As part of what it describes as its "full" commercial launch, Dutch microarray vendor PamGene International has opened its first US office in Cambridge, Mass. The company plans to establish another US location on the West Coast as well as an office in China by early 2006, according to the firm's CEO.
"Right now we are fully launching; the product is ready," Tim Kievits, president and CEO of PamGene, told BioArray News. "The plan is to be active in the US East Coast [market], followed by the West Coast, and we also plan next year to enter the Chinese market," he said.
According to Kievits, the Cambridge office will serve as the headquarters and "show lab" for three of PamGene's representatives who will be based in North Carolina, New Jersey, and Massachusetts. The office will be located in the Cambridge Research Center, which Kievits described as an ideal locale "for companies stepping into the US."
"This company is changing from an R&D-focused company to a commercial company."
Kievits declined to comment on how large the West Coast and Chinese offices would be. He said that PamGene had just begun to penetrate the US and Chinese markets as a service provider and collaborator, and that "full system sales [are] a new activity for [PamGene] in these territories."
"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. The China launch is being prepared and will probably take off [in] early 2006," Kievits said.
Evolving Business Model
Kievits described PamGene's expanding footprint as a new chapter in the company's commercialization strategy. PamGene rolled out its two microarray platforms, the PamStation 4 and the PamStation 96, in 2004, but the company has so far focused on selling its products in the European market.
"The company is changing from an R&D company to a commercial company," Kievits told BioArray News last week. "[This] is made possible by careful cash management and redirecting R&D funds to [sales and marketing] activities," Kievits explained a later e-mail.
He said that €10 million ($12.2 US million) provided in late 2003 by PamGene's main investors GIMV (Belgium), Life Screen Partners (Netherlands), Alta Partners (San Francisco), and LCF Rothschild (Paris) would suffice in funding the operation (see BAN 7/16/2003).
"We can certainly cover the cost with the current business plan it is already covered in the plan," Kievits said, adding that it had been part of the company's strategy to set up shop in the US and China since the firm's inception in 2000.
Still, the CEO added that he wouldn't "exclude the option to go for additional funding if … it makes commercial sense to expand faster."
Kievits said that the PamStation 4 and PamStation 96 will be central to its US and Chinese offerings.
The PamStation 4 can squeeze 400 features including antibodies, proteins, oligos onto four arrays, while the PamStation 96 is a high-throughput, automated system that can run experiments on 96 separate arrays at a time.
Kievits told BioArray News that PamGene representatives will also be pushing several of the company's internally developed assays, such as one for kinase substrate profiling and kinase inhibitor screening, a second for SNP detection, which Kievits said "has been used for quite a lot of applications" among existing PamGene customers, and a third assay which he described as a "nuclear receptor testing biochemical assay."
The third assay "is very much targeting the pharmaceutical drug discovery and development side in the US," he said.
According to the CEO, the company will extend its network of partnerships in order to penetrate the US and Chinese markets a strategy that has served the company well in Europe and Japan.
Four years ago, PamGene began partnering with Japan's Olympus on possible diagnostic applications using its proprietary microarray technology, and the company has since built its reputation by partnering with European academic institutions, such as the UK's University of Nottingham, and participating in European Union initiatives, such as the EU's 6th Framework Program, which has paired PamGene with the University of Maastricht and others in order to develop a rapid molecular diagnostic for mitochondrial diseases.
Kievits said that PamGene is likely to work with US academics and take part in US-centered consortia in the long term to boost its profile in the Western Hemisphere.
"It is absolutely part of our business model to work with universities and others to show off our technology and the utility of our applications," Kievits said.
Kievits added that the Olympus partnership serves as proof that PamGene would be able to develop similar relationships with other large companies that could develop diagnostic applications on the PamGene platform and then market them themselves.
"For diagnostic applications we look to partner with companies with their own distribution networks," Kievits explained.
As an example, he cited how Olympus plans to serve as the sole distributor of a lung cancer diagnostic that it co-developed with Cangen to run on the PamGene platform (see BAN 6/1/2005).
Kievits said that PamGene would be able to sell directly to pharmaceutical and biotechnology companies itself, but said that it would most likely look for a distributor to handle sales of its consumables to academic partners due to its relatively small size. Kievits said that PamGene was most interested in finding a single, large distributor because it is "a mistake to spread distribution over too many channels."
Justin Petrone ([email protected])