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As Pathway Informatics Matures, Users Refine Buying Criteria, and Vendors Adapt

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Over the past two years, the commercial market for pathway data and analysis tools has emerged from relative obscurity to take center stage in the life science informatics sector. Even as traditional genomics-based software vendors see their revenues decline, companies like GeneGo, Jubilant Biosys, and Ingenuity Systems are signing deal after deal.

So far in 2005, these three companies have announced a total of eight agreements for their pathway informatics tools — and all three predict even further growth over the remainder of the year.

But that optimism is tempered with a dose of reality, as these vendors recognize that competition is stiff and the current boom won’t last forever. “There are a lot of companies out there now doing this,” said Jake Leschly, president and CEO of Ingenuity Systems. “You have a lot of people entering the market, and you have customers that are doing two things: They’re trying to understand who the different competitors are … and they’re trying to understand how does this create value for me?”

The pathway informatics field is currently in an exploratory phase, industry observers noted, in which buyers are sampling many different commercial offerings to determine which ones — or one — suit their research needs.

“Right now, we’re using everything that’s out there, everything we can get our hands on,” Nathan Siemers, director of R&D at Bristol-Myers Squibb, told BioInform. “This whole field is at an early stage, and we’re gaining exposure and trying to come up with long-term strategies, and really coming to understand how this will affect the business of drug discovery — teasing out sort of the ‘gee-whiz’ factor from the business utility.”

As customers emerge beyond this exploratory phase, Leschly said, the pathway informatics market “will shake out over the next year or two … and there will be one, maybe two, dominant players, and there will be nobody much else around.”

Julie Bryant, vice president of business development and marketing at GeneGo, agreed. “Last year, I think [customers] were buying one of everything. This year, they will make decisions,” she said. “I think what we’ll see this year is that choices will be made, and at the moment if they’ve got five platforms, they may go down to one or two.”

For the short term, it appears that the recent deal flow will continue at its current pace as buyers evaluate their options. This is good news for vendors in the space, but will also require them to work harder on differentiating their offerings amidst mounting competition over the next year or so.

And, according to Siemers, a market leader has yet to emerge.

“I have not seen a tool out there yet that’s really our ideal of something that’s easily extensible, modular, and plays nice with any other piece of infrastructure that we’ve already built,” he said. Siemers declined to provide a timeline for when BMS plans to narrow down its current set of pathway informatics tools, “but I imagine that we will make some strategic choices,” he said.

GeneGo Sees Expanded Platform as Key

Since January, GeneGo of St. Joseph, Mich., has signed licensing agreements for its MetaCore and MetaBase pathway tools with Altana, RNAi Co., the Netherlands Organization for Applied Scientific Research, and GlaxoSmithKline. Today, the company announced that it has won a $100,000 Phase I Small Business Innovation Research grant from the National Cancer Institute to expand MetaCore to include pathways implicated in breast cancer.

Bryant said that expanding GeneGo’s platform will be one of the company’s biggest challenges over the next few years, but will also be a key to differentiating the firm in the marketplace.

“There’s so much more we need to do,” she said. The company’s pathways are currently derived primarily via microarray data, “but we have to bring in proteomics, metabolomics, SNPs, clinical data, phenotypic data — all of that is what systems biology really is,” she said, noting that GeneGo is the “only company” in the pathway informatics market that will support integration of data from multiple experimental platforms. GeneGo also plans to add more ADME/tox capabilities to its platform, she said.

Bryant said that GeneGo is meeting customer requests in two primary areas: for an increased ability to integrate with in-house and third-party data; and — primarily in the case of pharmaceutical customers — for installation of its platform behind the company firewall. Bryant said that this is partially due to security reasons, but stems more from pharmas’ desire to “integrate the system into their own in-house web platforms.”

GeneGo is growing quickly, Bryant said. When the company launched in early 2003, it had 20 employees. Now the firm employs 50 people, she said, “and we’re adding more.”

Bryant did not provide financial details for the company’s most recent agreements, nor did she disclose GeneGo’s annual revenues, but she said that sales remain strong. Based on current pilot studies for GeneGo’s products, she said, the company’s order pipeline is “very healthy,” and “should keep us busy for the next two years.”

Jubilant Competes on Depth, Price

Jubilant Biosys, meanwhile, has in the last month announced agreements for its PathArt database with Bayer HealthCare, GlaxoSmithKline, and the Research Center for Genomic Medicine at Japan’s Saitama Medical School.

Sreenivas Devidas, Jubilant’s vice president of business development and strategy, attributed the product’s popularity to its depth of content and low price compared to other commercial pathway databases.

Jubilant Biosys is based in Bangalore, India, and employs a total of 550 scientists who manually curate the company’s full suite of bio- and cheminformatics databases. Two years ago, Devidas said, Jubilant Biosys employed only 39 people. The business unit, a subsidiary of India’s Jubilant chemical conglomerate, is profitable, he said. Over the next year, he added, “I expect 100 percent renewal of all licenses.”

For PathArt, he said, 75 scientists are devoted to curating “all the pathways in the context of different diseases and physiologies.” Currently, PathArt covers 26 diseases and 15 physiologies.

Devidas said this focus on disease mechanisms is vital for researchers looking to explore their own experimental data within a particular biological context. “If they want a particular pathway in diabetes, [PathArt shows] how the pathway has been studied in the context of diabetes. The same pathway in colon cancer or something else would look very different, and the supporting data would look very different.”

The National Center for Toxicological Research at the US Food and Drug Administration recently completed a project to integrate PathArt with its ArrayTrack software platform, which FDA reviewers will use to study pharmacogenomics data voluntarily submitted by drug developers. Weida Tong, director of toxicology informatics at NCTR, said “the reason we looked into PathArt is because it is based on manually curated pathways. This is particularly valuable for us,” he said, because FDA reviewers will need to study industry-submitted data within a biological context.

Tong said that he evaluated several other commercial pathway tools, but found that their scope was too broad — or too research-oriented — for NCTR’s purposes. Nevertheless, he added, “We are not trying to limit ourselves to PathArt. We are continually looking for different products.”

PathArt is also integrated with other third-party analysis and visualization packages, such as DecisionSite, GeneSpring, Omniviz, and Pathway Assist, and is compatible with data from “all four major microarray vendors” — Affymetrix, Agilent, GE Healthcare’s Codelink platform, and Applied Biosystems. Like GeneGo’s Bryant, Devidas said that Jubilant’s customers prefer in-house installation of the database as opposed to accessing the information via a Web interface.

Finally, Devidas noted, Jubilant has priced its product competitively. While he declined to provide specific pricing information for the database, “we have kept it extremely affordable,” he said. The price is low enough, he noted, “that it doesn’t require special budget approval” for individual researchers looking to license the product.

Ingenuity Sees Broad Market Opportunity

Ingenuity Systems, founded in 1998, was one of the earliest players in the pathway informatics space, and can certainly claim first-mover advantage in the market: Nine of the top 10 pharmaceutical firms — and 15 of the top 20 — reside on its customer list.

But the company recognizes that competition is mounting and that the pressure is on to distinguish itself amid a growing field of rivals.

One way Ingenuity said it plans to retain its market advantage is by expanding the reach of its tools beyond their traditional home in bioinformatics departments, onto “every biologist’s desktop,” said Leschly, the CEO and president. Last week, the company made good on this strategy by expanding an existing agreement with Wyeth Pharmaceuticals to give more of the pharma’s researchers access to the company’s software.

Ingenuity was unable to disclose details of the expanded agreement, but Peter DiLaura, director of sales at the company, said that the deal is in line with broader trends that the company has identified in the marketplace.

“Over the course of the last two years, the pathways and systems biology space has gone from a relatively targeted, niche market … to where we’re now seeing relatively broad adoption of these tools,” DiLaura said. The company’s software has moved downstream, he said, beyond use in early discovery, target identification, and validation, to areas like biomarker identification, safety assessment, and pharmacogenomics.

“We’re now seeing the technology proliferate into the hands of the end-user biologists at the large pharmaceutical companies,” DiLaura said.

The Wyeth agreement follows on another expanded deal that Ingenuity signed in December with Merck that will give Merck’s entire research staff access to the company’s technology [BioInform 12-13-04].

Leschly said that the company’s primary strategy for staying competitive is “building great products.” Ingenuity will focus, he said, “on what we do, and do it well, and not worry too much about what the other vendors are doing.”

Industry observers say it’s still too early to estimate the potential market size for pathway informatics tools. IDC’s Life Science Insights conducted a return-on-investment study for Ingenuity in the summer, which determined that Ingenuity’s software could increase overall product productivity by around 10 percent and reduce failures by 33 percent, but the report didn’t attempt to pin a number on the market’s overall worth.

According to Leschly, this market is limited only by the number of biologists, “but how that translates into dollars, I haven’t even begun to think about.”

DiLaura added that there is still plenty of room for growth in the pathway informatics sector. “We’re still in the early stages of the development of this market,” he said. “Pharmaceutical companies who haven’t yet made their initial investments will begin to do so in 2005, and then the cycle will continue into 2006 and 2007, and then if customers continue to see the type of value that our earlier returns indicate, then I think we’ll be well on the way to establishing a really significant market.”

— BT

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