NuTec Sciences is abandoning its roots in the oil and gas business to devote its resources to bioinformatics.
On July 2, the company finalized the sale of its NuTec Energy Sciences division to TGS-NOPEC Geophysical — a Houston, Texas-based subsidiary of Norwegian seismic surveying firm TGS-NOPEC. The deal gave NuTec Sciences $11.3 million in cash, which it will direct toward building the life science half of its business, NuTec Health Systems.
“Selling off of the petroleum assets is enabling us to concentrate fully on healthcare,” Stephane Labonte, vice president of NuTec Sciences, told BioInform.
NuTec Sciences, a privately held firm headquartered in Houston, was launched in 1995 as an IT services shop focusing on the energy sector. In 1999, NuTec formed a second division, located in Atlanta that set out to apply the company’s data management and software development skills to the life science market. The company made headlines in late 2000 when it signed a deal with IBM to build a 5,000-CPU, 7.5-teraflop supercomputer to bolster its life science activities. The computer was the most powerful non-governmental computer at the time, and IBM’s first major life science HPC deal. [BioInform 12-22-00]
At the time, NuTec planned to make the supercomputer the centerpiece of its life science business, by renting out computer time on the machine or by using it to perform bioinformatics analysis on a services basis. But after announcing a flurry of collaborations in 2001 with NHGRI, Emory University’s Winship Cancer Institute, Zygogen, Genomic Solutions, and the UK’s Daresbury Laboratory, the deal flow dried up and the company fell off the bioinformatics radar screen.
Labonte said, however, that the health science business is picking up — a factor that led to NuTec’s decision to sell off the energy business and redirect those proceeds toward further growth in the life science market. According to a statement from TGS-NOPEC, NuTec’s energy business generated unaudited revenues of $10.6 million in 2003, and operating profit of around $2.5 million. But, according to Labonte, NuTec “identified the growth as being much higher in healthcare than what we had reached in petroleum.”
Plans involving the IBM machine have been shelved, Labonte said, because the company included the supercomputer in the sale of its energy assets. NuTec will now concentrate its efforts on contract programming and services for healthcare IT departments and on sales of its GeneSys SI bioinformatics system — a software platform developed to integrate genetic and clinical data.
The company recently signed an agreement with Memorial Health University Medical Center in Savannah, Ga., that reflects this hybrid model. Labonte said the company will integrate all the hospital’s research, clinical, and financial databases, and then deploy the Genesys SI software tools on top of the integrated database.
Future growth, Labonte said, will focus on “obtaining more clients both on the research hospital side and the commercial hospital side.”
Labonte said it was too early to discuss further details of the company’s strategy, but said that NuTec is “close to signing some other contracts,” and that the firm is forecasting 100-200 percent growth in its life science business for 2005.