Oxford GlycoSciences has teamed with Marconi, a provider of broadband network and hosting capabilities, to launch Confirmant, a 50/50 joint venture that will offer IT hosting for biotech companies as well as access to proteome databases and data analysis software.
The partnership marks Marconi’s first venture into the life sciences, a data-intensive field that the company sees as a prime target for its broadband technology. “Marconi is seeking to position itself as a provider of communication solutions,” said spokesman Mel Foster. “This is an area where there is a very good match between our skills and experience and an application which naturally requires broadband communications and sophisticated IT solutions.”
It also signals a new role for OGS — that of a tool and data provider.
Confirmant’s first product will be a Protein Atlas of the human genome, targeted for completion within two years. Confirmant will contract OGS to build the Protein Atlas, which will use sequence information obtained from human proteins to identify protein-coding genes in the human genome.
OGS obtains protein sequence information using mass spectrometry instruments from Applied Biosystems and Isotope Coded Affinity Tag technology through a collaboration with Ruedi Aebersold of the Institute of Systems Biology. The sequence information is combined with annotated human genome information from the Ensembl database. Through the Confirmant joint venture, Marconi will provide OGS with the computing power to analyze the data, integrate information, and distribute it.
Michael Kranda, CEO of OGS, said the Protein Atlas would differ from protein databases being developed by Large Scale Biology and the collaboration between Myriad, Hitachi, and Oracle in its “accuracy, completeness, and speed.”
In contrast to the Myriad database, which is expected to be complete in 2004, Kranda said that the Protein Atlas should be complete — and generating estimated revenues of up to 22.5 million pounds sterling ($31.7 million) — by 2002. In addition, he noted, OGS is not trying to map every human protein, but is concentrating on 20,000-30,000 disease-specific proteins. “We’re not going to go do this A to Z thing,” he said.
Marconi and OGS each contributed 15 million pounds in cash as initial funding for Confirmant. In addition, Confirmant will pay OGS 5 million pounds for exclusive marketing rights to its intellectual property on specific proteome databases, including the Protein Atlas, and will pay 1.5 million pounds to license data analysis software from OGS. Marconi will also invest 10 million pounds in OGS through a subscription for 645,162 new OGS ordinary shares at 15.50 pounds per share.
Kranda said that the idea of Confirmant was hatched when OGS began its search for a cost-effective way to double and eventually triple its compute capacity. Rather than invest in additional in-house hardware, the company opted for an outsourced service, and settled on Marconi based on its reputation for secure communications deriving from its background in the defense industry. The company’s broadband capability was also a plus, Kranda said, offering, “secure, real-time data movement.”
Kranda also noted that, unlike hardware providers that offer hosting services that are tied to their products, Marconi is platform-independent.
Recognizing the “good business opportunity” of providing outsourced compute power to other biotech companies that have so far been reluctant to adopt the approach, Kranda said the joint venture will provide revenue while permitting OGS to retain its identity as a drug discovery company.
“We have tried to appropriately confine the database side to validate our technology and generate some revenue, but it’s not our business,” said Kranda.
OGS and Marconi expect Confirmant’s first revenues to come primarily from hosting contracts, and eventually expect to provide online diagnostic services to physicians and healthcare facilities on a pay-per-use or subscription fee basis.