A little over a month after acquiring CambridgeSoft and ArtusLabs, PerkinElmer this week acquired privately held bioinformatics firm Geospiza to add cloud computing and sequence analysis capabilities to its informatics offerings.
Financial details of the transaction were not disclosed.
"We see informatics as a real opportunity," PerkinElmer CEO Robert Friel said during the company's first-quarter conference call.
He noted that the three recent informatics acquisitions are expected to increase the company's recurring revenue and estimated that they would generate $75 million, or approximately 4 percent of the company's total revenues, for the full year.
Friel noted that CambridgeSoft and Artuslabs, which the company acquired in March (BI 03/25/2011), added an electronic notebook and image analysis to PerkinElmer's informatics portfolio.
Now, "Geospiza brings us cloud computing and some real good capabilities around sequencing, which is complementary to our sequencing service," he said.
PE's sequencing business, in operation since January, provides human and mouse exome-resequencing services on the Illumina HiSeq next-generation platform (BI 01/28/2011).
The company was already using Geospiza's GeneSifter Lab Edition and GeneSifter Analysis Edition software for the service, so buying the company was a "logical extension," Rob Arnold, Geospiza president, told BioInform.
Richard Begley, PerkinElmer's president of emerging technologies, added that Geospiza's product portfolio is "a strong addition" to the company's bioinformatics capabilities and, along with existing diagnostic software, provides a "strong platform for offerings in nucleic acid testing."
Begley told BioInform that Geospiza's software will be available as part of PE's sequencing-services business to provide a "broader offering" to customers who require both next-generation sequencing and analysis.
However, the company also intends to preserve Geospiza's existing services for customers who are using Sanger sequencing, DNA chips, and other genomic analysis tools.
"Geospiza deals with information that comes from any sequencer on the market and the last thing we want to do is disturb that," said Begley. "What we would like to do is have the two programs run in parallel, and where they have opportunities to cooperatively sell, they will."
Geospiza's Arnold said the company has worked "systematically" to identify new clients for its software suites, which include GeneSifter Analysis Edition, a cloud-based data-analysis product for microarray and next-gen sequencing data, and the lab-management system GeneSifter Lab Edition.
He noted, however, that the relatively small firm does not have the same sort of marketing channels as a life-science tools giant like PerkinElmer.
"For us, being able to access more and more customers was really the stage of the business that we are at," he said. "We had to look at certain options. Do we raise additional capital to expand sales and marketing, or do we partner up with an organization that already has a global infrastructure in place?"
Ultimately, he said, "the PerkinElmer opportunity was just fantastic for us."
A Growing Portfolio
During PE's earnings call, Friel said the company has identified several "drivers" that signal an opportunity in the informatics market.
First of all, he said, consolidation in the biotech and pharmaceutical sector "is requiring our customers to have better connection between the scientific efforts — whether it’s the outsourcing of R&D, the CROs that are requiring the ability to share information seamlessly, whether it's a focus on productivity, or whether it's just a fact that the instrumentations are continuing to generate more and more information."
In addition, "there's a real need to be able to search, analyze, store, and share that information," he noted. "So we think, consistent with what we've done with our service offering, there's a huge opportunity to help our customers sort through this need to have a much better informatics platform."
Now PE is mulling how to integrate the three new software firms it acquired over the past two months.
Friel said during the call that the ArtusLabs and CambridgeSoft product lines will be integrated "because I think there are some real synergies between those two." Geospiza, meantime, "will be more focused on the DNA-sequencing business."
Over time, however, "we'll look at a software strategy across PerkinElmer," Friel said. He noted that PE already has a range of informatics products, including the Acapella, Columbus, and Volocity image analysis products; SpectralWare array-analysis software; LabWorks LIMS; and other tools.
"We're looking across all of our capabilities in PerkinElmer," he said. "We'll ultimately probably have an integrated software business, but, I would say, that's down the road."
As part of PE, Geospiza will continue normal operations out of its offices in Seattle, Begley said. PE plans to hire additional sales and marketing staff to support its new analysis business, but there are no other planned staff changes.
PerkinElmer expects the companies to be integrated within a few months and plans to start cooperatively marketing "shortly."
Public and Private Cloud
Begley told BioInform that PE plans to use the Geospiza software "as a starting point for bringing together a lot of the software that exists within our variety of human health businesses so that we can ultimately address DNA, proteins and metabolomic information, and cellular imaging information all in a more integrated system."
Geospiza also brings experience working with a public cloud infrastructure, Begley said, which complements the private cloud PE launched as part of its sequencing business.
Having two clouds to choose from will allow PE to provide secure cloud access more generally to its customers via Geospiza's cloud, as well as use the firm's private cloud to cater to the needs of groups with more sensitive data, such as pharmaceutical companies.
Geospiza's cloud offerings provide cores on demand, allowing customers to scale as needed, Arnold said, though he declined to disclose the company's cloud provider. PE's in-house cloud, provided by HP, provides compute resources and access to 100 customers per week, Begley said.
Its still early days for PE's sequencing business, which generated less than $1 million in revenues in the first quarter, he said. However, "we're getting some good traction with our customers ... [and] we see it as an exciting opportunity."
Furthermore, PE is looking to develop new products for sequence data analysis and to tackle new sequencing prospects.
The company currently offers services in targeted resequencing but plans to peddle microbial sequencing and is contemplating "how and when" to step into the whole-genome sequencing arena, Begley said.
On the software side, Arnold said, Geospiza will continue to add new support for its laboratory-management system, expand the DNA-analysis capabilities of its software, and support new instruments and data types.
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