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Picking up Acero s Development Team, Xteric Snags P&G for First Bio-IT Deal

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Xteric, a Cleveland-based IT services firm, last week announced that it has signed an agreement with Procter & Gamble Pharmaceuticals to co-develop an integration platform for biomedical data, along with a suite of drug discovery research applications.

The agreement is the first life science deal for Xteric, which acquired informatics firm Acero's development team last November.

Acero has a complicated history. The company marketed the Genomics Knowledge Platform, a data-integration system originally developed by Incyte Genomics, which Incyte sold to the middleware developer (called Secant Technologies at the time) in 2001 [BioInform 07-16-01].

A condition of the sale was that Incyte's LifeSeq database customers would provide an immediate sales channel for the technology [BioInform 03-18-02].

But by the fall of that year, Acero began laying off employees as Incyte refocused its business model on drug discovery and away from its database business. At the time, several Acero employees wound up at Xteric, a web, e-commerce, and IT services provider, including Bradley Wertz, formerly vice president of services at Acero and now president of Xteric.

Based on that history, "Xteric and its resources had a significant relationship with Acero and its resources and P&G as well," Wertz said, "So it was a good fit for everybody … to put this deal together, have Xteric step in, take on the development team and some other assets associated with the company, and try and carry this business model forward."

Xteric employs "north of 50" people, Wertz said, and recently acquired six additional employees from Acero to create a business unit called Xteric Research that is focused on life science informatics. Wertz declined to provide details on exactly what technology assets the company picked up from Acero.

Calls to David Snyder, formerly CEO and chairman of Acero and now chairman and CEO of technology advisory firm Attevo, were not returned before BioInform's deadline.

Wertz described Xteric as a recovering dot-com victim that was down to three employees just before he joined the firm. Now, he said, "we have a person or two joining us every week, and we're hopeful that that type of thing continues."

The company is hoping it can carry out a similar turnaround for the former Acero business.

Xteric Research is currently "performing services" for three of Acero's ex-customers, Wertz said, adding that the company is "actively pursuing additional deals" that are in "various stages of progress."

Acero's technology "is still very viable and has significant opportunity, especially when released from certain parameters and certain aspects of the business model that Acero was beholden to," Wertz said.

While he hesitated to disclose much detail about those "parameters," he said that companies like Incyte and other bioinformatics providers had a tendency to tell customers "to use this technology we've created exactly as we tell you to … and Acero was unfortunately a culprit in that game, as opposed to taking the technology and adapting it to the customer's needs on a customer-by-customer basis."

The bioinformatics market has entered a "second generation," Wertz said. While "everybody has made lots of mistakes … I don't believe anybody will tell you that there's not an opportunity there."

He said that further details of the company's work with Procter & Gamble and other customers would be provided in the next few months.

— BT

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