Part two of a two-part series. To read part one, which describes Sophion and Flyion's technology, click here.
Molecular Devices has two primary products based on patch clamping for measuring ion channel activity. The first is the PatchXpress 7000A, which the company took on when it acquired Axon Instruments in mid-2004. PatchXpress is Molecular Devices' lower-throughput automated patch-clamp instrument, although at 16 channels, it is still among the higher-throughput traditional patch-clamp readers on the market.
Its second product is IonWorks, and Molecular Devices in February launched its latest version, IonWorks Quattro, which has much higher throughput — and some argue lower data quality — than any traditional patch-clamp machine. This is due to its use of a population patch clamp technique, in which whole cell populations are measured for ion channel activity rather than individual cells.
It is no secret that Molecular Devices' main target is the higher throughput, pharma-based, drug-discovery industry because the company has rolled out several new products or upgrades in the past two years with great fanfare for such applications.
Molecular Devices' developments have not gone unnoticed in the industry, which sense a weak spot in the company's strategy. In fact, Sophion and Flyion, two privately held companies, have observed that Molecular Devices has put a lot of effort into marketing Ion Works Quattro, possibly at the expense of PatchXpress, and see it as an opportunity.
"We hope so, because our instrument will obviously never be in the range of a primary screening instrument," Flyion's Fejtl said. "This is obviously the market niche that Molecular Devices is focusing on more with PatchXpress.
"From a business point of view, it makes sense that MDCC is focusing on IonWorks Quattro because they make the consumable in that case, so they are making more money."
"On the other hand, if you think of how [few] big pharma companies are out there for primary screening, our belief is that secondary screening and the CRO [industry] is a bigger market share," he added.
Sophion's Mathes agrees. "There has been an opportunity there, and we're actually selling a lot of systems because people realize that Molecular Devices isn't focusing as much on PatchXpress. That's one of the reasons I switched to Sophion — I wanted to see that technology move ahead.
"From a business point of view, it makes sense that MDCC is focusing on IonWorks Quattro because they make the consumable in that case, so they are making more money," Mathes added. "With PatchXpress, they buy the consumable from Aviva Biosciences, and therefore share the profit with them." Mathes was referring to the fact that PatchXpress has used special planar electrode chips manufactured by Aviva Biosciences since the Molecular Devices struck a deal with the firm in June 2002.
Mathes also expressed that the market for patch clamp in high-throughput applications such as primary drug screening may not be as large as Molecular Devices is banking on.
"I actually think the market is bigger with high-quality gigaseal recordings," Mathes said. "People want to be able to replicate what they do with conventional patch-clamp because they trust the data more.
"I'm skeptical that patch clamp will ever be a true primary assay, because there's a limitation on cost," he added. "Something like FLIPR [Molecular Devices' calcium flux screener] costs about twenty cents per well, and that's just a multi-well plate with cells on the bottom. As soon as you put a hole in the bottom, and do suction and patch clamp, it's going to be much more, and no one can afford to do that with millions of compounds."
Of course, Sophion and Flyion aren't the only players in this space, but they are the only ones with such direct variations on traditional automated patch clamping. Another notable name is Swedish biotech Cellectricon, which is marketing a microfluidics-based approach to patch-clamping; while German biotech Nanion, whose Port-A-Patch chip-based technology has recently gained popularity and adds to a rapidly crowding market.
But Sophion's Mathes and Flyion's Fejtl seem to think that the potential market is large enough — even larger than HTStec claims — to support all players. Mathes alluded to market research that sees the patch-clamp market growing to $325 million by 2010. Meanwhile, Fejtl said that some market research claims "several hundred" patch clamp instruments will be sold in the next few years, and that Flyion's goal is to eventually snare 20 or 30 percent of that market.
"If you think of how [few] big pharma companies are out there for primary screening, our belief is that secondary screening and the CRO [industry] is a bigger market share."
Sophion and Flyion, being primarily based in Europe, also have their work cut out for them as it pertains to penetrating the sizable US market.
Sophion, which has been around longer, is not surprisingly ahead of this game, as the Danish firm established its US subsidiary in December 2004. The subsidiary last month announced that it had moved into the New Jersey Technology Center in North Brunswick, where, according to a statement from the company, it is "30 minutes or less" from "several of its existing and soon-to-be customers."
According to Mathes, who was Sophion's first US employee, "we're doing everything here except manufacturing. So we're doing marketing, assays, development, and sales. Our big focus now is to get the 48-channel system to market on our own."
Mathes also said that about half of its customers are in the US and half in Europe, with a few in Japan, as well. He declined to provide a specific number of units sold or to identify customers due to confidentiality reasons. QPatch 16 sells for a little under $400,000.
Flyion, on the other hand, has yet to establish a marketing presence in the US, but will begin to do so at the Society for Neuroscience annual meeting being held Nov. 12-16 in Washington, DC.
"Geographically we have not really been hitting the US, but we will start that more heavily next year," Fejtl said. He added that Flyion has sold "16 or 17" units so far, with sales to Italy, Switzerland, Germany, Japan, and Korea. He said "China [is] expected by the end of the year, and as of [last week], we made a sale into France."
Flyion has also placed two instruments in the US: one each in California and Hawaii. Most of these sales, he added, have been at pharmaceutical companies and CROs. Flyion has only publicly disclosed one customer, Orion Pharma of Finland, which bought a Flyscreen in August.
Flyscreen is Flyion's only money-maker. Retailing for about €150,000 ($181,000) for the 3-channel version and €240,000 for a six-channel version, the instrument has likely generated between €2.4 million and €4 million in revenues since it was put on the market in 2003.
Furthermore, Flyion raised €1.2 million in a second round of financing in February, money that Fejtl said has helped further develop Flyscreen, particularly a new FlipTip version that will allow ligand-activated channel measurements.
— Ben Butkus ([email protected])