In the wake of a three-year distribution agreement with Stratagene that landed in arbitration before it expired at the end of 2005, Ariadne Genomics has decided to strike out on its own when it comes to the US market for pathway informatics tools.
"We are finally taking our fate in our own hands," Ilya Mazo, founder and CEO of Ariadne, told BioInform this week. Mazo said that the company is building its own sales and marketing team. While the company still has several international distribution partners, "we have no more distributors here in the United States," he said. "We sell it directly."
Mazo said that the company next week expects to launch a new version of its flagship PathwayStudio software, which Stratagene sold under the name of PathwayAssist. The release offers several new features, including a simulation module and an expanded database that includes more than 1,000 pre-compiled pathway maps.
Ariadne also plans to launch a new product, called MedScan Reader, next week. Built upon the company's MedScan text-mining technology, MedScan Reader serves as "an intelligent semantic web-enabled browser," Mazo said.
While the MedScan natural language processing technology has traditionally been used to extract functional relationships between proteins and other biomolecules in order to reconstruct pathways, Mazo said that he expects the new product to be of interest "not only to the pathway community, but to the much broader community — effectively anyone who needs to read through difficult literature."
"None of the distributors was really interested in our whole product offering. There was a lot of interest in pathway products, but we have a second part of our business that is based around MedScan."
The company's expanding product line was one reason Ariadne opted to build its own marketing team, Mazo said.
As its agreement with Stratagene neared completion, Mazo said that the company had "a number of offers" from other distributors, "and some of those offers were very lucrative."
Nevertheless, he noted, "none of the distributors was really interested in our whole product offering. There was a lot of interest in pathway products, but we have a second part of our business that is based around MedScan, and the whole linguistic area, and we're growing this product line as well. And to have a distributor for half of your offerings and to sell the rest yourself just makes no sense."
The vagaries of the pathway informatics market also played a role. "It's very difficult for me now to predict where this whole systems biology/pathway analysis market is going to go in the next few years," Mazo said. "We can expect a huge boom, driven by all the new chip technologies … or we can still see a very slow kind of growth."
Rather than lock into a distribution contract, "we wanted to attain a certain flexibility in how we react to all these market changes," Mazo said. "And the only way to do that is to have an internal sales force."
A Quickly Crowding Marketplace
Ariadne now faces competition from its former partner, as well as a number of other players in the rapidly crowding pathway informatics market.
Stratagene, which said that it would not renew its distribution agreement with Ariadne last month [BioInform 12-12-05], no longer lists PathwayAssist among the software products listed on its website. It does offer PathwayArchitect, a pathway software tool it developed in collaboration with Strand Life Sciences, along with a tutorial on importing pathways from PathwayAssist to PathwayArchitect.
"Imitation is the best form of flattery," Mazo said. "We're always happy to have fair competition, and I think it's going to be good for everyone."
Mazo acknowledged that Ariadne also faces "strong" competition from other companies, such as Ingenuity, GeneGo, and Jubilant Biosys, and admitted that "this space is getting crowded."
Nevertheless, he said, "I think we've proven on many occasions that we can be innovators in this field, and I believe that we will stay this way."
Whether the company's relatively small sales and marketing team — which currently stands at four people with a handful of new hires planned — can compete with larger and more experienced firms remains to be seen, but according to Mazo, the sales team may not have to spend much time getting the word out.
"We've been swamped" with queries from existing PathwayAssist users, he said. "Over the last few days, we've been swamped with calls and e-mails. So people know who we are, and we will make sure that those who don't will learn about Ariadne."
Mazo was confident that Ariadne's sales team will be more than able to match the performance of Stratagene, which claimed in court documents that it generated revenues of $1 million annually from PathwayAssist [BioInform 10-24-05].
"I think we'll do double that," he said, adding that the company's share from the Stratagene distribution agreement was "less than a quarter of our total revenue" in 2005.
— Bernadette Toner ([email protected])