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With Edico Investment, Dell VC Arm Bets That WGS Is Ready to Take Off


CHICAGO (GenomeWeb) – Two weeks ago, sequencing informatics technology developer Edico Genome announced that it had closed on a $22 million Series B funding round led by new investor Dell Technologies Capital, the previously unknown investment arm of computer giant Dell Technologies.

It was the first investment Dell Technologies Capital, formerly known as EMC Ventures, had made in the genomics arena, and was a highlight of the venture capital operation's big coming-out party: On May 8, it emerged from stealth with a bang, announcing that it had invested in more than 70 startups and was offering up venture capital at the rate of $100 million annually since its unspecified start date.

Gregg Adkin, vice president and managing director of Hopkinton, Massachusetts-based Dell Technologies Capital, has been running the operation since 2012, according to his LinkedIn page, so the ex-EMC unit is at least five years old. Dell merged with EMC in September 2016, taking over EMC Ventures in the process.

San Diego-based Edico was one of two companies Dell Technology Capital highlighted at the unveiling, which took place at the annual Dell EMC World user conference in Las Vegas.

Edico indicated that it would take the new money to continue development and marketing of Dragen, the company's field-programmable gate array bioinformatics processor. Edico is building out both its product and marketing teams, and CEO Pieter van Rooyen said that his company expects to hire 10 to 15 additional engineers in the near future, plus an unspecified number of new sales and marketing people.

Dell's backing, van Rooyen noted in a statement earlier this month, will help enable Dragen to "radically change healthcare by unlocking data to reveal new insight into diseases, speed critical diagnoses, and guide precision medicine."

The deal apparently had been in the works for some time.

"It sort of grew synergistically," van Rooyen said in a recent interview. Edico had for several years been working with the Dell Services consulting division — which Dell sold to Japan's NTT Data in November.

According to Adkin, sales and support people at the former Dell subsidiary Dell EMC also noticed a significant overlap in the customer bases of the former EMC's healthcare operations and of Edico. "Our customers were starting to engage with Edico Genome," Adkin said.

"We engaged with them to understand their solution," Adkin continued. That led to a partnership, announced in January, by which Dell EMC and Edico would integrate the Dragen processor into a 1U Dell 4130 server for genome analysis, as well as into Dell EMC's Isilon scale-out networked attached storage for genomic data storage.

"The vertical they're going after [healthcare informatics] is a big one for us," Adkin said, noting that Isilon has become popular in the healthcare industry.

"They get power and storage all in one," said Adkin. That combination will help Edico compete with the likes of Intel, which spent $16.7 billion in late 2015 to acquire FPGA maker Altera.

"We enabled end-to-end genomic processing with our partnership," Edico's van Rooyen said.

The Dell partnership and investment, as well as Edico's recent deal with UK startup Congenica, have Adkin confident that whole-genome sequencing is about to break into the mainstream. "We think [WGS] will grow faster than it's been growing," he said.

For example, Adkin said it was only a matter of time until hospitals routinely offer WGS on newborns, perhaps three to five years."It becomes our reality when it's that quick and that easy," Adkin said. "There are a lot of different use cases when you can do [WGS] that quickly."

That prospect seems murky at the moment. Robert Green, co-director of the BabySeq Project at Brigham and Women's Hospital and Boston Children's Hospital, told author Bonnie Rochman in a new book — excerpted in Scientific American in March — that newborn WGS would be "given away as a freebie" as part of hospital childbirth packages by 2022.

However, Green himself presented data at the 2016 American Society of Human Genetics annual meeting suggesting fewer than 7 percent of couples approached for BabySeq consented to having their healthy newborns or newborns in the neonatal intensive care unit considered for sequencing. He and the BabySeq team have seen mixed levels of enthusiasm for newborn WGS in the last several years.

At Cambridge Healthtech Institute's Molecular Medicine Tri-Conference in San Francisco in February, researchers from the four Newborn Sequencing in Genomic Medicine and Public Health (NSIGHT) study sites discussed both the promise and challenges of sequencing the genomes of newborns.