NEW YORK – Newly formed precision medicine technology firm Velsera, incorporated through a merger of Pierian, Seven Bridges Genomics, and UgenTec, is not yet done with M&A activity to fuel its short-term growth.
"We think before the end of the year, we may get another five or six acquisitions" to fill in missing pieces, said CEO Gavin Nichols.
In January, Stockholm-based investment fund Summa Equity announced that it had acquired and merged the three privately owned entities into a new company called Velsera. Summa had been an investor in bioinformatics company Seven Bridges, but not the other two legacy firms.
"The whole premise of Velsera is about extensibility and scalability," Nichols said. "So the three companies that we've started with are not where we're going to end."
Velsera said at the time of the merger that the new company expects to meet United Nations Sustainable Development Goals by reducing the cost of development of new diagnostics, therapies, and drugs, as well as increasing access for underserved populations.
Nichols called Velsera a "framework" for adding more pieces to fill in gaps. The company, which is strong in somatic tumor genomics, has ambitions to move into germline omics and into central nervous system disorders. It also wants to beef up its deep learning capabilities and start offering polygenic risk scores.
Velsera would like to offer more virtual genomic interpretation services, as well. "We think that omics alignment is too tightly coupled to physical devices in physical locations," Nichols said.
Boston-based Velsera is the first company backed by Summa's third and newest venture capital fund, worth a total of about €2.3 billion ($2.5 billion). Velsera did not specify how much of that money it received.
Velsera actually started in June 2022 and operated in stealth mode for the rest of the year.
Summa, an earlier investor in Seven Bridges, fully acquired that company in the second quarter of last year. The private equity firm subsequently bought UgenTec and Pierian, formed Velsera, and hired Nichols, who had most recently been CEO of global medical imaging firm Calyx. None of the transactions were announced until the 2023 JP Morgan Healthcare Conference in January.
Velsera has about 850 employees now.
By the time of the unveiling, the new company had been able to establish its executive team, create an operating model, develop a go-to-market strategy and a combined product pipeline, and start integrating the three predecessor firms' technologies.
Nichols, who is still based in Calyx's hometown of Cary, North Carolina, said that a year ago, he was "getting frustrated with the way that private equity was looking at different companies post-COVID." In his opinion, PE firms were undervaluing oncology-oriented companies because the oncology research pipeline slowed down during the pandemic as researchers shifted resources to COVID-19.
He said that Summa had already reached the same conclusion.
Pierian already has a partnership with Illumina to provide variant interpretation and reporting, based on its Clinical Genomics Workspace (CGW) platform and Clinical Genomics Knowledgebase, for the sequencing giant's TruSight Tumor 170 and TruSight Oncology 500 research assays.
Nichols said that Velsera will soon be seeking US Food and Drug Administration clearance to market its TruSight Oncology 500 interpretation services as a software-as-a-medical-device. This will allow the firm to open up access to somatic testing to people in remote and low-resource regions of the world.
"You can do a sequence, take a VCF file, upload it to the cloud, and we will do the interpretation," Nichols explained. "Anywhere in the world, if you've got a lab tech and you've got a sequencing device, we can make an impact."
Geographically, Velsera now has customers in Europe and North America, but is looking to expand into Asia, particularly Japan and the Middle East, by 2024 or 2025. Nichols said to expect news about partnerships in at least two Middle Eastern countries in the next couple of months as the firm looks to diversify datasets and remove "ethnic bias" in reference genomes.
Seven Bridges already has the technology to examine multiple ancestry profiles in somatic tumors.
While there is some overlap, the three legacy companies generally bring complementary strengths to Velsera.
St. Louis-based Pierian is a clinical genomics technology and services provider, while Boston-based Seven Bridges offers a scalable multi-cloud analytic platform, petabytes of connected biomedical data, and on-demand professional services. UgenTec, a Belgian firm with US offices, is a provider of artificial intelligence-powered software for laboratory workflow automation and testing result interpretation, including PCR data analysis.
UgenTec focuses on automation of wet-lab workflow, including sample handling and instrument integration to support lab quality management programs. That company does a little bit more analysis with PCR than with NGS. Seven Bridges is more focused on large-scale NGS secondary analysis and to design, validate, and execute pipelines, while Pierian performs tertiary analysis to find which biomarkers are clinically relevant, helping customers build validated clinical pipelines.
Of the three predecessor companies, UgenTec is best in process workflow. Seven Bridges excels in data workflows, while Pierian's strength is in knowledgebases, according to Nichols.
Velsera has no plans to phase out any current technologies, even if there is overlap between the three legacy companies. "Any existing customer will continue to benefit" from Seven Bridges, Pierian, and UgenTec products, Nichols said.
Rakesh Nagarajan, founder, president, and chief technology and vision officer for Pierian and now a founder and chief medical officer of Velsera, said that the idea behind the tripartite merger was "to bring together technology-enabled solutions that transcend the typical silos that exist in clinical workflows and in research workflows" as the research and clinical worlds converge. "The vision and mission when the three companies came together were to radically transform human health by impacting clinical [practice] and research," he said.
The mission is built on three "pillars of execution," according to Nagarajan: driving "precision" R&D, making omics more accessible for both clinical and research purposes, and bringing advanced analytics to the point of care.
He expects that the new company will support several market segments, including cancer centers, academic medical centers, and clinical and translational research organizations, pharmaceutical companies, laboratories, and in vitro diagnostic firms, including those developing companion diagnostics.
Velsera is creating what Nagarajan called a "value loop," in which the firm provides two-way data flow between bench and bedside. It also joins a long line of companies claiming to "democratize" omics data.
Nagarajan called the democratizing of omics in general one of the three pillars of the new company, starting with clinical NGS. The company plans on branching out to other omics "as they become relevant clinically," he said.
For Pierian, democratization of clinical NGS means lowering the barriers to entry by integrating workflows with laboratory information systems, electronic health records, and other IT platforms.
It also means reducing the large amounts of data that each sequence generates to a usable list of clinically relevant variants or other biomarkers. "And even if I've got dozens of variants that pass analytical validation … how do I look at the constellation of biomarkers and generate a report? I need help with tertiary analysis," Nagarajan said.
Nagarajan said that validation services were a market reaction to demand. The company's first customer, Moffitt Cancer Center, asked Pierian to validate two assays back in 2014, and the firm was able to do that and complete a LIS/EHR integration in about five months.
Legacy brand and product names will remain for now because they have market recognition. Nagarajan noted that the Clinical Genomics Workspace name predates Pierian's 2014 spinout from Washington University, and that WashU still holds the CGW trademark.
However, Velsera will be putting its own name on future integrated products.
Last month, Arima Genomics and Pierian inked a comarketing and licensing agreement under which Velsera will integrate Arima Genomics' targeted next-generation sequencing testing pipelines into the cloud-based Pierian Clinical Genomics Workspace.
The Pierian platform offers clinical labs streamlined technology for accurate NGS data analysis, interpretation, and reporting. The combined offering with Arima will allow labs to implement sample-to-answer Arima gene fusion testing, helping them identify gene fusions and other structural variants.
The announcement specifically mentioned both the Velsera and Pierian brand names. Nichols said that the firm is slowly migrating to the Velsera name. "There's a couple of trade shows that we've already committed to as individual companies," he said. "But going forward, it will be underneath the Velsera banner."