The market for biobanking informatics systems is at a crossroads, with newcomers moving in to fill a void left by several early movers in the sector.
First Genetic Trust and Ardais, two firms that pioneered the development of data-management systems for biological samples and clinical information, ceased operations in late 2005 and are both in the process of transferring their remaining assets to other parties, BioInform has learned.
Meanwhile LIMS provider LabVantage has identified biobanking as a growth opportunity and has added a biospecimen module to its core Sapphire LIMS platform. A standalone version of the module, co-developed last year with Millennium Pharmaceuticals, was deployed earlier this year at the Multiple Myeloma Research Consortium Tissue Bank.
"We're finding that more and more of the universities, more and more of the non-profit research centers, are looking for biobanking/biospecimen management systems," Jim Aurelio, president of LabVantage, told BioInform. Aurelio said that LabVantage is targeting the system toward biotechs and pharmas, who would likely adopt the Sapphire BioBanking module as part of a broader LIMS implementation, as well as toward academic organizations that would probably opt for the standalone version.
"I think a lot of companies out there invested a fair amount of money in building this stuff and they didn't find many clients. … There just wasn't enough of a marketplace to make it sustainable at the time."
But it appears that this demand has come a bit too late for early movers in the field that focused solely on the biobanking market.
Ardais, founded in 1999 in Lexington, Mass., and FGT, founded in 2000 in Deerfield, Ill., both closed up shop last October, according to sources affiliated with the firms. The technology and some of the former staff of Ardais are in the process of being transferred to a new entity, GulfStream Bioinformatics, that will continue to commercialize the BIGR (Biomaterials and Information for Genomic Research) resource that Ardais launched in 2001.
GulfStream officials did not return requests for comment, but an employee who answered the phone confirmed that the company had acquired the assets of Ardais. Several GulfStream job postings on Boston's Craigslist and elsewhere describe the firm as addressing "the challenges of biospecimen and associated clinical data, collection, management, and distribution."
FGT, meanwhile, is in the "latter-most stages" of selling its assets, Daniel McCurdy, president and CEO of IP licensing firm ThinkFire and an FGT director, told BioInform.
"We have had a process underway to sell the assets of the company over the last three months or so, and there has been a potential buyer that has been identified," McCurdy said.
In the meantime, customers for the two firms have been seeking other options. The Multiple Myeloma Research Consortium, for example, entered into an agreement with First Genetic Trust in 2004, but was "left in the lurch" last year when the company folded, Steven Young, executive director of the MMRC, said.
Young said that MMRC researchers had to temporarily revert to a paper-based system before the tissue bank signed an agreement with LabVantage for its Sapphire BioBanking Solution, which was fully deployed in six weeks.
LabVantage's Aurelio said that the firm is seeing interest from other former FGT and Ardais customers. "What we're finding is that those customers that have begun deployment of the other systems … have not had successful implementations and they are coming to us because of the success that we've had with Millennium and the MMRC," he said.
Aurelio acknowledged that the playing field is not entirely open, and that there is likely to be a "resurgence" in the biobanking sector once the Ardais and FGT technologies are back on the market under new ownership. LabVantage's broader product portfolio ought to give it a competitive edge, however. "We see potential competition with the standalone biobanking solutions, but we believe that biobanking will be a very strong and integral part of a more robust solution, which is why we built it as a module to Sapphire," he said.
The biobanking data-management market is "at an early stage of the development cycle," Aurelio said, adding that it may still be "premature" for companies to focus solely in that area. "We had the beauty of being able to have the revenue of our core business, which allowed us to focus development on the biobanking module. So we were able to keep our core business intact and continue to reach into these new markets," he said. "Whereas some of these other firms the guys who focused solely on biobanking my belief is that they may have seen a market that wasn't there yet."
Others agreed with this observation. MMRC's Young said the consensus in the sector is that Ardais and FGT "were sort of ahead of their time. Everybody thought the genomics revolution would result in the necessity for not only access to the tissues, but [the] need to be able to do data mining of all this genomics data, et cetera, and the genomics revolution hasn't really happened it's more of a simmer. And I think a lot of companies out there invested a fair amount of money in building this stuff and they didn't find many clients. … There just wasn't enough of a marketplace to make it sustainable at the time."
Andreas Califano, an FGT founder who left the firm in 2003 for a position at Columbia University, told BioInform via e-mail that the market for biobanking informatics "is developing but it is not developed enough to allow a company to survive without a constant infusion of cash."
ThinkFire's McCurdy noted that FGT was "making good progress with clients, and it was doing work with a number of important clients." However, he said, "the fact is that the revenue being produced from those relationships was certainly not sufficient to continue the operations of the company, and effectively it just couldn't sustain itself any longer and the venture backers made a decision not to continue to fund the company."
FGT raised a total of $33.3 million in three rounds of VC funding between 2000 and 2003, while Ardais raised $50.4 million in three rounds between 2001 and 2004.
Bernadette Toner ([email protected])