Could the Research Triangle area of North Carolina become the North American center for microarray processing?
Last week’s announcement by Paradigm Genetics might suggest that possibility. Paradigm, a 194-employee biotechnology company established in 1997, announced the introduction of a suite of microarray services based on Agilent’s microarray platform. The two companies also announced a co-marketing agreement where Paradigm will be a preferred provider of microarray services for Agilent customers.
Paradigm joins Expression Analysis, a Durham, NC, company that specializes in providing services based on Affymetrix GeneChip microarrays.
The two companies will sell their products in an area with three major research universities — NC State, North Carolina, and Duke, all with robust microarray laboratories — as well as several big pharma companies and biotechnology firms.
The Paradigm service offering piggybacks on a system the company has created to service a $23.8 million five-year contract with the National Institutes of Health awarded in October. Paradigm will use Agilent’s 60-mer oligonucleotide-based microarrays, reagent chemistries, informatics, and instrumentation to produce data that will be collected in a public database managed by the National Institute of Environmental Health Sciences’ National Center for Toxicogenomics.
Paradigm sees a hungry market for microarray services, and, no doubt, immediate revenues.
“There is a need out there, and no clear market leader for providing that kind of work,” John Hamer, Paradigm’s chief science officer, told BioArray News.
Paradigm’s standard services package includes: RNA isolation and quality control analysis, RNA labeling, hybridization, scanning, image analysis, and statistical analysis. Custom services include experimental design, microarray design and production, advanced statistical analysis, data visualization, and data interpretation.
The company offers catalog arrays for human, mouse, yeast, and Arabidopsis. It will also offer human, mouse, and rat content as cDNA arrays.
Paradigm is looking to sell its services to a greater market, one not defined by regional geography.
“Our market is clearly going to be a combination of smaller companies that have a need at a particular point in time for microarrays but don’t want to buy the machines,” said Hamer. Just in the biotech industry, Hamer said he counts 350 companies who might be in the market for microarray analysis services. Additionally, there is the agricultural sector, a market the company already serves with multi-year contracts with Bayer and Monsanto.
Hamer also said that pharmaceutical companies who already maintain microarray facilities may want to outsource some work in toxicology.
“It opens a broad customer base,” Hamer said.
For catalog arrays, Paradigm aims to turn work around in two to three weeks, while custom products will take longer.
Company representatives did not provide pricing information for the service.
“[Pricing] will be competitive,” Hamer said. “It’s not just, ‘Send us RNA and we will send you a data file.’ We have designed this service around a market need to design the right experiment and get the right kinds of interpretation.”
The company will work up price quotes, depending on the complexity of proposed projects, within two business days, said Jeff Schuster, Paradigm’s director of business development for microarrays. Pricing decisions will be made by a company committee composed of the business development and finance departments.
Customers will know they are satisfied if they get the answers to their biological questions, and a high quality of data, said Schuster.
The microarray analysis will be conducted in the company’s 155,000-square-foot, three-year-old research lab facility.
Mining New Revenues
Paradigm is a company in transition. It underwent a restructuring in April, redesigned its business plan in October, and now is awaits a delisting decision by Nasdaq.
This new services business will generate short-term revenues, said Heinrich Gugger, who joined the company in July, leaving his position as president of the North American crop-protection business for Syngenta.
“It’s a natural, and it’s a way to go to existing and new customers with a larger offering,” Gugger said. “It fits the strategic directions we wanted to take the company to.”
Paradigm is not creating a new line of business to mirror the classic contract research organization, he said. “We want to be a high-end scientific collaborator tailored to the customers’ needs.”
The company is ready to being work on the NIEHS contract, subject to funding release by Congress, and the flow of data from members of the consortium of institutions. Paradigm will conduct microarray analyses, and use the data to create a database that can be used to assess environmental risks.
For Agilent, Paradigm is the ideal customer, said John Jaskowiak, Agilent’s marketing manager for bio-research solutions.
The arrays it sells to Paradigm for the services business might be incremental to Agilent’s overall business, but Jaskowiak said Paradigm is positioned for a future where researchers will want to outsource microarray analysis.
“As you put standards in place, the natural inclination is that larger companies will consider outsourcing the work. Clinical organizations, pharma and farma, won’t want to handle [microarray analysis] directly,” he said.