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Increased Competition, Investments Among Hallmarks of Bioinformatics Market in 2015


NEW YORK (GenomeWeb) – A saturated software market and competition from instrument vendors and other larger players did not deter new bioinformatics businesses from venturing into the market with products that in many cases mirror those sold by more established companies with slight variations in business models, target markets, and capabilities.

ViaGenetics, for example, launched a proprietary platform called Genesis that offers cloud space and storage as well as computational tools for managing and analyzing whole genome and exome data. It's similar to DNAnexus' offering but is much simpler to use which the developers believe should make it appealing to less bioinformatics savvy-users. Similarly, GenomeNext offers a proprietary pipeline for variant analysis and annotation which has things in common with Tute Genomics' offering among others — it touts reproducibility as a key differentiator of its product. Signifikance, meanwhile, hopes to make its bread and butter by offering software for analyzing and interpreting cancer genomic variants in whole-genome sequence in clinical contexts. Its product competes with offerings from clinical interpretation companies like Personalis and Omicia but the company offers additional services that it claims help set it apart from these firms.

Other newcomers included Deep Genomics, which this year launched Splicing Index — the first of several planned products for the genomics market — which uses deep learning techniques to identify variants that impact and change cellular processes in the context of disease. Meantime, privately held startup Sequence Bioinformatics plans to offer proprietary access to integrated clinical and genomic datasets as well as computational tools for identifying therapeutic targets for inherited diseases, cancer, and other ailments. 

Also recently opened for business is FactBio, whose first product called the Knowledge Sharing Platform provides tools for tracking and integrating public and proprietary datasets. The product is slated to go into beta testing in the first quarter of 2016. Ann Arbor, Michigan-based startup Genomenon, meanwhile, began recruiting early adopters this year to test drive its first product, which is a curated cloud-based database of genomic mutations called Mastermind; while UK-based software firm Repositive said this year that it is prepping a commercial platform for sharing data stored in public, semi-public, and proprietary repositories. Also this year, SQream Technologies, a developer of databases for big data analytics, launched GenomeStack, its first product for the life sciences market; while healthcare informatics startup Massive Bio began testing its oncology clinical decision support system.

It's also worth noting that some of these companies spawned from academic projects that have been in place for several years and probably already have established users who are comfortable with the software. Development for ViaGenetics' platform for instance, started in 2009 at the University of Miami and has been used by researchers there and elsewhere for a number of years. Another example is GenoCAD, a rules-based DNA design web application originally developed starting in 2007 by researchers at Virginia Tech's Virginia Bioinformatics Institute but now being commercialized by VT spinout GenoFAB

There's also Curoverse, a Harvard Medical School spinout, which is developing cloud-based and on-premise implementations of Arvados, a computational storage platform used by biomedical research projects at HMS. Other examples include Deep Genomics, which leverages computational models that were developed by researchers at the University of Toronto; and GenomeNext, whose platform uses technology developed by researchers at Nationwide Children's Hospital in Columbus, Ohio. Finally, Smpl Bio offers software that leverages machine learning algorithms developed at the University of Connecticut to select candidates for targeted sequencing, qPCR panels, and other biomarker platforms. 

Competing for Customers

These companies have to compete not just with other pure-play bioinformatics companies but also with instrument vendors and other larger players who are scooping up bioinformatics companies to provide support systems for existing offerings or to offer more comprehensive solution suites to customers. For example, this year Illumina picked up GenoLogics for an undisclosed amount adding a laboratory information management system to its menu of genome analysis offerings as well as third-party applications on BaseSpace. Meanwhile, Agilent bought Belgian firm Cartagenia, also for an undisclosed amount, to provide a more complete analysis pipeline to clinical genetics and molecular oncology customers. Finally, Roche bought Bina Technologies for an undisclosed amount in December 2014 and then rolled the company into its sequencing unit in early 2015 intending to use its software to support multiple sequencing technologies.

Some companies also continue to sell their bioinformatics products on a standalone basis in addition to using them to support other products. WuXi PharmaTech scooped up NextCode for $65 million to support its genomics laboratory services business but continues to offer the company's software on a standalone basis. Other major acquisitions for the year included one by Human Longevity, which picked up genome interpretation software firm Cypher Genomics for an undisclosed amount. Finally, Tute Genomics acquired and integrated some assets from troubled genome interpretation firm Knome into its existing platform — the amount of the sale was not disclosed.

There is also competition coming from companies that have retained some kind of presence in the bioinformatics space over the years, despite it not being their primary focus. One of these is PerkinElmer, which released a cloud-based data management, aggregation, and analysis platform called Signals for Translational to help pharma companies combine and analyze data from various sources. Also, SAP launched two new solutions for the personalized medicine space based on its Hana in-memory database computing technology while researchers from EMC developed an appliance that provides local compute power and resources for omics data management and storage.

Comprehensive portfolios as well as revenue from diverse product categories gives larger companies an important advantage over much smaller, pure-play bioinformatics companies whose profits come solely from software and services sales. But continued financing for bioinformatics companies, as well as the recent launch of a $200 million bio fund by Andresseen Horowitz, suggest that there is enduring interest from investors and optimism about the market's prospects and potential for growth.

This year, Utah-based bioinformatics company Tute Genomics raised $3.9 million in a series A from investors such as Intermountain Healthcare, while GNS Healthcare landed $10 million in a Series C financing round that included investments from Celgene and Gi Global Health Fund. Computational drug discovery services firm TwoXar and lab notebook software firm Benchling, meanwhile, raised $4.5 million and $5 million, respectively, from a number of investors including Andreessen Horowitz in both cases. 

Desktop Genetics, an informatics startup focused on CRISPR-based gene editing, raised $2.2 million from London Business Angels and other investors and then earlier this month secured a second undisclosed investment from Illumina. Also, Dutch genome informatics firm Bluebee added $1.9 million to its coffers from Delft University of Technology and others; while Deep Genomics raised $3.7 million from True Ventures and others. Lastly, Repositive raised about $446,000 in seed funding from angel investors and others.

There were also larger investments in some companies that included allotments for bioinformatics. For example, Sequioa Capital invested $20 million in MedGenome, a portion of which the company dedicated to beefing up bioinformatics pipelines to better handle and analyze data from its drug development projects. Allscripts, meanwhile, invested a whopping $200 million in NantHealth to support that company's efforts in the precision oncology space which include an informatics component.

To stay in business, pure-play bioinformatics firms have had to come up creative ways to keep their pipelines fresh and woo new customers. In addition to varying their software features and business models, companies also turn to partnerships as a way to expand their product menus, bridge gaps in their offerings, and save on time and costs associated with developing new products or features for existing products entirely from scratch.

DNAnexus and Tute Genomics, for example, agreed to combine their platforms to provide a cloud-based solution that covers initial data analysis through to clinical interpretation. DNAnexus also signed agreements with Qiagen and BioNano to provide cloud-based access to computational products from both companies — Ingenuity Variant Analysis' Qiagen's variant interpretation solution; and IrysSolve, BioNano's whole-genome analysis algorithms and pipeline. Lastly, DNAnexus also partnered with WuXi NextCode to provide a cloud-based version of that company's software to researchers in China as well as to roll out targeted offerings for pharma and diagnostic customers based on their combined platforms.

Computing on the Cloud

Companies also continue to leverage cloud infrastructure to offer more infrastructure access options, address different customers' needs, and to differentiate themselves from the competition. For example, Cosmos ID, which markets a competing metagenomics classification system, launched an app on Illumina's BaseSpace that offers cloud-based access to some of its product functionalities — this is in addition to existing services and appliance options for metagenomics that the company already markets. One Codex, on the other hand, offers a competing metagenomics classification and identification system similar to CosmosID's that is only available on the cloud. Auckland, New Zealand-based Biomatters plans to begin offering cloud-based applications for analyzing metagenomics and oncology data in addition to Geneious, its existing desktop solution. 

The list of commercial cloud options available to the community has remained largely unchanged. Amazon already had established deep roots in the genomics space but Google has also been carving a much bigger niche for itself. This year, for example, Google's genomics arm inked a deal with the Broad Institute to provide cloud-based access to bioinformatics tools and infrastructure including the Broad's Genome Analysis Toolkit. This is in addition to a number of other partnerships Google is involved in, one of which is with Autism Speaks to develop a repository of sequence, phenotype, and clinical information from 10,000 individuals and families with autism — the partners shared some of the fruits of their efforts this year.

However, these are not the only technology providers who are trying to make inroads into the space. Microsoft Research inked a deal with the Genomics Institute of the University of California, Santa Cruz this year to use the Microsoft Azure cloud computing platform to analyze data from various large-scale cancer projects that they are involved in including the International Cancer Genome Consortium. Also, Apple has shown some interest in the space with the launch of ResearchKit and a first set of apps largely focused on health but roping in at least one major player in the genomics domain.

Meanwhile, Intel has begun providing versions of several popular bioinformatics software that have been optimized to run on the company's processors. Intel also said this year that it is developing platform-as-a-service infrastructure that will help hospitals and research institutions securely share private genomic, imaging, and clinical datasets. In addition, the company has a number of partnerships with computational companies that offer tools for processing and exploring genomic data such as Edico Genome, for example. Dell also upgraded its genomic analysis offering to provide additional processing power and reduce sample analysis times while supercomputing vendor Cray is trying to get some its high-performance computing systems installed in data centers within pharma.

Better Sharing

Another trend worth noting in 2015 were increased efforts to remove barriers to data and simplify sharing in a variety of research contexts.

In addition to large-scale efforts such as the National Cancer Institute's Cancer Cloud pilots, the Global Alliance for Genomics and Health, and the Cancer Genome Collaboratory, there are initiatives such as PrecisionFDA, a US Food and Drug Administration-led effort that aims to provide a cloud-based environment for NGS test developers, bioinformatics, standards bodies, and regulatory experts to share genomic data and benchmark their software. The FDA tapped DNAnexus to build the underlying infrastructure for the platform.

Besides the aforementioned Google-Autism Speaks project, researchers at Stanford University along with collaborators at other institutions are putting together a parallel open repository of data from potentially 10,000 individuals with autism and their families. Earlier this year, Sage Bionetworks launched a public portal that holds multiple Alzheimer's disease datasets from projects being conducted under the auspices of the Accelerating Medicines Partnership's (AMP) Alzheimer's initiative. 

There's also an international team of investigators from various academic institutions, public health agencies, and nongovernmental organizations putting together a cloud-based repository of global tuberculosis data to support improved diagnostic development and clinical decision making. Additionally, the American Association for Cancer Research launched the Genomics, Evidence, Neoplasia Information Exchange (GENIE), which is an international data-sharing initiative focused on creating a registry of data cancer patients. 

On the commercial side, Qiagen partnered with 13 institutions and life science companies to launch the Allele Frequency Community, a freely accessible repository of allele frequency information from human genomes and exomes. Also, GenomeDx launched the Decipher Genomics Resource Information Database program, which is intended to allow institutions to share extensive genomic data with patients participating in clinical registries and trials for new treatments. 

Efforts to improve sharing are not limited to just data. A group of researchers within the computational community are currently working on what's called the Common Workflow Language, which provides standard specifications for describing analysis tools and workflows that should make them easier to share and run across platforms. Also four UK universities are working together to provide academic researchers in the UK with cloud-based compute, storage, and bioinformatics algorithms and pipelines for analyzing and making sense of microbial genomes.