Gordon Stranks, President and CEO, BioTools

AT A GLANCE

BS in physiological psychology from the University of Alberta plus “a couple of masters that aren’t related at all.”

QWhere will bioinformatics be in two years? Five years?

AOver the next couple of years the big battle is integration. Bioinformatics will have to become more applied and more integrated in order to work with genomic and proteomic and metabalomic data. In five years computational tools will be so integral to life science research that you won’t be able to do it without a computer and databases and visualization and analytical software.

QWhat are the biggest challenges the bioinformatics sector faces?

AThe biggest challenge is people right now: There’s more work to be done than there are people to do it, so the training of bioinformaticians is critical for this industry to move forward as rapidly as possible. There’s a need for bioinformaticians who have the ability to write the code to build robust, insightful analytical tools, and there’s also a need for people who are trained to apply those tools.

QWho are your current customers and partners?

AOur customer base is split just about 50/50 right now between people to whom we sell our proprietary GeneTool, PepTool, and ChromaTool products and our consulting and contractual development clients.

Our biggest partner on the commercial side, DoubleTwist, is becoming more of a data provider, and so we licensed GeneTool and PepTool to them to make it available to all their subscribers. Since then we’ve developed tools for DoubleTwist — many of the analytical and visualization tools that they require behind their firewall to protect those value-added data.

Academically, our biggest partner is the University of Alberta. All four of our founding scientists are there and work tremendously with our company. We also made a donation of our software tools with a retail value of over a million dollars to the university.

The National Research Council of Canada is our biggest governmental partner. We’ve worked hand-in-hand with the NRC for a number of years and now Genome Canada is putting $300 million into genomics in Canada and we’re certainly partnered into that.

QWhat non-existing technology is number one on your customers’ wish list?

ANow with high-throughput data production, high-throughput analytical tools are required. That’s number one on our customers’ wish list and we’re in the process of casting many of the features of our existing products as high-throughput modular tools.

QDo you see BioTools more as a software provider or as a consultant?

AWe’re absolutely a software provider. We build tools, and there aren’t a lot of companies in the world that do that now. There are a number of bioinformatics companies that are life science Internet portals, and a number of companies are integrators, but we are targeted on being the best tool-maker for analysis and visualization. Most of the consulting that we do is actually contractual development of those tools.

QWhat is the company’s annual revenue? Are you profitable?

AOur revenue in our last fiscal year was in the single-digit millions and our profit on that revenue was in the range of 30 percent. I’m not sure if there’s another profitable bioinformatics company in the world. There are certainly companies that are larger than ours that have all kinds of equity investments, but their burn rate exceeds their revenues. We’ve been able to earn more than we spend.

QDo you expect to see more M&A activity in the sector?

ADefinitely yes. In any emerging field of endeavor, you usually see a great deal of M&A activity as it matures. BioTools has had some acquisition offers in the past, and they continue. That’s certainly a possibility for a company like ours, if the right partner was there. You’ll probably continue to see big pharma and large biotech absorb the cream of the crop of the bioinformatics companies.