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GenoLogics Pockets $5M in VC Funding to Accelerate Sales, Product Development

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Proteomics software startup GenoLogics last week closed a $5 million Series A financing round led by OVP Venture Partners of Seattle and Yaletown Venture Partners of Vancouver. Working Opportunity Fund, managed by Growth Works Capital of Vancouver, also participated in the round.

The company, based in Victoria, British Columbia, will spend the cash more or less evenly between expanding its sales and marketing operations and its product-development activities, CEO Michael Ball told BioInform.

Ball said that the company plans to triple in size during 2005, but did not disclose the current number of employees at the firm. In November, 14 people worked at the company [BioInform 11-22-04].

GenoLogics was founded three years ago with backing from Genome British Columbia and Genome Canada. It has also raised an undisclosed amount of venture capital from BC Advanced Systems Institute and the Canadian National Research Council.

But the Series A round represents a relative windfall for the firm. “They had been running the company on a shoestring for the last couple years, really trying to prove there was a market and prove that they have the right product for the market, which I think they’ve successfully done,” said Chad Waite, a general partner at OVP. “So now, the next task is to hire,” he said, noting that the company only has one salesperson at the moment.

GenoLogics released the first version of its flagship product, ProteusLIMS, last April. This week, the company is launching version 2.0 of the software at the Association of Biomolecular Resource Facilities conference in Savannah, Ga.

The company is banking on market demand for a LIMS product specifically targeted toward the proteomics research market.

Currently, Waite said, most proteomics data-management software is “being generated by the instrument manufacturers, and obviously it’s not in Agilent’s best interests to have its instruments talk to Applied Bio’s.” On the other end of the spectrum, he said, “people that have been making LIMS systems make them so generic that they don’t interface to any instrumentation. So you’ve got on the generic side that it doesn’t integrate, and on the instrumentation side it doesn’t communicate.”

ProteusLIMS provides sample tracking, lab management, instrument integration, and workflow management for gels, mass spectrometry, and protein searches. The latest version of the software is integrated with Nonlinear Dynamics’ Progenesis 2D gel analysis software and Matrix Science’s Mascot protein search software.

The company said it is currently integrating Sequest and other proteomics analysis tools, but did not specify which ones, or a timeline for when those products would be integrated with the system.

Ball noted that as GenoLogics expands its product portfolio, it won’t go head-to-head with analytics providers like Mascot or Nonlinear. “There are all sorts of protein-search tools and 2D-gel analysis tools. We don’t intend to compete in that market,” he said. “But we do want to be able to provide some context for all those different analysis products and the data that they produce in more of a holistic way.”

Ball declined to provide further details on the company’s future plans in this area, but described the expanded offering as “high-level analytical tools that would be very complementary to the existing point tools that are available.”

GenoLogics also plans to expand beyond proteomics software and into data management for transcriptomics, metabolomics, and other data types that fall under the systems biology umbrella. “Where we see an opportunity is in the integration of these disciplines, and being able to track and manage data across disciplines rather than just in proteomics or just in transcriptomics,” Ball said.

The company expects to release “one or two” more upgrades for ProteusLIMS this calendar year, with the systems biology platform “more of an ‘06 project,” Ball said.

Ball said he did not yet have permission to name specific customers for the company’s products, but noted that “over the last couple of months we’ve signed a couple of very high-profile academic sites,” and “at least one” US-based pharmaceutical customer.

“One of the biggest challenges we’re hearing from people doing proteomics research is how do they manage all this data,” Ball said. “They’re typically not IT people, and building their own system is generally not an option — it’s quite complex and not very cost effective. So they’re looking for organizations such as us that can come in and help them manage the data.”

Waite said that OVP has pegged the potential market for proteomics data-management at around $200 million to $300 million for 2005, reaching about $500 million in four or five years.

Waite did not disclose what portion of this total market GenoLogics may capture, but acknowledged that the young firm is not alone in the space. “There’s going to be competition — there’s no way around it,” he said. “They just have to be smarter and brighter and cleverer and quicker and better at execution.”

Indeed, a number of startups have recently emerged in the proteomics software market, such as Insilicos [BioInform 01-31-05] and Beavis Informatics [BioInform 10-24-04], and it may be only a matter of time before more established players turn their attention to the space.

But Bell readily acknowledges this growing field of competitors.

“Compared to a year ago, there’s certainly more activity in this market,” he said. “I think we’ve got a lead in the market in terms of our product strategy and the customers we’ve secured, but I have no doubt that it will become more competitive.”

This competition is “part of the reason we went out to raise a significant amount of money,” Ball added. “We felt that we needed to accelerate our market penetration and our product development. So we think we’re well positioned now, compared to some of our competitors.”

— BT

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