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Stanley Rose on Becoming President and CEO of NimbleGen Systems

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Name: Stanley Rose, President, CEO, NimbleGen Systems

1978 — BA, psychology, Cornell University

1984 — PhD, biology, Massachusetts Institute of Technology

On a recent day, Stanley Rose, newly announced as the president and chief executive officer of Madison, Wisc.-based NimbleGen Systems, could see from his home on the island of St. John some 30 miles across the Caribbean Sea to the island of St. Croix.

Rose founded Genetic Microsystems of Woburn, Mass., a microarray instrument firm that in 2000 was bought by Affymetrix for $101.1 million in stock. About that time, Rose moved to St. John, the smallest of the US Virgin Islands, but continued to commute to Boston, where he maintains a home, and continued to work with Affymetrix, before moving on to assume the chairmanship of OpGen and working as a director of GenTel BioSurfaces, two other Madison, Wisc., biotech startups.

So, why in the world would this 47-year-old scientist and entrepreneur, who has also held executive positions with PerkinElmer and Applied Biosystems, want to trade island living for the hectic schedule of an executive who has to fundraise, market, and manage an early-stage company with a promising technology in the definitely-not-tropical North?

Rose told BioArray News that he is not giving up his tropical getaway, where soon he will have high-speed Internet access installed. He said he does expect to rack up frequent flier miles and stopovers in Atlanta and Chicago, as well as Boston, to lead NimbleGen.

How did a Cornell psych major end up in biotech?

When I started the [MIT] program, it was 1982, and I had finished my coursework and was working on my thesis. In the late 1970s and early 1980s, the biotech industry was just emerging. Every professor in the biology department [at MIT] was involved in a new biotech company and everybody saw it as a phenomenal source of funding for projects you couldn’t get financed through grants. At the same time, amongst most biologists, industry was a forbidden land that you didn’t want to go into. For some reason, that captured my imagination and I started taking courses at Sloan [MIT’s graduate school of business] to find out more what it was all about. One of the things that was stressed at Sloan was that if you were going to get involved in a technical venture, you had a big advantage if you actually understood the technology. There [were] 100 people in the room and I looked around and there was me and one other biologist doing case studies on biotechnology and nobody in the room had any idea of what this was all about. I thought this would be a nice opportunity to combine my interest in the science and the emerging industry.

How did you get involved in gene expression?

There were two companies in Boston that were doing pioneering work in DNA probe technology at the time — Collaborative Research and Integrative Genetics. I talked with both and wound up going to Collaborative Research as director of business development. It was an exciting time to be there. Not that the business was so successful, but the science that was going on at the time was really amazing. It was way ahead of its time. We were working on developing a map of the human genome before there was a Human Genome project. The scientific advisory board at the time was David Botstein, David Baltimore, Jerry Sink, and Ron Davis. In 1986-1987, Eric Lander showed up, and it was really a who’s-who. The big project we were working on was developing a map of the human genome with 300 markers. There was a Cell paper in October, 1987, the same week that the market crashed.

What have you learned from being in the biotech world for close to 20 years?

There are [business] cycles. You have to recognize that. There are macro things that you don’t have any control over — investor interest in biotech, which rises and falls, and peculiarities about the world of venture capital. All of that plays into the mix. Fundamentally, I just believe in the technology, and the promise of biotechnology and the things that we are ultimately going to do.

How did you learn of the job at NimbleGen?

I heard about the job through my other affiliations in Madison. The way I first got introduced to biotech in Madison was through David Schwartz and the incred-ible work he has done with optical mapping. In the course of our initial financing efforts, in the latter half of 2001, I met Bob Palay [chairman of NimbleGen]. At the time, I was still a part-time employee at Affymetrix. We had some informal conversations. I had heard about Nimblegen anyway because, being involved in the microarray world, everybody realized they had this incredible technology. When I ran into Bob again in late 2001, we started chatting and kept in touch ever since.

How do you expect to work in administering and managing the company?

If you did a survey of biotech CEOs to see how many are in their home office, as opposed to being somewhere else, you would find people traveling quite a bit. With NimbleGen, you have a multinational company with a main office in Madison, as well as production facility in Iceland, and a subsidiary outside of Munich. We are in the process of building a field sales organization, all of those will be located away from home office. The big issue with any company, and any job, is really clearly defining your goals, having a realistic plan to address them, and then having very effective means of communication to make it happen.

Describe NimbleGen as you see it.

To me, NimbleGen today is the leading source of custom-designed, high-density microarray analysis. The company has spent a number of years building that core technology and is now making the transition from a technology-oriented business to a market-oriented business and working to build up the necessary commercial capabilities to more broadly exploit the technology. Nobody else out there can make and use high density arrays of any design — within obvious limits — as quickly or as cost-effectively as NimbleGen and it is all due to the proprietary maskless technology that the company has developed. That’s our hook.

What do you think about the hype surrounding the whole-human-genome on a single array?

It’s very exciting. Undoubtedly, there are a number of companies that will make their version of whole-human-genome on a chip, that’s a good thing. Going forward, one of the advantages, even there, is that people’s idea about what constitutes the whole genome continues to change. There are new discoveries of either genes that haven’t been recognized before, or reclassifications of genetic elements, or the desire to not just have all the genes, but also regulatory elements on the array. All of those things are things that we can respond to very rapidly. We don’t have a static design. We have a flexible dynamic design capability. If ideas change three months from now, in a matter of a day or two, we will have it done. The companies that are gearing up, they are set in stone. We will be able to retool designs and have an ongoing benefit for those scientists to keep up with the pace of innovation. We are focusing our marketing and sales efforts in other opportunities. We think there is growth in the desire for more-targeted arrays so as [researchers] use the whole human array, they identify subsets of genes of interest. We will make the arrays of interest. There are over 1,000 genomes that are now totally sequenced or partially sequenced. There are on the order of 10 of those genomes that you can readily get on catalog arrays.

What do you think of the movement toward providing services?

There is no doubt a great increase in the utilization of services. Throughout biology, there is a matter of getting cost effectiveness in spending R&D dollars. Rather than build capabilites, rather than buying equipment and training people to run those, and becoming experts in analysis, why not work with a core lab, or an external reference lab or a core group, that can provide the answer? The key there is to convince people that you do quality work, that they can trust the data. In biology, there is an inherent desire to hold on to samples. Everybody likes to do things themselves if they can. You have to balance that against the costs involved in building on-site. I don’t mean to say that I think that there is going to be a decline in people purchasing systems on their own, I just think the market is expanding in a number of directions. The companies that rely on placing new systems will continue to grow at reasonable rates. The emergence of a more service-oriented market is above and beyond that.

What is the funding atmosphere?

In the VC community, over the last year, there was a very apparent, strong interest in molecular diagnostics. The major players in the genetic analysis world, very well established companies, are positioning themselves to exploit the emerging opportunity in molecular diagnostics. We are not at the point yet. We don’t have a plan to be a diagnostics player or have an internal diagnostics capacity. But, we have a very exciting opportunity in clinical research. And you will be seeing news, and collaborations and customers, which will be publishing data over the next couple of months in clinical research areas of high visibility on the NimbleGen platform. That is something that will continue. It’s an area we refer to as genomes of disease. We think that is the next big thing.

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