NetGenics has landed a deal with Schering to build a corporate-wide gene database using components from its upcoming DiscoveryCenter product.
While DiscoveryCenter isn’t due for commercial launch until September, Michael Bush, NetGenics director of sales, said Schering would have access to a “subset” of the product’s components as part of the deal between the companies.
Bush said the multi-year agreement includes licensing, support, and custom development. Financial terms were not disclosed.
The deal should bolster the company’s position as it emerges from a tumultuous year. After announcing plans to go public in March 2000, deals and potential relationships with American Home Products, Pfizer, and Abbot fell through for NetGenics as bioinformatics competitors like Genomica, Lion Bioscience, Compugen, and InforMax successfully completed their IPOs.
But Schering’s confidence in NetGenics’ ability to meet its needs could help put the company back on firmer footing. “The fact that NetGenics has been able to do this deal on attractive terms is a big endorsement for the company and its products,” said Kate Bingham, a general partner at International Biotechnology Trust, an investor in the company.
The deal will offer a chance for NetGenics to prove it is capable of following up on promises to clients. The company has drawn criticism in the past for biting off more than it can chew.
Andreas Becker, the project manager for the Schering database, said Schering considered NetGenics’ spotted history with its previous clients before agreeing to the partnership. “The feedback we received from their reference contacts was very supportive as to the quality of the solutions they had implemented, and I understand it was managerial decisions not to continue,” said Becker.
Becker added that Schering evaluated “all the major companies on the market that would provide data integration and services either remotely or on site” before setting upon NetGenics. He said that NetGenics’ ability to integrate flat file databases with relational databases and to integrate disparate data domains gave the company the edge over its competitors.
Over 200 users at Schering’s major research sites in the US and Europe will initially use the combined database, which will integrate curated and annotated gene data, sequence data, and expression data through a single user interface. Becker said Schering’s databases are evenly divided between proprietary, public, and third-party data. New databases will be integrated into the system as they become available.
Schering’s bioinformatics staff will collaborate with NetGenics on the corporate-wide database. Select NetGenics components, which include querying tools, datamarts, and IBM’s DiscoveryLink technology, will be combined into a unique solution that “will give us a competitive advantage because it’s not available to other pharmaceutical companies,” Becker said.
This “a la carte” approach to bioinformatics should appeal to prospective customers who want to “integrate their data in without being shoehorned into particular data formats,” Bush said.
The Schering deal also signals a slight deviation from NetGenics’ previous client relationships. Acting as both a software provider and a consultant in its mix of components and customization, Bush said the new offering takes the consulting role it played in the past “one step further.”
“It takes us from consulting around an implementation to a consulting deal around a solution that meets [the client’s] needs,” Bush said. “The solution and the components are either already developed or in development so they plug right in. Rather than having to go build a completely custom solution for a customer that may take a year or two years, it allows us to speed up their implementation time and stay more focused.”
NetGenics has installed DiscoveryCenter at several other sites and the company expects to make several more announcements over the next few months, Bush said. He added that the company is rebuilding its staff after the January layoff of 29 of its 100 employees, primarily in the marketing, consultancy, IT, and administration departments. Bush said NetGenics has added two new members to its sales staff this week in addition to some other “strategic hiring” in other areas of the company.