Although their relationship has simmered for over a year, Geospiza and Pharmaceutical Services Corp. are ready to take it to the next level. PSC — a provider of regulatory validation services — is going to resell Geospiza’s Finch suite in the genetic testing market.
Announcing the arrangement on April 24, Seattle-based Geospiza — a developer of software for managing sequence data for both research and clinical applications — said that it had licensed its Finch LIMS suite to PSC of Austin, Texas, for an undisclosed sum.
PSC will resell the software as part of its current validation services offering. The arrangement will also include servicing, software upgrades, training, and installation by Geospiza.
The software will then be used by both companies’ legacy customers as well as those born as a result of the alliance. These prospective clients include manufacturers of personalized therapies, biotherapeutics, and vaccines based on genetic markers.
“We already have current clients [together with PSC] so this is more of an expansion of the companies’ existing relationship,” Kevin Banks, vice president of business development at Geospiza, told Bioinform. “We didn’t just sign the alliance with some ideas in mind.”
Rob Arnold, president of Geospiza, said that the company has three active clients who are anxious to apply the software in a regulated environment. He added that these clients currently spend an estimated 70 percent of their time on manual data analysis, which Finch is expected to alleviate.
“This is an established market, and PSC [like us] has also been around for a number of years. For us, this is a planned move into commercial applications from research roots. For them it’s a way to reach and embrace new technologies.”
All of this makes good on a plan Geospiza announced in December when the company said it was going to delve farther into the genetic testing market. Having raised $3 million in VC financing, Arnold said the company planned to move beyond its roots in the research market and into a number of areas — but most particularly personalized medicine [Bioinform 12-08-06].
“The big change this year is that we’re going to be really going out and changing the positioning of the company,” Arnold said at the time. Indeed, that could be a palpable result of the alignment with PSC, which will use Finch to address the automation needs of its genetic testing customers.
Arnold said that Geospiza’s software business is expected to grow as a result of the alliance. The company sees a substantial growth opportunity for genetic data management systems in clinical labs, where requests for genetic-based tests are on the rise, but many labs are not equipped to organize and manage large volumes of genetic information.
Arnold likened demand for the company’s software to technology solutions of another era.
“The way genetic testing is being done today is full of manual steps, the way telephone operators of the past did things,” Arnold said. “It became more efficient [to embrace] technology, resulting in fewer dropped calls. [Similarly], we can reduce error, improve quality, and provide overall traceability.”
Patricia Rossman, vice president of clinical operations for PSC, agreed that many of the company’s customers are demanding systems like Finch. “The software is allowing technology to be scaled,” she said. “You can have technology in an R&D situation and have [only] so much data that can be dealt with with smaller computational aids. Once you get into vaccine manufacturing and you try to scale up you will run into problems, and that’s where Finch comes in.”
Rossman touted the alliance as meeting both parties’ needs. “We do a lot of laboratory system validations and environmental control validations — any kind of computer validation [required by] the FDA [and/or other] regulatory commission,” she said.
“This is an established market, and PSC [like us] has also been around for a number of years. For us this is a planned move into commercial applications from research roots. For them it’s a way to reach and embrace new technologies.”
“Geospiza didn’t have the expertise that was required to get FDA approval so they contracted with us to develop a validation guide for them to use with their regulated customers as well as to teach them how to do validations in a regulated environment,” she said.
“That contract worked so well — since we found out we have similar ideas about how to treat customers and similar motivations — that we decided to [formally] collaborate.”
The collaboration won’t affect existing Geospiza customers as much as it will those to come because new clients looking for a validated data-management system to support the development of genetic tests will have one-stop shopping via the companies’ partnership.
For example, sequencing services provider SeqWright of Houston, Texas, switched from manual tracking to Finch about two years ago but had to do all of the regulatory validation processes itself in order to offer services in the clinical market.
“Geospiza did not have the regulatory ability we needed to do this when we installed the software,” said Fei Lu, CEO of SeqWright.
Geospiza views the alliance with PSC as an important step in moving its software into the clinical market, but Keith Batchelder, CEO of consulting firm Genomic Healthcare Strategies of Charlestown, Mass, remains skeptical.
“We don’t have any clients using software like Finch,” he said. “I would say it’s interesting that they have announced in their press release that manual genetic analysis continues to be a major bottleneck…I just don’t believe that. I believe the stumbling block is clinical validation of the utility, and who is going to pay for that?” he said.
When asked why he thinks the announcement is being made now, Batchelder said he wasn’t sure. “I’d say they are looking for another round of money. They think this is a space that’s going to grow.”
Whatever the reasons for the timing of the announcement, both sets of business partners see ripe opportunities ahead.
“It’s a collaboration between the two entities to go to market with a solution for our clients, [whether for] quality control, an assurance step in the manufacturing process, or conducting clinical trials,” Arnold said. “They need to be able to certify their steps and processes; they need a system that can be validated. So that is how we are going to market.”