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With Buy Not an Option in China s Economy, Chipscreen Goes for Build

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By China’s standards, Chipscreen Biosciences is a biotech success story. The two-year old drug discovery firm, based in Shenzhen, Guangdong, has raised over $6 million in funding, which is “quite unusual in China” according to Leming Shi, co-founder and director of informatics. But despite its relatively deep pockets, Chipscreen found that commercial informatics systems were still out of its price range.

So Shi took advantage of the low cost of labor in China, and set a team of developers to work on a fully integrated bio- and cheminformatics platform to support the company’s drug discovery research.

“If I were in the United States I certainly wouldn’t have done this,” Shi admitted, “but there is a big difference between China and the United States in terms of the economy and the cost of human power. Those differences led to the decision to develop our own software.”

The platform Chipscreen put together is akin to systems from Accelrys or Tripos, Shi said, but while the commercial versions would cost around $50,000, Shi noted that the annual salary for a skilled computational chemistry programmer in China runs only $15,000. In addition, he said, the broad range of publicly available software tools on the bioinformatics side helped flesh out the integrated system for very little additional cost.

Aside from the cost savings, Shi said that the homemade system provides a level of functionality that would not be possible with an off-the-shelf system. “When you have commercial software, you just get what they have. You don’t get what you need,” he said. Prior to founding Chipscreen, Shi worked in the US at BASF and American Cyanamid, where he had access to commercially available software systems, but found that “not enough of them do all the work I would like them to do.”

The complete biocheminformatics system, which took only around six months to put in place, integrates chemical structure information with biological activity data and gene expression profiling patterns. The tricky part of the integration process, Shi noted, was finding a way to store chemical structure information in Oracle so that it could be mapped to the biological data that is usually stored in a relational database.

“Chemical structures are very unique,” Shi said. “Most times you need to have specially designed commercial software to deal with chemical structure information because it’s not just a figure or an image.” After checking out systems from MDL, Accelrys, and Tripos that claimed to provide Oracle versions of their proprietary chemical structure database systems, Shi said he determined he could do it himself, “so I asked my people to get to work on it, and they were able to do it.” The company currently has more than one million compounds stored in its chemical structure database.

Once the chemical structure information problem was solved, Shi said it was relatively easy to add the bioinformatics components to the Oracle database platform.

A key component of the bioinformatics side of the platform is a microarray informatics system that comprises a MIAME-compliant gene expression database as well as a full suite of image analysis, data mining, and visualization tools.

As its name might suggest, Chipscreen relies heavily on microarray experiments. The company uses the technology for the toxicogenomics-based evaluation of small-molecule lead compounds — research activity that comprises about 60 percent of the company’s work, Shi said. The remainder of the company’s efforts are devoted to evaluating the chemical basis of traditional Chinese herbal medicines that have clinically proven efficacy in areas such as osteoporosis.

“Chinese medicine is still a huge portion of the pharmaceutical market in China,” Shi said, “so we are helping this country to understand why this traditional Chinese medicine is working, and what components in traditional Chinese medicine are working.”

According to Shi, the Chinese government strongly supports the commercialization and standardization of traditional herbal cures. “They are hoping that in the near future this traditional medicine will be able to go through the FDA approval process,” he said.

Additionally, Chipscreen has been awarded several government grants to support the development of its informatics platform and make it available to Chinese academia and industry “at an acceptable price tag,” Shi said.

But don’t look for Chipscreen to emerge as China’s first bioinformatics company. Despite strong demand for affordable informatics solutions from the country’s nascent biotech market, “I think so far it’s quite hard to find a viable business model for just working in the bioinformatics area,” Shi said.

— BT

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