Insilicos, a three-person startup based in Seattle, has just won a $200,000 grant from the National Institutes of Health’s National Heart, Lung, and Blood Institute to commercialize statistics-based proteomics software it is co-developing with the Institute of Systems Biology.
The software, based on ISB’s Peptide Prophet package, is already freely available via SourceForge, but Insilicos president Erik Nilsson told ProteoMonitor’s sister publication, BioInform, that the company is confident that it can create a profitable business around the open source software.
“We think there’s a good economic opportunity for a for-profit company like us in conjunction with open-source tools,” he said.
“Everybody says, ‘Oh, you can’t make any money in bioinformatics.’ Well, people said you can’t make any money in search, either, and that obviously turned out to be wrong,” he noted, referring to Google’s recent string of economic successes. “Just because somebody hasn’t found a really attractive business model [in bioinformatics] doesn’t mean it isn’t out there.”
According to Nilsson, the life science-informatics market has yet to find a commercial model that fits the “complex and fairly unique” economic, scientific, and IP dynamics of biomedical research. “There are multiple sources of money, and those come with different expectations,” he said. “So you want a commercial strategy that matches that.”
Insilicos, which was founded in 2002, thinks it has found the right mix. Taking a page from instrumentation vendors like Applied Biosystems and Amersham (now GE Healthcare), which support academic tool development by in-licensing IP in exchange for access to pricey equipment, Nilsson said the field needs a similar model for software systems.
Researchers want reliable, documented, well-designed bioinformatics software that can run in a production setting, but not all of them can afford to pay for it. “For the people who really aren’t in a position to pay for those things, you just figure out how it is that they can contribute to the community in [a] way that’s valuable, so that everybody is being fairly treated. It’s like an ecosystem,” he said.
Under this model, nonprofit institutes like ISB can collaborate with Insilicos, sharing a portion of a grant and getting production-grade software in return. For its part, Insilicos plans to follow a Red Hat-like model, under which it will sell services and support for the open source tools.
In addition, Insilicos is developing its own software products for proteomics research based on pattern-recognition technology. The company was awarded another NIH grant last year worth $100,000 to develop pattern-recognition software to analyze data “produced by a powerful new capillary-electrophoresis proteomics instrument that measures proteins in single cells,” according to the grant abstract.
Nilsson declined to provide further details on the company’s pattern-recognition technology, citing its plans to file for patents on its methods.
Insilicos is also developing software to analyze metabolomics data under another $100,000 grant from the National Science Foundation.
So far, the company has released a beta version of a free viewer to handle large proteomic data sets (available at http://www.insilicos.com). The viewer can handle multiple mudPIT [Multidimensional Protein Identification Technology] experiments, Nilsson said. “You’re talking just gigabytes and gigabytes of data, so you end up with a matrix of maybe a couple of billion elements in it.”
Nilsson did not provide a timeline for the commercial launch of any of the tools Insilicos has under development, however.
In addition to the NIH and NSF grants, Insilicos relies on several consulting contracts to generate revenues. Nilsson said that the company is considering raising some financing in 2005.
“For a while there at the end of the nineties, people just raised a lot of money because they could. I always resisted that because I felt that if you take that money, you have to return the value on it,” he said. “But we feel that we’re at that point, now — that this year is going to be a good year for us to raise money, and really move things forward that way.”