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Juno Signs on Bioinformatics Incubator As First Distributed Computing Customer: May 7, 2001 (rev. 1)

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Almost three months after Juno Online Services announced its expansion into distributed computing services, the company found its first potential customer last week in the form of bioinformatics incubator LaunchCyte.

LaunchCyte, based in Pittsburg, Pa., has agreed to design a pilot project to run on Juno’s network of Internet service subscribers’ computers. LaunchCyte has no obligation to enter into a long-term contract with Juno, said LaunchCyte CEO Thomas Petzinger.

In February, Juno hired Yuri Rozenman to head the company’s foray into distributed computing, a sector already populated with several other companies, such as Parabon, United Devices, and Entropia. Juno says that with four million regular users of its Internet access service, the Juno Virtual Supercomputer could rival the fastest supercomputers in the world.

But like other providers of distributed computing services, Juno hasn’t had customers flocking to sign up. As its first potential customer, one-year-old LaunchCyte consists of three seed-stage companies working in the fields of protein assay microarrays, gene expression pattern analysis, and hospital services optimization.

Petzinger said the as-yet undefined trial project with Juno would involve computations for research and development of the protein assay and gene expression initiatives.

Because LaunchCyte is a “startup of startups” with limited funds, Petzinger said, the company’s options for accessing computing power for R&D were limited. Rather than buy a cluster of Linux servers or team up with an academic supercomputing laboratory, the company found distributed computing power to be a more affordable alternative.

In addition, the distributed supercomputing resources provided by Juno could significantly speed the R&D process for these companies, Petzinger said, enabling them to perform analyses in weeks that would otherwise take months on traditional supercomputers.

“Although the bioinformatics market is still in its infancy, it is already highly competitive. Anything that speeds up the developmental process has the potential to provide a significant competitive advantage,” Petzinger said.

Petzinger said that other distributed computing companies had approached LaunchCyte, but the discussions with Juno were the first to turn serious. “Juno enticed us with very favorable terms and impressed us with the seriousness of their approach” and commitment to bioinformatics, Petzinger said. “They were willing in a sense to let us have our cake and eat it too.”

Juno spokesman Gary Baker conceded that the potential for revenue this year from the current agreement is small, but that the long-term promise is worth the risk.

“There’s no significant amount of cash changing hands at this point,” he said, “but we do know that companies are spending millions on computing power, and we want to get our own sliver of that.”

For the moment, however, LaunchCyte is unlikely to spend millions. The company completed an initial funding round last October, raising $2 million, and is currently trying to round up biotechnology companies to invest in a new $5 million round.

The company’s protein microarray initiative, named Morewood Molecular Science after a street near LaunchCyte’s Pittsburgh home, will license technology for high-throughput assaying of enzymes developed at an Ivy League medical school, according to Petzinger. A licensing deal is imminent, but not yet official, Petzinger added.

Geniac, the company’s gene expression analysis initiative, is developing algorithms for a “meta-level way of looking at gene expression,” rather than by individual data set, Petzinger said. The technology is being developed internally by LaunchCyte scientists under the direction of Jonathan Kaufman, a biochemist and molecular biophysicist trained at the University of Pennsylvania Medical School.

LaunchCyte’s companies ultimately hope to license and sell software, perform research services, and play a role in drug development.

“We may not develop compounds,” Petzinger said, “but we’d like to be in a position to act as a partner in qualifying them.”

LaunchCyte expects to help start more than two dozen bioinformatics companies over the next seven years.

— JSM

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