By Malorye A. Branca
May 7, 2002 | LION bioscience AG’s recent deal with Incyte Genomics Inc. raises a challenge to startup Acero, which has a strikingly similar arrangement with Incyte.
Through the new deal, announced April 1, LION will provide a customized, Sequence Retrieval System (SRS)-based interface for Incyte’s LifeSeq Foundation customers. The data integration interface will be available as a portal or an installed version.
Acero also has a deal with Incyte to provide an installed interface for LifeSeq Foundation clients. While there are important differences between the two products, they fundamentally address the same goal: the ability to pull together information from diverse genomic databases.
Most of the world’s top 20 pharmaceutical companies subscribe to LifeSeq Gold genomic databases. Incyte is now moving those clients over to the newer Foundation version. The company recently turned its attention from bioinformatics to drug discovery.
Acero (formerly Secant Technologies) was partially spun out of Incyte. “We have a deep and wide relationship with Incyte,” says Acero president Jim Holt. Acero’s new distributed software platform evolved from Incyte’s own work on data integration.
During an interview in mid-March, when Acero’s Genomics Knowledge Platform (GKP) was launched, Holt described Acero’s “special” deal with Incyte to provide the GKP to every LifeSeq Foundation subscriber for one year. “That’s more than 20 companies and more than 50 sites,” Holt said. Presently, Acero receives no payment for these licenses. The aim is to transition these users into paying clients next year, at approximately $500,000 per installation.
But since the LION-Incyte deal was announced, Acero’s deal doesn’t seem quite so special anymore.
“They are very similar deals,” says Paul Chirico of investor relations at Incyte. “We never meant to hurt Acero, and in the short term, it shouldn’t harm them. But in the long term, I guess they [LION and Acero] could be competitors.” The primary concern for Incyte, Chirico says, “is to make our content more broadly available. We looked across the marketplace and it made sense to offer SRS as well.”
Neither interface offers its product’s full features; clients need to upgrade for those.
For LION, this is an important step toward making SRS the industry standard for data integration. The SRS system is already licensed to more than 60 companies and is available free for academic use.
“We work with Celera internally, and we have announced working with Derwent,” says Rudy Potenzone, president and CEO of LION’s U.S. subsidiary. “There is a growing interest in getting the key databases together under one integration system.” Clearly, LION hopes SRS will be the choice.
Incyte is paying LION an undisclosed annual license fee and royalties for the portal for three years. Incyte will also pay a fee on intranet installations of SRS. “Some of these users are already clients, but this deal could stimulate more people to use SRS,” Potenzone says, “and as we add more content, they will get to see it.”
The LION-Incyte deal has caused “a lot of confusion,” admits Acero’s Holt. His company is just launching the GKP and seeking to secure its first customers. “We knew about the LION deal,” Holt says. “If they [Incyte] want their customers to have options, that is smart business, and we have to respect that.” Acero has about 10 other partnerships and about a half dozen clients in the works, Holt says.
“There is room for both us and SRS in the Incyte customer base,” Holt says. “The products are fundamentally different, and customers will recognize the differences.”
That assertion is backed by Lisa Kenney, Acero’s vice president of marketing. “I was at Incyte in the early days, and we were going around talking to customers and seeing what they needed,” she says. “One of the things we looked at was SRS, and it wasn’t a complete solution.”
The key question is whether it is good enough.
Both tools allow researchers to query many and various types of databases. Acero’s solution uses semantic integration, while SRS is a database federation technology.
“If it really works, semantic integration combines information in a way that reflects what the data mean,” bioinformatics consultant Nat Goodman says. “For example, this type of software could go out, bring together flight information from multiple travel Web sites, then pick out the flights that are at similar times and give you the different prices just for those.”
An integrated query system like SRS doesn’t provide that kind of context, Goodman says. “SRS makes it possible to access related information; it doesn’t try to combine it in a meaningful way.”
More sophisticated integration is one of the most commonly cited needs in genomics. “It’s the juggernaut,” says Tim Littlejohn, CEO of Biolateral.
But it has been an elusive goal. “It’s incredibly difficult, and no one has done it well enough so far,” Goodman says. If Acero, or anyone, gets it right, “They are giving the customers what they want,” he says.
Meanwhile, SRS is well established, highly regarded, and. “an excellent compromise,” Goodman says.
But genomics is changing rapidly and creating new demands. For example, genomic databases are more likely to include clinical data, such as details about samples for gene expression analysis experiments. This trend raises the bar for those designing integration systems. “For SRS, the question will be how good is it for managing clinical information,” Littlejohn says.
It’s too early to tell whether Acero or LION will benefit most from their deals with Incyte.
“The trick will be to see what increases the productivity of the life scientists,” Littlejohn says. “The decision about what these subscribers end up buying will be made at a high level, but it will be driven by the IT departments, who have to do the work to modify it.”