By John Russell
January 22, 2009 | Predictive Biomedicine conducted an informal survey of technology providers to get their perspectives on running their companies in difficult times; on what their customers are seeking, and on whether the downturn would be a net plus or minus in prompting adoption of advanced computational tools. Some paint optimistic pictures while others say soberly the economic turmoil will test their survival skills.
We posed five broad questions:
1. What effect is the downturn having and how were you dealing with it?
2. What effect is the downturn having on your customers and how are they dealing it?
3. What technology advances and initiatives are you planning during the next 12 months?
4. What do customers want most in these difficult times?
5. Will the downturn be a net positive or negative for adoption of ‘predictive technologies?
Most respondents make at least a small sales pitch - who can blame them – but there’s a good deal of insight provided as well. Nine companies responded including Microsoft, Ingenuity Systems, Symyx, GeneGo, Ariadne Genomics, IO Informatics, Physiomics, Genedata, and Strategic Medicine. Their answers, in no particular order, answers presented below; little editing was done though a few responses were trimmed.
Microsoft - Mike Naimoli, industry solutions director for Microsoft’s U.S. Health & Life Sciences Group
1. Dealing with the downturn? Like all companies in today’s economy, Microsoft is looking for ways to cut costs and reduce risks. While we’re confronting the same issues as everyone else - tighter credit, reduced business activity, and slower consumer spending – at Microsoft, we see that challenges can often create opportunities. Like many business leaders who maintain a long-term perspective even as they take short-term steps to adjust to the current economic realities, Microsoft is taking the opportunity to sharpen our organization’s focus on the right solutions to help our customers and ensure that we have the right resources working to achieve these objectives. For example, our internal IT department moved 25 percent of its servers into a virtualized environment during 2007 and will move another 25 percent this year. So far, the resulting savings top $10 million and today, it takes just four people to manage the group’s 3,500 servers.
2. Customers’ challenges? One of Microsoft’s biggest concerns is how the economy is affecting our customers. The primary issue right now for our customers is replacing revenue for those products that are coming off of patent protection. For non-financial companies, the impact of the recent financial troubles to hit Wall Street has primarily been the sudden loss of access to credit, as well as a diminishment of capital reserves to fund R&D. As a result, smaller biotech companies that rely on venture capitalists for funding are seeing this money tighten up, and must find cost-effective ways to develop new drugs. That’s where Microsoft technology can come in. For example, solutions like high-performance computing (HPC) can run scientific experiments 600 percent faster, saving the need to conduct live experiments or reducing expensive time in the lab. Results that used to take several days can now be ready in hours. High-performance computing gives researchers more time to analyze their work and identify research directions that will lead to direct results.
3. What technology advances and initiatives does Microsoft plan for the next 12 months? We are continuing to work with our customers on visualization solutions that allow scientists to seamlessly collaborate, annotate and build off each other’s work, no matter where they are working in the world. Scientific innovation tools can also provide lab equipment integration that works seamlessly with their documents, giving researchers even more meaningful data to work with. This, along with databases that are easily accessed, means researchers can spend less time replicating results that already exist and more time doing new work in the lab. It also allows them to avoid dead ends that their colleagues have faced.
4. What do customers want most from your company? Our customers are looking for cost savings wherever they can, but they want solutions that the workforce intuitively understands, with as little training as possible. One area our customers are especially concerned about is sales and marketing, where they have less staff in the field than before. As such, pharma companies need technology that allows a reduced sales force to get the same amount of work done with less manpower. As a vendor, they look to us to develop IT solutions that help their staff without burdening them with a whole new computer language. Our business intelligence solutions, for example, helps them cut back on paperwork and lets the workforce use all sorts of devices in the office and in the field that they are already familiar with.
5. Will the downturn be a net positive or negative on ‘predictive technology’ adoption? We certainly see this area growing. As I mentioned before, HPC solutions can help in the field of predictive technologies. The more work that technology can do for scientists to point them in the right direction for meaningful results, the more drugs they will have in the all-important pipeline. Our solutions can now integrate data from multiple disparate sources, which gives scientists a much more complete look at their research. Right now, a drug costs about one billion dollars and 20 years to develop. Any technology that gives pharmaceutical companies an advantage here will be invaluable in the future.
IO Informatics - Robert Stanley, President & CEO
1. Dealing with the downturn? Last year was our best year and we already see activity picking up in 2009, so we have not seen any negative impact as of yet. If we do, we feel it will be in the area of time delays, i.e. agreements will not be cancelled but rather postponed due to uncertainties or remnants of reorganizations from 2008. Looking back at 2008, several customers and prospects experienced major re-orgs that may have been indicators of the upcoming recession. These extended our sales cycles for the prospective accounts, but we project to close several of these early this year. As with all companies, we have both goal and conservative plans to follow depending on how things go. They don’t involve cutting back or lay-offs but rather, in the case of a conservative outcome, slowing our hiring. In regard to business loans/lines of credit and the current tightening of these in the marketplace, we are very fortunate to have investors that are strongly behind us and in the game for the long run. Tight lending scenarios should not unduly impact IO Informatics in 2009 even if short term cash becomes an issue.
2. Customers’ challenges? I’ve heard many different takes on this. Several of our larger customers are bigger Pharma who have cash reserves. This is not to say they are loosely spending, but rather are making smart purchase decisions. This is part and parcel of the pre-recession mindset of the Pharmaceutical research industry where they want to ensure they get the best return for their research dollar. Core informatics coupled with advanced knowledge building and application is one way they can optimize their investment. For smaller research labs and centers of excellence, grant driven collaborations that benefit by our informatics platform may not be negatively affected – it is difficult to project at this time. For 2009 at least, many of these customers are spending grant money won in 2008. My sense is that customer lay-offs and re-orgs in the Life Science arena that may have affected our bottom line last year have bottomed out and the Pharma R&D segment will weather the recessionary storm better than most.
A plus for us is that our customers are telling us more and more often that they are outsourcing their software development and infrastructure costs to a sensibly priced vendor, as a way of again optimizing their R&D dollars. IO Informatics’ ability to reduce HR costs while delivering ROI in terms of reducing redundant research, shortened research cycles and more effective knowledge endpoints is a very good bet for our customers and prospects.
3. What technology advances and initiatives does IO Informatics plan for the next 12 months? Chief among our initiatives for the coming year is to extend software component facilities to better allow our customers to take advantage of Semantic Web resources that come on line almost daily. For some time we’ve used Semantic Web technology to allow our customers to integrate multiple silos of their own experimental data and to merge this with public pathway data to better understand what is happening in their research and to qualify biomarkers from multiple research modalities. This year, with the recent explosion in published semantic data resources, we will be able to bring an unmatched breadth and depth of curated, well-organized published disease and pathway and pathway information to our customers’ fingertips within our Sentient Knowledge Explorer.
Our newly announced Working Group for Personalized Medicine Informatics brings together experts from the spectrum of life science from early drug discovery to healthcare. We are investigating new methods and informatics systems that will allow for sharing of data from the bench to the bedside and back again. This focuses on exercising and extending our current technology with both published and proprietary customer data, to create biomarker-based Applied Knowledgebases. This is already beginning to deliver on the promise of predictive biology and personalized medicine for toxicity assessment and response, trials stratification, organ transplant and cancer treatment, among other areas.
4. What do customers want most from your company? Customers are looking for a company with software and staff that is willing and able to handle the basic “level 1 and 2” (data management and access) requirements as well as “level 3 and 4” (advanced integration, applied research and core business) challenges. At a higher level, they are looking at moving beyond the traditional vendor that offers storing and retrieval of data to one that in addition offers an environment which harvests the information to produce knowledge and practical solutions that give them a leg up to meet their goals.
Many customers use our Sentient software suite for “level 1 and 2” needs such as multi-source data management and federated database access and searching. For example, Customers use Sentient to help them share sensitive file-based data and databases across organizations and groups in a layered, HIPAA compliant manner. These same customers and others will use Sentient for “level 3 and 4” value such as for flexible integration of multi-source experimental and published reference data under meaningful Semantic ontological frameworks. This allows them to create qualified biomarker patterns for predictive biology and personalized medicine applications.
5. Will the downturn be a net positive or negative on ‘predictive technology’ adoption? It has been very exciting to see continuing and growing interest in “predictive technologies” over last year and the beginning of this year. IO Informatics is situated squarely within this space. If sales, partnerships and open doors to prospect opportunities are any indication, then predictive, translational and personalized medicine technologies will continue to be a growing market. We had a very exciting and productive Working Group on Semantic Applications last year. That said, this year’s new Working Group on Informatics for Personalized Medicine could not have a better membership.
In earlier stage research predictive biology applications can be used to identify targets and treatment populations more effectively or to fail compounds earlier. In later stage research these applications can address patient heterogeneity and stratify populations for more effective trials. Perhaps most important, this sort of technology is already showing promise at the point-of-care, for example through applications to identify and target patient populations for specific treatments. At each of these points, predictive biology applications serve to cut costs and improve outcomes.
Ariadne Genomics – Ilya Mazo, President
1. Dealing with the downturn? The year of 2008 has been very successful for us and we are planning on using this momentum to reassert the leading position for Ariadne going forward by investing heavily in the new marketing efforts, delivering a stronger message about the value of our offering for the players in the drug discovery industry, and developing new partner relationships with leaders in other segments of life sciences. We anticipate that the demand for life sciences software will be softer in the next 1-2 years due to economic downturn and the expiration of the major drug patents, but we hope to counter these negative trends by expanding our marketing reach to the broader categories of users.
2. Customers’ challenges? I guess we all have seen some examples of reorganizations, budget reallocation etc. and that might be just a beginning, yet I'd like to point out the stronger focus on qualitative changes, such as the better portfolio management strategies. In that regard the need to better leverage the existing information can be of paramount importance and that's where our solutions are of help.
3. What technology advances and initiatives does Ariadne plan for the next 12 months? We have a number of interesting developments in the pipeline. We continue to leverage our linguistics technology MedScan as the means of compiling targeted knowledge warehouses. To follow toxicology/drug effect and biomarkers are a number of other domain-focused knowledgebases, often built in the collaboration with our clients. We’re also working on the Semantic Search system to get beyond keyword searches for the scientific literature.
4. What do customers want most from your company? We have seen more interest in custom projects and product/services bundles and will be allocating more resources to meet customer and project-specific needs.
5. Will the downturn be a net positive or negative on ‘predictive technology' adoption? I see the adoption as increasing though slowly and driven mostly by the small numbers of highly skilled professionals. I would risk by making a parallel with the trends seen in 3d protein structure prediction world 10 years ago. There are emerging several niche applications that hopefully will become pretty standard quickly, while it will take years before the use of simulation can be adopted across the board. Ariadne has traditionally seen its role in this process as providing "building blocks" for the models and enabling the active users regardless of the simulation approaches they choose.
GeneGo - Julie Bryant, VP Business Development
1. Dealing with the downturn? 2008 was a very successful year for GeneGo and we doubled our revenues. We were definitely concerned when we listened to all the doom and gloom in the media but luckily enough we have not been affected yet. In fact, the exact opposite [occurred]. As a result of the downsizing there has been more outsourcing so our services group has grown. Most of the Pharma have the same amount of projects or more and less people to run the analysis therefore they have outsourced curation, annotation and analysis projects to GeneGo. Many of these projects are substantial and are multi-year agreements.
2. Customers’ challenges? Many of them feel in limbo as they are fighting to keep their jobs but this seems to be calming down now. They can now focus on what needs to be done with limited resources and they are having to prioritize these projects as they won’t be able to get to them all. By using data mining and automated workflow tools provided by GeneGo they can improve on efficiencies.
3. What technology advances and initiatives does GeneGo plan for the next 12 months? We will continue to focus on disease specific projects that require a lot of manual curation and annotation. And continue to provide easy to use data mining and analysis tools for manually curated content for the casual users.
4. What do customers want most from your company? Stability, high quality manually curated content, easy to use tools to access this information and great customer service. Plus high quality scientists to work on their outsourcing projects to provide cost effective results in a timely manner.
5. Will the downturn be a net positive or negative on ‘predictive technology' adoption? I think there is always skepticism when the word “predictive” is used but for some questions there are no other choices. Is it strengthening, static, or declining? [I’d say] static. The economy will not affect the spirit of early adopters…they will always be there forging the way. As long as you can justify new technology and prove a ROI companies will continue to invest in new technologies. In a way the state of the economy today creates a pain that results in a call to action to implement more efficient new technologies.
Symyx Technologies - Isy Goldwasser, CEO
1. Dealing with the downturn? Symyx recently restructured to strengthen our financial position, improve our operational execution, and focus sales to build and maintain close customer relationships. This included combining our tools and research services business units to better deliver the value of Symyx microscale, parallel experimentation and advanced informatics to our customers, regardless of whether they license our software, purchase our equipment, or access our contract research services.
2. Customers’ challenges? The global financial crisis has created an uncertain economic environment that has our customers reassessing and reducing their spending for 2009. Life sciences, especially pharmaceutical companies, are undergoing a major shift in R&D as they significantly restructure operations and accelerate outsourcing to reduce costs. Chemicals and Energy have now entered into a recession as an industry. In general, companies are reducing capital expenditures but increasing their reliance on outsourcing and informatics offerings that drive efficiencies.
3. What technology advances and initiatives does Symyx plan for the next 12 months? We have two significant initiatives underway. We are continuing to extend the capabilities of Symyx Notebook to provide our pharmaceutical and biotechnology customers a single enterprise electronic laboratory notebook that can be deployed across multiple biology and chemistry disciplines. We are also extending our proprietary microscale, parallel experimentation and advanced informatics technology to provide both large and small molecule contract research customers directional information in days, rather than weeks or months. This enables them to quickly assess which compounds hold promise, and which are dead ends, thereby increasing their R&D productivity and agility.
4. What do customers want most from your company? Over the past decade, the cost of new drug development has increased and the time to market has expanded, while the number of successful new drugs entering the market has declined. This trend has to change, and our customers are under tremendous pressure to do more with less. This requires increased productivity as well as lower costs. Our customers want us to help them reach better results faster and more often at a lower cost.
5. Will the downturn be a net positive or negative on ‘predictive technology' adoption? Traditional laboratory development methods have not worked. Companies must significantly improve productivity to stay competitive, and this requires new approaches. While overall R&D spending will most likely decrease during this downturn, the percentage of overall spending on technology that improves productivity should increase. Cost cutting alone does not improve competitive position, and tough times force companies to focus on investments that improve performance, increase productivity, and provide an acceptable return-on-investment. It is most likely that a combination of modeling and simulation technologies coupled with early-stage, experimental capabilities will be the most effective in helping companies identify winners and losers earlier in the R&D process.
Ingenuity Systems - Ramon Felciano, CTO
1. Dealing with the downturn? Trends we are seeing include: organizations overall have to do more with less. [Within] Big Pharma there is consolidation and more outsourcing. Centralized informatics groups are getting smaller, shifting of some of those responsibilities to therapy area research groups. There are more collaborations with biotechs and third parties. In academia, there’s less impact so far as grant cycles are long. We continue to track trends/economic conditions closely, and make sure they are considered in our product development. We are always striving to make IPA high value for the individual therapeutic area researcher, following the belief that this will in and of itself improve productivity and success of their teams, departments, organizations and collaborations. The current economic conditions have really reinforced this emphasis internally to Ingenuity.
Our objective with IPA is to consider and support the broad range of workflows that researchers follow, from start to finish and make those steps as painless as possible. Our strategy has been to develop IPA to enable end user scientists to address a wide range of research objectives (ex: hypothesis generation, biomarker discovery, target ID/validation, toxicology, mechanistic modeling, etc.) and support multiple platforms (gene expression, proteomics, genotyping, SNPs, miRNA, etc.). We believe that products like IPA empower the individual researcher will become more essential in tough economic times because many research teams will have to do more on their own, or collaborate externally – and IPA supports these scenarios.
2. Customers’ challenges? Consolidation and downsizing (pharmas), although this partially reflects industry transitions that pre-date the current downturn. Resources are more limited, so we see organizations: outsourcing and partnering with biotechs; internal teams are expected to handle additional responsibilities once completed by other groups within the company. Our academic and government customers have not shown impact in 2008. This may change in 2009, depending on grants and where money is distributed – hard to know yet.
3. What technology advances and initiatives does Ingenuity plan for the next 12 months? The current economic conditions will continue to drive our product roadmap – meaning, we will continue to think about the diversity of researchers that use IPA and how to make it the best tool for their particular workflow. We will continue to focus heavily on supporting customer workflows and research strategies around their priority therapeutic diseases areas, growing investment in our high-quality structured content, and easy-to-use tools that facilitate sharing within organizations and with remote groups.
4. What do customers want most from your company? At a high level, our customers understand Ingenuity is very good at providing them access to biological knowledge that is current and comprehensive, but more important the knowledge is structured and organized. Generally speaking, customers look to Ingenuity to help them leverage knowledge about biology, chemistry and drugs to support key decision points in their drug discovery workflows. Examples of activities include: developing disease models that connect a genotype to phenotype; prioritizing and gain confidence in targets and pathways; formalizing and evaluating testable, mechanistic hypotheses of drug function; and rapid assessment of what functions (ex: apoptosis), diseases, or pathways that are closely associated with a group of genes.
5. Will the downturn be a net positive or negative on ‘predictive technology' adoption? Based on our interactions with customers, it appears that predictive technologies are growing and becoming more widely adopted. There is broader interest in tools that provide concrete, understandable and testable hypotheses, i.e. strong desire to see and understand the pragmatic benefits. I expect that predictions “in the small”, which may be less far-reaching in their insights but have higher predictive power, will see broader adoption in the near term then more complex, whole system modeling and physiological simulation. We need both, but the latter requires substantially more time, expense and expertise to deliver the promised value. As evidenced by growth of publications for disease models, researchers are using IPA to develop predictive models and this application of IPA is growing steadily.
Strategic Medicine- Michael Liebman, Managing Director
1. Dealing with the downturn? Strategic Medicine (SMI) is a new company in the process of identifying and securing funding and the economic downturn has created a significantly conservative atmosphere in the available. SMI focuses on innovative solutions in patient care and disease stratification. We’re uniquely positioned in the gap between the EMR infrastructure and its intended use, focusing on how such data can be converted into value across the healthcare system for patients, physicians, pharma, and payers.
2. Customers’ challenges? Healthcare is one of the few areas that continued to grow during the recent economic downturn, in part because of the needs of a society that is both health-conscious and moving into post-middle age. This drives the need for better care (decisions) for the patient and the physician, and addresses the needs that are expanding in the payer and pharma communities, to deliver diagnostics and therapeutics that are sensitive to the evolving technologies but both safe and effective for the patients. The move towards outsourcing in the pharma/payer communities presents additional opportunities for SMI to identify and address.
3. What technology advances and initiatives does Strategic Medicine plan for the next 12 months? SMI has been developing disease models that comprehensively integrate the stratification of clinical observations with genomic/molecular characterization of the patient, the actual clinical practice of medicine (standard of care) and both the economic and cultural aspects of patient response. This unique approach forms the basis for truly comprehensive decision support that bridges across the healthcare ecosystem and recognizes that the patient, physician, payer and pharma need to work together to improve healthcare as an integrated system.
4. What do customers want most from your company? Solutions! For too long tool/data providers have expected their customers to “know” what to do when their products were delivered- but with extremely limited success. Particularly with the current economic situation, there is decreasing need to “collect” such resources without the ability to identify their immediate impact on productivity and/or the “bottom line”. The key to changing the paradigm Is to understand the customers’ needs and tailor the solutions around these needs, regardless of the composition of data and analytics necessary to produce these solutions. SMI has established a set of strategic partnerships with tool, service and data providers to help address the necessary complexity in designing and implementing solutions for its customers.
5. Will the current economic downturn be a net positive or negative for ‘predictive’ technology adoption? There has been a general lack of confidence in the results of modeling and prediction because of the “overselling” of the approach - much the way computer graphics was oversold as the solution to drug design many years ago. The reality is that modeling and simulation are potentially critical components of the “solution” that is needed but the manner in which they are implemented should focus on their ability to assist in rational experimental design and the establishment of a modeling-experiment paradigm that feeds the results continually back into refinement of the model. There is significant opportunity with the economic downturn to realize the potential benefits for positioning these approaches to support rational experimental design rather than deliver a complete solution, thus enhancing the value of both the computational and experimental approaches by linking them more closely.
Physiomics - Christophe Chassagnole, COO
1. Dealing with the downturn? We are a listed company on the AIM (LSE) market and we did a small fund raising last December. So that combined with recent increases in revenue and our low cost base means that (fortunately) we have been relatively unaffected by the turmoil.
2. Customers’ challenges? Our main client is Lilly and so far there has been no noticeable effect. But some partners that are pre-revenue Biotech companies have taken action to reduce their R&D expenditure, due to the difficulties in the capital markets.
3. What technology advances and initiatives does Physiomics plan for the next 12 months? We are working on model development for two Lilly projects. We’re refining our cancer Chronotherapy model to simulate chronotherapeutic schedules – results will be presented at mainstream conferences including AACR. We’re out-licensing our new ModelPlayer which allows customers to perform their own simulations. Finally, we are continuing development of our virtual tumor platform, with a virtual mouse xenograft planned for the end of the year.
4. What do your customers want most from your company? They want insight into biological problems that can only be attained by using the best data visualization and simulation tools. The process requires in-depth consulting on model development, as opposed to a “black box” approach.
5. Will the downturn be a net positive or negative for ‘predictive technology' adoption? If anything, the economic crisis has increased interest in predictive technologies – if only by showing the importance of foresight! At Physiomics we use a systems-based forecasting approach which combines network analysis, systems dynamics, and old-fashioned biological research, and has provided tangible benefits to clients. If anything, the cost-saving advantages of modeling and simulation should become more attractive as budgets shrink.
Genedata - Othmar Pfannes, CEO
1. Dealing with the downturn? For the next 18 to 24 months Genedata does not anticipate any direct impact of the economic downturn. We have established long-term relationships with most of our customers and expect continued growth globally. Beyond 2010, it is hard to predict as it is unclear how long the recession will last and what new policies will be put in place, especially in the US with the new administration. For the moment, no changes in our business plan are anticipated, with several new positions budgeted in 2009. We will certainly review the status of our markets in 9 to 12 months and decide then if we need to make changes on our business plan.
2. Customers’ challenges? Genedata differentiates between customers in segment 1 (major pharmaceuticals/biotechs), segment 2 (biotechnology companies financed by capital markets) and segment 3 (other life science markets, e.g. agrochemicals/seeds, cosmetics, etc.). In the near future, we believe that customers in segment 2 will have some problems to maintain their cash positions and therefore we do not anticipate major growth in this segment. In segments 1 and 3 we anticipate that both will continue to invest in bioinformatics to remain innovative and improve on their efficiency in R&D. Actually possibly due to the economic downturn, we are seeing some new interest from those companies that find it increasingly difficult to justify the cost for internal development efforts, and thus turn to external commercial solutions like Genedata for essential processes.
3. What technology advances and initiatives does Genedata plan for the next 12 months? Several: within Expressionist business, further advancing cross-omics and predictive toxicology; within Screener business, some new developments in high-content screening; within Phylosopher business, support of next generation sequencing. As a side note: on the mass spectrometry side, we seem to have crossed the early adopter barrier with Expressionist and are increasingly seeing this adopted by mainstream groups in proteomics and metabolomics. We will continue to work with these groups to handle increasingly large and complex MS tasks. Some new things are too early to talk about…
4. What do your customers want most from your company? Genedata customers want continued delivery of high-quality software products and high-valued support with a focus on streamlining their internal research processes. We continue to also get more requests for outsourcing services.
5. Will the downturn be a net positive or negative on ‘predictive technology’ adoption? I actually think that "predictive technologies" are just in their very early adoption phase and are still used very experimentally. It will definitely grow significantly over the next 10 years. The application of these technologies requires major changes in how drug discovery and development is done. This is a long term process and will probably not be affected significantly by the "short term economic downturn."
This article first appeared in Bio-IT World’s Predictive Biomedicine newsletter. Click here for a free subscription.