Now under new ownership, Integrated Genomics intends to take advantage of its new lease on life by improving its existing offerings and applying its software and expertise in microbial genomics to develop new microbial production systems targeted for use in the fermentation industry.
Although IG will continue to provide the same services based on its ERGO software, CEO John Elling told BioInform that the company's recent restructuring has opened the door to move its research efforts into new business areas that it has intended to pursue for some years but was unable to because of debts it had incurred during its early days.
Late last year, an Illinois-based corporation, IG Assets, acquired the rights to Integrated Genomics along with all associated intellectual property after the company went bankrupt. The new owners will continue to operate the Integrated Genomics brand and to provide ERGO subscriptions and genome analysis services to customers (BI 01/07/2011).
Elling explained that when the company was created back in 1997, it raised and spent about $20 million of equity and “incurred a substantial amount of long-term debt in the process of creating and running a high-throughput sequencing business.” That debt, he said, prevented the company from “moving forward” because it could not raise new money and because all its free cash flow was channeled toward paying its creditors, leaving little left over for new investments and improving existing offerings.
“Essentially … we recognized that the value of the company was lower than the amount of money that was owed to the current secured creditors,” Elling said. “So we … [transferred] the security interests of their loans to them … and it created a new company to operate the business that’s owned by the former secured creditors." He explained that the arrangement is much like what happens when a homeowner defaults on mortgage payments and the lending bank forecloses.
Now that the company is debt free, it is able to invest in new business opportunities in microbial, fungal, and algal genomics where Elling said there is a “greatly expanding market for the capabilities and products of the company.”
In addition to providing services to groups working in the medical and green chemistry markets, the firm has received a lot of “commercial propositions” from customers “who are interested in manipulating or understanding the genomes in microbes with biofuels as a commercial goal.” The customers are also interested in exploring fungal and algal genomes with the same aim, he said.
In the past, IG has worked with companies like Biobase, Mascoma, and Tsunamic Technologies as well as with research institutes such as the South Korean Research Institute of Bioscience and Biotechnology.
Although he could not mention specific customers, Elling said that his firm is partnering with several companies that are interested in producing algae-based biofuels, vegetable oils, and other types of compounds.
IG is also exploring some of its own ideas for using microorganisms as resources in the fermentation and biofuel industries, and Elling said that the company is seeking commercial partners for these new endeavors.
“Our new business direction tends to be whether we can create microbial production systems the same way our customers are trying to create them,” he said, emphasizing that the company doesn’t intend to duplicate its customers' efforts. “There are an infinite number of things that you can hope to engineer a microorganism to do and in some cases we see some opportunities to do that.”
IG has patents and patent applications on butanol production and glycerol metabolism, which it is already marketing to prospective customers, Elling said, adding that the firm plans to develop solutions for other issues in microbial genomics and in microorganism-based production.
Currently, the company has 14 staff members and Elling expects to hire more people, specifically microbiologists and informaticists, by the end of the year.
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