GenTel BioSciences this week announced it has acquired GlaxoSmithKline’s protein chip business for an undisclosed amount in a deal aimed at accelerating the company’s goal of forging array-development deals with drug makers.
For privately owned GenTel, the acquisition, which closed around a month ago, provides a significant boost to its product portfolio and can also swell its revenue stream, said Alex Vodenlich, president and CEO of the Madison, Wisc.-based firm.
“In one fell swoop, it basically brings us to the best of service providers and protein-chip developers in the industry,” he told ProteoMonitor this week. “It would’ve taken us a number of years to really replicate this type of platform.
“When we now actively engage large pharma companies and biotech companies for developing custom arrays for them, we now have the ability to produce the best data in the industry, as well as validate with vigorous validation standards, and then we have the capacity to screen thousands of samples, where before this we couldn’t,” he said.
GenTel has collaborations with several “large biotech firms” to build arrays and eventually to screen samples, Vodenlich said, but none with large pharma.
“So we really upgraded the organization. We had a solid foundation, but this accelerates the business,” he said.
Within the next three to six months, he added, GenTel will be approaching large drug manufacturers to discuss possible deals.
In its six-year history, GenTel has not made a profit, but the acquisition of the protein chip platform could give the company greater credibility it needs to land business with pharma companies, “which then really brings us to profitability instantaneously.”
GSK, the world’s third-largest drug maker, measured by market capitalization, did not respond to requests for comment.
Robert Negm, GenTel’s vice president of business development, told ProteoMonitor sister publication BioArray News that the acquisition was facilitated through GenTel’s role as a surface chemistry and slide provider for GSK.
The companies grew closer in November 2006 when Anna Astriab Fisher, a principal scientist in GSK’s technology-development department, joined GenTel as vice president of assay development.
“We have gained all of these multiplex, validated immunoassays that were done on our surface chemistry,” Negm said. “That’s actually very important because they developed these tests on our slides. That gave us an advantage [in acquiring the assets] when [GSK] decided to liquidate that department,” he said.
The GSK buy increased GenTel’s headcount to 17 from eight just as the company moves into a “much larger facility” in Madison, Negm said. Vodenlich said the company is in the process of hiring more workers.
The company has also opened a laboratory in Research Triangle Park, NC, where the GSK group was based.
“So we just went through a hyper-growth phase. We now have two facilities in two parts of the country and we have all this new equipment, personnel, and technology,” Negm said.
GenTel has traditionally been a protein-array slide vendor. However, over the past year, the firm has recruited R&D talent; developed condition-specific assays, such as its CoagChip for the study of blood clots; and rechristened itself GenTel Biosciences from GenTel Biosurfaces to signal its change in strategy from being a tool vendor to a research assay provider.
GenTel receives GSK’s system of automation and robotic equipment, statistical and reporting tools, software tools, and prevalidated arrays including arrays in the areas of cytokines and metabolic diseases, Vodenlich said.
“When we now actively engage large pharma companies and biotech companies for developing custom arrays for them, we now have the ability to produce the best data in the industry as well as validate with vigorous validation standards, and then we have the capacity to screen thousands of samples, where before this we couldn’t.”
According to Negm, GenTel has acquired four protein-array chips that it will offer through its services business: a chip for human cytokines, a chip for mouse cytokines, a metabolic chip, and a matrix metalloproteinase chip.
The arrays complement several chips under development at GenTel, including the CoagChip for studying coagulation, an allergy chip for diagnosing respiratory allergies, and a high-density antibody array containing 50 cancer serum markers.
GSK’s motivation to sell its business is unclear, but a former GSK scientist, now a consultant, said that it was probably GSK’s intention all along to either sell off or license the platform because it didn’t fit the company’s main business as a drug developer. GSK is the world’s third-largest drug maker, based on market capitalization.
Paul Domanico, the former vice president of technology development for GSK’s US R&D shop, oversaw the creation of the protein chip platform and said that the platform was created in 2000 to fill a gap in GSK’s R&D program that could not be addressed by other parties.
“My group’s mission was to develop step-change platforms. By definition, these kinds of capabilities are not available on the market, or the marketed products fall quite short of GSK’s needs,” Domanico said in an e-mail to Bioarray News this week.
“For almost every technology my department created, the exit strategy was either to license it to another company or to spin it out into a new company,” he said.
Because GSK did not make the platform available commercially, the company did not generate any revenues from it, he told ProteoMonitor. As a whole, Domanico estimated the market for such technologies to be at least $50 million.
Domanico also speculated that the platform GenTel acquired could have “significant commercial value” for other pharmaceutical companies because it was developed to fill a step in GSK’s R&D processes.
“If I have done my job right and identified a significant capability gap in GSK’s armament, then this gap most likely existed at every major pharmaceutical company. So, this platform would have significant commercial value,” he wrote.
He said that possession of the platform would give GenTel a long-term advantage in the market, whereas it created only a short-term advantage for GSK.
“I would bet you that because of this technology, GenTel has the most complete [protein chip array] platform now,” Domanico said.
— Justine Petrone is editor of ProteoMonitor sister publication BioArray News and contributed to this article.