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Amid Strong GeneSifter Sales, VizX Sees Room for Growth in Gene-Expression Market

Although microarray vendors have recently described the gene-expression market as flat at best, at least one software vendor still sees the sector as a ripe growth opportunity.
“We think gene expression is a very key technology and is still growing,” Thomas Ranken, CEO of microarray analysis firm VizX Labs, told BioInform this week. “According to what I see, it’s increasing in the double digits, in terms of users.”
The privately held firm does not disclose its revenue figures, but in a quarterly update distributed via e-mail this week, Ranken said that first-quarter 2007 sales for the company’s GeneSifter software more than doubled last year’s, and sales for full-year 2006 doubled those of 2005.
All of the growth VizX is witnessing is from gene expression, and the company has maintained GeneSifter’s focus on that area even as other microarray software vendors, like Agilent’s GeneSpring group, Stratagene, and Rosetta Biosoftware, have expanded their product offerings over the last year to address emerging applications like ChIP-on-chip, array comparative genomic hybridization, exon arrays, biomarker discovery, and even mass spectrometry analysis.
While noting that VizX is looking into additional application areas and does plan to develop new technologies in the future, Ranken stressed that the firm is comfortable with its current position in the market. “Our focus is gene-expression analysis, and our business strategy is to stay focused on doing that really, really well,” he said.
Illumina and Affymetrix officials believe that interest in gene expression has plateaued. As BioInform’s sister publication BioArray News reported in February, Affy CEO Stephen Fodor called the gene-expression market “relatively flat” in 2006, while Illumina CEO Jay Flatley said the sector “is not growing very significantly.” [BioArray News 02-13-07]
But Ranken noted that growth is in the eye of the beholder. Hardware manufacturers have lowered the prices for their gene-expression chips “considerably” over the last few years, he noted, “and as a result, it may well be that in some cases there is no growth in dollars, but there’s considerable growth in numbers.”
More users translates into a higher demand for analysis software, and VizX is seeing signs that that is the case. In addition to the increase in sales the company saw in the first quarter, Ranken noted that interest appears to be increasing among potential new customers for GeneSifter: trial accounts and webinar registrations for the software more than doubled compared to the year-ago quarter, he said, as did traffic on the company’s website.
Ranken noted that VizX customers tend to stick around. The renewal rate for GeneSifter is 85 percent, he said, noting that many subscribers, including the company’s largest customer, expanded the number of licenses to the software when they renewed in the first quarter.
VizX is one of the few survivors of a shakeout that took place in the microarray-analysis sector several years ago, when a flurry of small startups like Molecular Mining, X-Mine, Xpogen, AnVil, and others suddenly emerged on the market and then proceeded to close their doors one by one.
Now, VizX faces the prospect of one less competitor in the market, since Agilent Technologies, which markets the GeneSpring microarray-analysis product line that it gained in its acquisition of Silicon Genetics in 2004, plans to acquire Stratagene, which sells the ArrayAssist suite.  
The agreement is primarily centered around Stratagene’s consumables and molecular diagnostics portfolio, and neither Agilent nor Stratagene has discussed plans for the combined bioinformatics business following the acquisition [BioInform 04-13-07].  

“Our focus is gene expression analysis, and our business strategy is to stay focused on doing that really, really well.”

Nevertheless, Ranken said that the deal could turn out to be favorable for VizX. “It’s typical to see in situations like that that the acquiring company has other priorities, so the focus may change,” he said, noting that Agilent’s acquisition of Silicon Genetics ultimately turned out to benefit VizX for that very reason.
Ranken noted in his quarterly update that VizX is currently “considering a significant initiative to raise additional capital to invest in marketing” in order to raise the visibility of the company and “speed the development of new customers.”
The growth in sales in the first quarter occurred “with no increase in either headcount or expenses,” Ranken noted.
Ranken told BioInform that the company’s short-term priority is to attract new customers for GeneSifter, while longer-term goals include new product development. For now, he said, the goal is to “keep doing what we’re doing, but get a little better at it.”
VizX is in discussions with several potential investors, as well. Ranken said that the investment picture for bioinformatics firms appears to have improved over the last several years.
“Five years ago, the reaction that most people got who were trying to find money for bioinformatics applications was VCs saying, ‘We invested in a bioinformatics company three years ago and it tanked. I’d be laughed out of my office if I even suggested that.’”
Now, he said, “it’s a different breed, different generation, and I think people are impressed by business milestones as opposed to technology promises.”

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