Sometime in the next few weeks, Molecular Devices will reveal a new pricing structure for its recently acquired Transfluor fluorescent translocation assay in an attempt to make the technology more accessible to smaller biotech and drug-discovery companies, and to encourage CROs and third-party screeners to use it, a company official said last week.
Molecular Devices is not ready to reveal actual figures for the new pricing, although Jan Hughes, the company's vice president of worldwide marketing last week shared the pricing structure with CBA News off the record. The new structure, which is intended to be more inclusive for researchers interested in the technology for assay development and basic research, significantly decreases the cost of the license from the amount the company had originally indicated.
The news comes approximately half a year after Molecular Devices acquired the rights to Transfluor from Xsira Pharmaceuticals for $11 million (see CBA News, 3/15/2005), and two months after it revealed an initial "experimental" pricing structure of €250,000 ($458,000) for an annual site fee at the Marcus Evans High-Content Screening conference in London.
Some industry insiders had complained that Molecular Devices might be "skimming" with the pricing structure by going after only the top five or top 10 pharmas as potential Transfluor customers.
At the time, some industry insiders complained that Molecular Devices might be "skimming" with the pricing structure by going after only the top five or top 10 pharmas as potential Transfluor customers (see CBA News, 6/20/2005). Although Transfluor has become a heavily used technology for large-scale secondary and even primary drug screening for GPCR targets, it is still considered a valuable basic research tool for assay development, target ID, and target validation.
Jan Hughes, Molecular Devices' vice president of worldwide marketing, told CBA News last week that the company has taken this into account over the past two months, along with other early customer feedback, and as a result has modified the pricing structure to address two specific groups of customers: those conducting assay development and basic research, and those performing larger scale drug discovery.
"Both of these are 12-month renewable licenses," Hughes said. "The attempt with the assay development and research license is to [offer] an extremely low-cost license, so we can basically get this assay out there to customers who want to start looking at their receptors with Transfluor, but don't necessarily have a high-throughput screen, or any other drug-discovery activities scheduled until after they've proven that their assay works, and they've essentially developed their assay."
Although Hughes was not ready to reveal actual figures though Molecular Devices may do so next week at the Society for Biomolecular Screening conference in Geneva he indicated that these researchers will be able to purchase Transfluor "at a very low price relative to some of the other licenses that are out there." He added that this license would prohibit any form of drug discovery or screening using Transfluor, and can be sold as a single-use license or a broader site license for an entire company.
Regarding the drug-discovery license, Hughes said that "once they have decided that they want to promote that assay into a screen which may be anywhere between six months and a year we then have the drug-discovery license, which has flexible pricing as well based on the number of compounds that they want to screen."
The pricing for the drug-discovery license, as would be expected, is more expensive, though it still has pricing tiers depending on the number of targets screened and number of compounds screened against them. For instance, Hughes said, if a customer wanted to screen a particular target against up to 50,000 compounds, the drug-discovery license would be a certain amount, but for an unlimited number compounds, it would be significantly more.
"So this way, in drug discovery, customers can actually budget for it," Hughes said. "A lot of HTS groups will say 'I want to do two screens a year, and now I know what the number is, and it'll be 'X' amount of dollars, or if I'm doing fewer than 50,000 compounds, it's 'X' amount of dollars. It's much easier for them to budget."
Another consequence of the new pricing structure, Hughes said, is that Molecular Devices now believes that it can offer a Transfluor license to CROs and third-party screeners. The company originally had said that it wouldn't allow third-party screeners.
"This way, I think that we can broaden the adoption both to research facilities who don't necessarily have the money that we were originally quoting, as well as to … maybe the companies that are biotechs that don't really want to take the risk of buying even a research license, but would rather try to outsource some of the cell-line development and assay development," Hughes said.
Transfluor customers will still need to purchase additional research licenses in order to use the technology. As explained on the company's website, "Two additional third-party licenses are required to run the Transfluor assay: a green fluorescent protein license (MDC recommends the Prolume Renilla reniformis GFP license) and BioImage's fluorescence translocation license. You can obtain these licenses through MDC. Alternatively, you can also obtain these licenses directly from Prolume and BioImage."
Hughes explained that Molecular Devices does not mark up the BioImage or Prolume licenses that it sells, "so essentially we have lumped them all together, but we do keep them as separate line items, because we have to turn around and pay them."
Transfluor's value to Molecular Devices may extend out to its instrument platform sales, as well. Although Molecular Devices has maintained that it will not limit the use of Transfluor on competing high-content screening instrumentation, the company has optimized its newer imaging systems for use with Transfluor. Therefore, the company may have a new competitive edge in selling its instruments to customers conducting GPCR screening.
"Our new imaging platforms will compete on their own based on price and quality of the images, and the speed," Hughes said. "So we know we've benchmarked those against our competitors, and we feel that independent of Transfluor, the imaging systems especially ImageXpress Micro compete head on with the ArrayScan and IN Cell 1000.
"Because we do own the Transfluor licenses, we have verified and made sure that our imaging systems are really integrated to the assay itself everything from the quality of images through the analysis modules, and that gives us an advantage," he added. "Now, if a customer is looking at both Transfluor and an imaging system, do we believe that we can have competitive pricing? Absolutely. There will be pricing incentives as those customers approach us."
— Ben Butkus ([email protected])