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PamGene Inks Deal With Merck Labs, Pledges to Build US Sales Force in '07

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Working through its Boston-based US partners, Dutch microarray company PamGene recently placed a PamStation 96 instrument with Merck Research Laboratories. Now the company is looking to build on this presence in the North American market by adding East and West Coast sales people to its staff sometime next year.
 
PamGene originally began to establish a US market presence as part of a “full commercial launch” for its products in the third quarter of 2005 by opening a showroom in Cambridge, Mass. But rather than hire its own sales people, the company outsourced US sales and support to SciPartners, a New England-based life science consultancy.
 
Through SciPartners, the company has been able to build a working relationship with Merck — a partnership that has, in turn, enticed PamGene to further invest in its US sales and support network.
 
Specifically, the Merck deal has emboldened PamGene to start building its own operations in the country. “Next year we will still take a cautious approach, pioneering on the West Coast and growing to a handful of sales staff on the East Coast,” Morven Brodie, a PamGene’s spokesperson, wrote BioArray News in an e-mail this week.
 
“It is not that easy to find the right persons that have the key personal attributes and network to address such a specialized market, [so] location will therefore be dependent on the location of the correct people.”
 
According to Brodie, the firm will now seek an external partner to build its West Coast profile while developing its own sales and support on the East Coast.
 
The planned US sales deployment comes more than a year after PamGene set up its Cambridge presence and waited for the “next step” in its strategy to unfold. In August 2005, PamGene CEO Tim Kievits told BioArray News that even as it began working with SciPartners, it was uncertain of how it would address the US market in the long run (see BAN 8/3/2005).
 
"We have been already active on the West Coast, and will continue to be active, but we have not decided on the timing of the next step,” Kievits said at the time.
Last week, Kievits told BioArray News that the company is now leaning “towards starting [its] own US sales force with individuals that know the market and have an entrepreneurial attitude.” 
 
“We feel that scouting and adapting to customers demands, thereby optimizing the product, is the most important first step to take. We will probably expand in 2007 from where we are now, planning to have the same structure on the US West Coast as well as our own sales organization on the East Coast,” Kievits wrote.
 
This week Brodie also provided an update on PamGene’s presence in China.
 
The company began its efforts in the Chinese market a year ago and now has PamStation units installed at the universities of Fudan and Shanghai Jiatong, she wrote. In total, three collaborations with Chinese researchers are underway.
 
The Merck Connection
 
According to SciPartners President John Lindsay, PamGene closed a deal with Merck last month to buy its PamStation 96, a $400,000 high-throughput, automated system that can run experiments on 96 separate PamChips at a time. Using the PamStation 96, Merck and PamGene have also developed a nucleic receptor assay that is available to all of PamGene’s customers and are at work on a second assay, Lindsay told BioArray News last week.
 
Moreover, Lindsay said that the deal represented “a breakthrough” for PamGene because “Merck can buy arrays from anybody.”
 
“This was a very thorough evaluation process. We developed the [nuclear receptor] assay generally from scratch and [Merck was] very pleased with the technology,” he said. According to Lindsay, PamGene hired his firm to make use of its contacts in the US to set up its initial business. Lindsay said that smaller, European firms like PamGene often have a difficult time gaining traction in the US market, which makes the Merck deal even more important.
 

“We had a lot of strikes against us. We’re European and we are a start-up, so we have to prove ourselves.”

“We had a lot of strikes against us. We’re European and we are a start-up, so we have to prove ourselves,” Lindsay said. At the same time, Lindsay said that firms like PamGene were competing in a tough market for high-end tools like the PamStation 96. “Funding in pharma R&D is nothing what it was five years ago,” he said. “The community looks very carefully at every new technology before they jump in.”
 
Nuclear Receptor PamChip Assay
 
Along with the key sale to Merck, the assays that are coming out of the collaboration have been a positive for PamGene, which has decided to approach the marketplace with niche assays for drug developers rather than the whole-genome formula of most array companies.
 
The first of these tools is the Nuclear Receptor PamChip assay, which the company claims is useful in the drug-development process. “In a nutshell, the assay helps with ... compound selection in drug discovery,” Brodie wrote.
 
“Our assay enables you to screen your compound against 48 co-regulators at one time, with just a few pmol receptors. The content is peptides, representing co-regulator proteins,” she wrote.
 
The assay enables “multiplex microarray-based compound analysis of nuclearreceptor co-activator/repressor interactions by use of flow-througharrays,” Brodie said, adding that it allows “compound selection, profiling and ranking based on potency and selectivity”
 
PamGene declined to provide information on other assays the firm is developing with Merck. Merck declined to comment on the collaboration.

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