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Paracel s Six-Month Post-Acquisition Report Card: Merck, Sanger Added as Clients

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In the six months since Celera Genomics spent $283 million to acquire Paracel, the accelerator developer has gained a host of new customers and expanded its focus to include separate software products.

In the past half year Paracel has added Merck, Rosetta Inpharmatics, Sanger Center, and Stanford University as customers, bringing the number of clients for its GeneMatcher hardware accelerator to 40 biotech and pharma customers.

In addition to its hardware, it is also trying to make a name for itself on the software side. Seeking to get its software into more laboratories, it has partnered with Celera’s sister company Applied Biosystems to bundle Paracel’s TraceTuner base-calling software with the ABI Prism 3700 DNA Analyzer sequencing machine.

“We are still operating as a products business and we are growing maybe even more aggressively than we were before,” said Kwang-I Yu, Paracel’s president and a Celera senior vice president. “Paracel as a business is going forward on all cylinders.”

Yu said the company has benefited greatly from access to Celera and Applied Biosystems data, which enables Paracel to test its existing products as well as those under development.

According to Yu, the integration of Paracel with Celera has been a success and morale is good. As proof, he pointed to the company’s ability not only to retain but also expand its staff from 85 to 110 employees.

As the company grows, it is retaining its focus on research and development as evidenced by its 70-person R&D team, said Yu.

One area of growth is its software business. “This is the first quarter when we have generated any kind of significant revenue out of software-only products in addition to our hardware accelerator,” said Yu. He declined to reveal how much revenue has been generated and which companies have been buying the software.

In September, the company launched its Paracel Clustering Package software and a subset of that called CAP4 for sequence assembly.

It also added an accelerated version of the GeneWise gene finding algorithm to GeneMatcher. Paracel took GeneWise, which was developed by Ewan Birney of the European Bioinformatics Institute, and made it about 1,000 times faster, said Yu.

Birney helped the company confirm that the accelerated GeneWise still produced scientifically valid results, said Yu. The software was also tested at Celera, which currently uses the software. Paracel recently finished retrofitting Celera and other existing GeneMatcher customers with GeneWise.

Besides giving Paracel access to data, Celera has fostered collaborations between its algorithm developers and Paracel’s researchers.

—Matthew Dougherty

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