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GeoSpiza Buys VizX’s GeneSifter; Aims to Apply Array Tool to Digital Gene Expression

Geospiza has acquired VizX Lab’s web-based gene expression-analysis software GeneSifter — the sequence-analysis software firm’s first tool for microarray analysis — and plans to apply it to digital gene-expression analysis on second-generation sequencing platforms.
“This is effectively an asset sale,” Rob Arnold, president of Geospiza, told BioInform. GeneSifter was VizX’s only revenue-generating product, he said. “When we bought the product, we in essence bought the principal asset of the company.” No financial details of the acquisition were released.
A VizX spokesperson told BioInform that the company will be liquidated over the next few months.
N. Eric Olson, director of product development at Geospiza, joined the firm two years ago from VizX. Olson, who “was the original creator of the GeneSifter technology,” worked with Jeff Kozlowski in developing the technology while they were both researchers at the University of Washington.
Kozlowski has now also left VizX to join Geospiza, he said. An undisclosed number of additional employees in various departments will move to Geospiza, but the VizX spokesperson declined to offer further details.
GeneSifter is Geospiza’s first microarray product, and the company sees its “major thrust” in second-generation sequencing. “People are in fact using next-generation sequencing to do applications in digital gene expression,” he said, with sequencing as the quantitative measure to determine expression.
Geospiza is not the first bioinformatics firm to identify sequencing-based gene expression as a promising market opportunity. Just last week, JMP, a business unit of statistics software firm SAS, announced that it has expanded an existing partnership with the National Center for Genome Resources to modify its JMP Genomics array-analysis software for gene-expression analysis on second-generation sequencers [BioInform 11-14-08]. 
Arnold said that demand is on the rise for gene expression analysis tools that can also handle sequencing data. “What we are seeing is that a lot of the microarray laboratories are very quickly grabbing onto next-generation sequencing and pulling these technologies through,” he said.
Geospiza views this trend as “really important,” Arnold said. The company’s flagship FinchLab software already offers what he described as the first two steps in digital gene expression on second-generation sequencing platforms: quality control and the ability to translate sequencer output.
“The third step, which is really where GeneSifter comes in, is where we can do statistical visualization of that data,” he said, adding that the acquisition has positioned the firm to establish “a complete system and a complete set of workflows.”
In weighing the decision to either develop a gene expression analysis system in house or to buy one, Arnold said that Olson’s track record with the GeneSifter technology and the fact that the software is web-based tipped the scales in favor of a purchase.
“Geospiza built a web-based system; VizX built a web-based system. The architecture and the approach they took at VizX was very much in concert with the way we think about the market as well,” he said.
When the opportunity arose to acquire the technology, “it was a nice fit for us,” he said adding that it was in line with the firm’s development roadmap.
“We see very significant potential in these information technologies,” he said, since their value will continue to increase as the cost of collecting second-generation data drops. Strategies for automation and simplification will be “highly desirable” as budgets tighten, he said. “We are extremely optimistic about what we see happening in the market.”
Build or Buy
The decision whether to build or buy is similar in any new software area, said Dan Rosen, CEO and president of Dan Rosen & Associates, an early-stage investment and advisory firm.
Rosen is on Geospiza’s board of directors, and he advises the firm, which is one of his company’s portfolio companies.

“Geospiza built a web-based system; VizX built a web-based system. The architecture and the approach they took at VizX was very much in concert with the way we think about the market as well.”

“People will build at the beginning because they have some relatively unique needs and they want to make sure whatever software they have matches those needs,” he told BioInform.
“However, as the problem becomes more sophisticated, like this one is, building becomes totally impossible, when you can buy for a small amount of money something that meets 85, 90, 95 percent of your needs and then add the last little bit on top. That is a much more attractive proposition than trying to build everything from scratch,” he said.
In his view, the challenge of gene sequencing has “shifted from gene sequencing to being about the data.” Geospiza is in a “unique position” to be able to solve that problem, he said, because labs doing genetic analysis need a “very robust system.”
While the market for second-gen sequencing is currently in the research sector, as genetic tests become as common as blood tests, that will change the marketplace “dramatically,” he said, adding that he sees other applications in medicine, forensics, and agriculture.
“I am firmly of the belief that genetic analysis is going to become a part of daily business and there are going to need to be tools like Geospiza’s that are going to perform that kind of work,” said Rosen.  
The acquisition of GeneSifter along with its developers is “the only path to success,” he said, praising the company’s recruitment of VizX’s scientific and technical personnel.
Chase the Platform
Although he didn’t name them, Arnold said there are other technologies on the market that “seem to be a good fit” for GeoSpiza.
However, he added, “it’s a very thoughtful process to go through with that. We have to look at how these things would work together, what the technical requirements to doing any type of integration [are].”
Geospiza plans to integrate GeneSifter with its FinchLab lab-management workflow platform. In internal studies, SOLiD data has already been run through the entire platform, he said, adding that Geospiza will be “going after all the next-generation sequencing platforms.” ABI’s SOLiD and the Illumina Genome Analyzer “are the first two on the list,” he said.
The system will be able to handle lab protocols for processing the samples, loading of samples onto the instrument and the runs, taking the data through different analysis tiers, and continuing the analysis through to statistics and visualization. “It takes the data out to its endpoint,” he said. 
“We think that this is going to be of value to our core laboratory customers,” Arnold said, since those lab teams are looking to add value for their customers as they process samples.
He believes this workflow will also be of “significant value” to end users dealing with the data analysis issues of second-generation sequencing themselves and who seek access to high-performance software and IT infrastructure. “Very few will have the resources to set up that sort of system on their own,” he said.   
Geospiza’s FinchLab platform lets scientists perform primary and secondary analysis on their second-generation sequencing data sets, converting, for example, SOLiD’s color space or the 454 flow space into sequence data, aligning the data against chromosomes and genes of interest, and enables them to study patterns of variation.
GeneSifter offers users a workflow, letting them apply the statistical language R and a variety of statistical algorithms, such as RMA, ANOVA, or PAM, to identify differentially expressed genes. The software also lets users drill into the data to learn about the biological implications of their results, to identify genes, generate gene ontology reports by linking out to GenBank or KEGG, and to create pathway reports.
As Arnold explained, IT issues can be “overwhelming” for research teams, but a web-based workflow can help. “We can provide them access to these very sophisticated tools where Geospiza manages the computing infrastructure for them,” Arnold said.
Arnold said that Geospiza’s first plan following the acquisition is to build relationships with VizX’s customers. “The first order of business is to make sure [GeneSifter’s] customers are comfortable,” he said, adding that Geospiza “has some thoughts for improvements” to GeneSifter, but wants to make sure we understand what the customers’ requirements are.”

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