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Fluidigm Continues Push into Proteomics Despite Soft Q1 CyTOF Sales

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NEW YORK (GenomeWeb) – Despite early softness in its recently acquired CyTOF business, Fluidigm officials this week reiterated the growing importance of proteomics in the firm's overall strategy.

Fluidigm acquired the CyTOF instrumentation in January through its $207.5 million purchase of DVS Sciences, the developer of the technology. The company had previously said it expected the product to contribute between $33 million and $35 million in revenues this year, including $3.8 million recognized by DVS prior to close of the acquisition. On a conference call this week discussing Fluidigm's Q1 results, however, President and CEO Gajus Worthington said that the company had revised that estimate downward to between $24 million and $26 million.

"As we took control of the sales pipe and dealt directly with future customers, we learned that the sales opportunities we inherited from DVS Sciences were not sufficiently nurtured to support its near-term revenue targets," Worthington said, explaining the revision. "There wasn’t enough attention placed on advancing opportunities in the sales pipeline to earlier stages of their development, as opposed to closing more eminent ones."

Worthington said he expected that Fluidigm's more developed sales processes would remedy this issue, noting that the company anticipated that "the first half of 2014 will be more challenged from a revenue and growth perspective with bookings growth resuming in the second half."

Fluidigm reported $6.6 million in Q1 revenue from the CyTOF business, roughly $2.8 million of which was recognized after the close of the DVS deal. At the end of the quarter, the total install base for the instrument stood at 77 systems, the company said. At the time of the acquisition, DVS had placed roughly 70 CyTOF systems. The instruments sell for around $620,000 each.

The CyTOF technology combines capabilities of flow cytometry and atomic mass spectrometry, allowing it to measure large numbers of proteins in single cells with high throughput. Atomic mass spectrometry detects proteins using antibodies linked to stable isotopes of elements, which can then be read with high resolution via time-of-flight mass spectrometry. The platform is able to simultaneously quantify as many as 100 protein biomarkers in individual cells at a rate of roughly 1,000 cells per second.

Regarding the quarter's slower than anticipated CyTOF sales, Fluidigm Chief Financial Officer Vikram Jog said on the earning call this week that while he believed the sales pipeline for the instrument was large and "very healthy," the company needed to "do more work in moving people along in their buying process." By this, he said, he meant increased energy put into activities like product demonstrations and technical reviews and, in some cases, helping customers determine how to get funding to purchase the device.

Worthington added that Fluidigm plans to "invest heavily" in technical support for the system, suggesting that this would help current users more quickly generate data that could then be used to drive additional sales.

Shaun Rodriguez, an analyst with Cowen and Company, noted on the call, however, that in his contact with CyTOF customers a number had cited a lack of certain features, specifically pre-optimized assays and back-end analytical tools for use with the system, as potential limiting factors in terms of purchase and utilization.

Worthington said that the company has available several hundred "off the shelf" proteins labeled and validated for use with the CyTOF. However, he added, "that number needs to go up quite a bit."

"In traditional proteomics, he said, "generally speaking, there are [assay] menus that are available that are in the thousands [of proteins.] So a big part of our effort is expanding that menu and expanding the number of parameters that can be analyzed."

Back-end informatics tools are also a particular challenge given the vast quantity of data generated by the CyTOF system.

The datasets that CyTOF users "are gathering are quite large … you are talking about sometimes 30, 40, or 50 dimensions," Worthington said. "So, how you visualize that, how you analyze it, how you pick up trends in the data, that is challenging."

"There are a number of different organizations and labs that are tacking this problem," he said, noting that Fluidigm planned both to pursue its own internal solutions as well as partnerships with outside groups doing work in this area.

One of the primary developers of such software has been Stanford University researcher Garry Nolan, an early CyTOF user and DVS shareholder. In 2012, DVS entered an agreement with Cytobank, a flow cytometry informatics firm spun out of Nolan's lab, to develop a cloud-based informatics platform for managing and analyzing CyTOF data. Fluidigm currently offers the platform to CyTOF users under the name Fluidigm Cytobank.

Fluidigm's purchase of DVS and the CyTOF technology is part of the company's ongoing move into proteomics, a shift driven by its customers who are "moving from a focus on genomics to a need for broader analysis, particularly protein expression," Worthington said on the call.

"We see more and more evidence to this effect as researchers who are discovering genomic signatures need a means to validate their impact on the proteomics of proteins in the cell," he said.

Indeed, in an interview with ProteoMonitor following the announcement of the acquisition, Worthington said that Fluidigm first became aware of DVS through conversations with customers who used both companies' instruments, adding that "at an institutional level, that overlap was probably about 80 percent."

Contact with these customers made it "abundantly clear that to really do single-cell biology it is a requirement to have genomic and protein analysis," he said, calling the DVS acquisition "just the beginning of what our ambitions are with respect to this field."

In addition to the DVS acquisition, Fluidigm last July signed a co-marketing deal with Olink Biosciences that combined its BioMark HD real-time PCR platform with Olink's Proseek Mulitplex protein assays to create a high-throughput proteomics platform.

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