Skip to main content
Premium Trial:

Request an Annual Quote

Financial Prosperity in the Bioinformatics Business Still a Long Shot, Says Industry Panel

Premium

Have a great idea for a money-making bioinformatics product? Think again, cautioned a panel of industry players at the BioITWorld conference in San Diego earlier this month.

“How do you write a business case when the competition is free?” Rudolph Potenzone, CEO of Lion Bioscience, Inc., asked rhetorically. “A pure bioinformatics play is tough. The need is satisfied by the public domain or a free database.”

Alex Bangs, Entelos CTO, affirmed this view. His company is already on its second business model, abandoning a subscription-access approach for one using research collaborations based around its PhysioLab simulation technology.

Bangs pointed to Spotfire as a success story because “the product could be on anyone’s desktop. I would be very concerned today if I had enterprise software only pharma could understand.”

Pharma, however, may be slowly waking up to the power of bioinformatics, said Peter Bleicher, CEO of e-clinical trials firm Phase Forward. “Information technology for many years has been in the backwater in pharma,” said Bleicher. “I believe that’s changing; we’re in the midst [of that change].”

The evidence, he said, is that companies like IBM, Accenture, and Sun are taking the industry seriously.

However, these firms are more focused on pharma’s IT infrastructure, rather than on the bioinformatics tools and applications in the hands of researchers. Companies working exclusively in the area are facing stiff competition from academic and non-profit institutions, which Potenzone believes helped burst the short-lived bioinformatics bubble. He views free data and tools as steering money away from commercial products that could eventually prove innovative.

Peter García, CFO of Hyseq Pharmaceuticals, offered a more pragmatic view, suggesting that the tough funding market should not dissuade startups, so much as rein in their goals. What is considered successful “depends on your expectations,” said García. “If you have five guys from Stanford [who] want to make a few million, okay. You need to have expectations of what the market should accept.”

“There are not a ton of models that will work,” added Bleicher. “So you’ve got to pick something people will put real dollars in, to replace a process that already exists.” And, he cautioned, don’t rest your idea on the promise that it will shave months off drug development. “Pharma is too savvy for [that] pitch.”

The consensus message isn’t news to anyone who’s been tracking the sector: Bioinformatics is a tough sell for attracting investor dollars, and there are three initials that informatics entrepreneurs should wipe from their vocabulary: IPO.

— KH

Filed under

The Scan

Drug Response Variants May Be Distinct in Somatic, Germline Samples

Based on variants from across 21 drug response genes, researchers in The Pharmacogenomics Journal suspect that tumor-only DNA sequences may miss drug response clues found in the germline.

Breast Cancer Risk Gene Candidates Found by Multi-Ancestry Low-Frequency Variant Analysis

Researchers narrowed in on new and known risk gene candidates with variant profiles for almost 83,500 individuals with breast cancer and 59,199 unaffected controls in Genome Medicine.

Health-Related Quality of Life Gets Boost After Microbiome-Based Treatment for Recurrent C. Diff

A secondary analysis of Phase 3 clinical trial data in JAMA Network Open suggests an investigational oral microbiome-based drug may lead to enhanced quality of life measures.

Study Follows Consequences of Early Confirmatory Trials for Accelerated Approval Indications

Time to traditional approval or withdrawal was shorter when confirmatory trials started prior to accelerated approval, though overall regulatory outcomes remained similar, a JAMA study finds.