some changes [at NimbleGen], but I do not think these are due to the buyout — rather they reflect the fact that high-throughput sequencing is rising and the array business is adjusting to this.”
Snyder praised this response to the market. “In general I like dealing with [NimbleGen] and feel the service is still very good,” he said.
“They are working to integrate NimbleGen and 454 [in terms of] sequence capture and sequencing,” said Emory’s Zwick, who added that one of the biggest changes that he has observed is the influx of people from Roche moving into some management positions at NimbleGen. “Otherwise, I still deal with the same sales people and have been able to receive arrays,” he said.
Jason Lieb, an associate professor in the department of biology at the University of North Carolina, Chapel Hill, also said that he had noticed personnel changes within the company following the acquisition.
“Some of the people that I worked with in the past have been re-assigned to new projects, but that is to be expected,” he told BioArray News this week. “The new folks that have taken their place have been very professional and collaborative.”
“I get the feeling that there are still more changes to come, but to this point I have been happy,” he added. “I hope [Roche] continues to allow NimbleGen to have some degree of autonomy.”

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