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Informatics strategies for instrument companies.

A number of analytical and life science instrument companies have increased their stake in the informatics marketplace this past year through acquisitions (see IBO 11/15/04), partnerships, product introductions and increased investments. While participation in the software and informatics market is not new for instrument companies, it is accelerating, driven by the evolving needs of customers as well as growth opportunities and technology developments. The priority being placed on informatics by instrument companies is changing business strategies and product development as well as the competitive environment. More generally, informatics is redefining the solutions that instrument companies provide and the needs to which they must respond. In this way, it is influencing not only specific companies and products, but the instrument industry as a whole.

Beyond the instrument-based software, such as chromatography data systems, the history of instrument company involvement in informatics products is primarily with LIMS (Laboratory Instrumentation Management Systems). Applied Biosystems, Perkin-Elmer, Analytik Jena (AJ Blomesystem GmbH) and Thermo Electron continue to sell LIMS. Also, in recent years, instrument companies have established more partnerships with informatics vendors, such as Spotfire and Advanced Chemistry Development.

The latest acquisitions and informatics investments by instrument companies are taking place in a much different environment, where the amount of laboratory data continues to increase exponentially and integration of disparate types of data from various sources is the new paradigm for life science research and drug development. They are also taking place in a marketplace where informatics capabilities continue to expand at a rapid pace and have become more closely allied with instrument capabilities and functions, specific applications and organizational workflow. Informatics is also a rapidly growing and relatively young market, making it even more attractive to instrument companies whose technologies are more mature.

Acquisitions

Although all instrument companies may be experiencing many of the same opportunities and customer requirements when it comes to informatics, they are not all approaching the market in the same way. This is evident in the most recent acquisition activities. Recent developments at three of the largest instrument vendors--Agilent, Thermo Electron and Waters--illustrate that each company is pursuing informatics in its own way.

This year, all three companies acquired privately held informatics companies with strong positions in their respective markets. Following its purchase of Creon Lab Control GmbH last year (see IBO 7/31/03), which sells electronic lab notebook, LIMS and record management workflow informatics systems, Waters, this year, acquired NuGenesis Technologies, provider of the Scientific Data Management System (SDMS) for the consolidation and management of laboratory data (see IBO 1/31/04). In August, Agilent purchased Silicon Genetics (see IBO 8/31/04), which is most well known for its GeneSpring software for the analysis of gene expression data from microarrays. Then, in September, adding to its sizable LIMS business, Thermo Electron purchased InnaPhase (see IBO 9/15/04), a company specializing in LIMS for pharmaceutical and biotechnology companies.

"After the formation of [the Integrated Biology Solutions] unit (see IBO 3/15/04), where fundamentally our goal is to become the enablers of systems biology in the marketplace, we effectively started to fast track some activity on the informatics front, which at this point is visible through the acquisition of Silicon Genetics and a true increase in the investment in terms of informatics solutions," says Francois Mandeville, director of Informatics for the unit. "[Silicon Genetics] has outstanding expertise in rapidly creating a very appealing and very effective, yet very easy to use and powerful analysis platform," says Mr. Mandeville. "They had a very good technology that was highly scalable and highly portable to other analysis fields, and they had a very effective value delivery system, a channel, an e-commerce infrastructure to sell and get that technology in the hands of their customers."

Likewise, the acquisition of InnaPhase brought Thermo Electron additional expertise and a valuable installed base. "Thermo always had the scale, but with the acquisition of InnaPhase, Thermo now has the innovation and the scale to really deliver for the customers," says Jo Webber, Ph.D., general manager of Thermo's Informatics business and formerly the CEO of InnaPhase. "Thermo really saw a lot of benefit in InnaPhase's in-depth knowledge of the pharmaceutical industry. InnaPhase has products that go from discovery through manufacturing, and very innovative software solutions."

For Waters, Creon and NuGenesis shared one characteristic in particular that made them attractive acquisitions. "Our acquisition targets were partners of ours (we have a software partnership program). So we have experience working with these people, and not only experience working with them, but their applications, and our solutions were integrated prior to the acquisition," says Pat Martell, director of Informatics Marketing for Waters.

With regard to Creon, he comments, "It was the technology first, and the eLab notebook was a very nice secondary capability that we saw." As for NuGenesis, Mr. Martell says, "We did a lot of work with the NuGenesis organization, and they were very successful in securing and developing the scientific data management software market niche. We estimated they had 70% of that market. It's a relatively small and growing market." However, SDMS also extended the technologies available to Waters. "The NuGenesis SDMS product really delivers the ability to categorize and capture information in an orderly fashion that makes sense to the business so [the lab] can describe and construct a metadata approach that will be usable when they are searching for results and information," he says

Despite the fact that each company's most recent acquisition targets a different type of informatics platform and specific capabilities, the acquisitions were key to adding technologies to each company as a whole, including to their instrument businesses. "Silicon Genetics has great technology that will allow us to create new informatics analysis platforms, they have a channel that we could use to sell our various informatics products and they have expertise that will allow us to create new analysis solutions," says Mr. Mandeville. "They have outstanding technology that has ramifications much beyond the field of gene expression."

One aspect of the integration of the acquired technologies is merging them with specific product lines. About Silicon Genetics' technology, Mr. Mandeville says, "We're working jointly on, first of all, making sure it's tightly integrated with the rest of Agilent's software platforms, that it supports all of Agilent's instrumentation, data file formats and so on as well as other things that will enhance the product going forward."

Such integration also extends to application-specific solutions. "There are a number of synergies that Thermo had envisioned with the acquisition of InnaPhase," says Dr. Webber. Among these is the combination of the Watson LIMS for bioanalytical work with Thermo's triple quad mass spectrometers (MS) and the Xcalibur MS software.

"Our informatics information management software ... provides a horizontal application platform for managing information that can be tailored through either templates or integrated for those specific applications," Mr. Martell tells IBO. He notes that both the eLab Notebook and SDMS have been integrated with Waters's Empower chromatography data system (CDS) and MassLynx mass spectrometry (MS) software.

However, technology integration capabilities are also important beyond a company's own systems. Referring to both Creon's and NuGenesis's products, Mr. Martell says, "They had to accommodate all different data types from different manufacturers, which was attractive as well.... That was of value to us in having credibility with our customers, [so we can] say 'we have market-leading positions in CDS and MS software solutions; however, we can also help manage different data types from different data sources beyond the Waters solutions.'"

The same was true for Agilent in forming its exclusive distribution agreement with Scientific Software (SSI) for its CyberLab Enterprise Content Management System (ECMS), which now goes by the Agilent brand name Cerity ECMS (see IBO 7/15/04). "One of the reasons we chose to partner with SSI is not only do they have a leading-edge data management platform, but they have been very good at supporting a wide range of analytical instrumentation from a variety of different vendors," says Jim Miller, director of Software for Agilent's Life Sciences and Chemical Analysis Group.

Complete Solutions

Integration, on both a technology and product level, is part of a clear strategy shared by all three companies to add informatics capabilities in order to provide complete solutions to end-users. As the companies explain, the complete solutions concept increasingly incorporates informatics as well as chemistries and instrumentation.

"We've been expanding our leadership in analytical instrumentation to complete solutions, and part of that is building a complete portfolio of informatics for laboratory data collection, analysis, interpretation and management," says Mr. Miller. With informatics becoming key to laboratory functions, it must be part of a solution that can truly be considered comprehensive. "[The customers] are looking for more of a complete solution, which involves instrumentation in some cases, [as well as] automation and robotics, and also software. We are looking at providing these more comprehensive solution sets," says Dr. Webber.

"If you don't have the appropriate software to help [the customer] get through that information that they just captured, you've just made a bigger bottleneck," says Mr. Martell. "Informatics breathes some fresh air into the instrumentation business ... The software, the information as well as managing the information that's captured [in the lab] is just as important [as the instrument] to be able to help make it a streamlined and effective process start to finish." As he explains, "That's really what is important when you look at Waters's total systems approach to helping our customers versus others that may have point solutions."

In life science, especially, where informatics plays a particularly significant role in shaping the direction and nature of research and drug development, data organization, management and integration are some of the most daunting problems that labs must address. "What you're seeing is that increasingly informatics technologies in life sciences are becoming a bottleneck for our customers to be able to reap the value of their investments in the various 'omics' technologies," explains Mr. Mandeville. "So what that means is that if you want to succeed at being a provider of measurement technology in the life science area you need to help your customers in acquiring, assembling [and] integrating the right informatics technologies, so they can get value out of the measurement platforms you provide them."

In particular, the amount and complexity of the data coming from some life science instrumentation, which is higher throughput, more sensitive and more comprehensive, as well as the challenges presented by fields such as proteomics, requires greater informatics abilities. "[L]ife science instruments have improved," says Dr. Webber. "This higher level of information coming out from the lab makes it all the more important to have good software that can manage and retain that data."

Because informatics is beginning to play such an integral and influential role in life sciences as well as other disciplines, it can have a more prominent effect on product choices. "Software is often a distinguishing factor [for instrumentation]," Dr. Webber tells IBO. As Mr. Mandeville puts it, "The purchase decisions of measurement platforms is becoming more comprehensive, a more holistic decision, which ultimately gives a greater importance to informatics technology."

In this way, informatics is an extension of instrument capabilities, not only technically, but also in what instrument companies can provide to end-users. "We may have customers that have invested in third-party instruments. They take advantage of our software because of its robustness, high quality and comprehensiveness in the way it is delivered and deployed," Mr. Martell tells IBO. "Over time, they say, 'Waters is a good partner to work with, they support us....' They start to look at our system solutions, so it's a synergistic approach."

Standardization

The importance of informatics to laboratories and workflow has also become more significant due to standardization, or when a company coordinates and specifies laboratory systems and practices across their operations. Standardization highlights the role of enterprise-wide solutions and emphasizes interoperability and workflow.

"Most of the companies, especially larger companies, have really diverse or heterogeneous IT environments, so they've got multiple, different chromatography data systems. In many cases, they have multiple LIMS systems in the same company, a variety of analytical workstations and so on. The ability to integrate those systems together is something those companies are really struggling with," says Mr. Miller. Standardization is a growing trend for LIMS in the pharmaceutical industry, says Dr. Webber, as is global deployment of LIMS.

Demand for effective enterprise-wide software solutions and greater interoperability are also being driven by regulatory concerns. "A trend that is happening as well in chemical analysis that we expect to continue is there's more interest in FDA-like compliance activities in the chemical industry," Mr. Miller tells IBO. "So customers are tending to want the control and trace ability that electronic signatures provide. And we anticipate that industries like environmental and food and beverage will soon face compliance-like regulations."

The Future

The demand for greater data integration and interoperability among platforms, data types and data sources, as well as standardization across laboratories, is expected to drive informatics product development. These efforts will focus, in part, on making such informatics solutions easer to use and install, more flexible and easier to connect to each other, to other types of software and to instruments.

"People are going to expect much more of the plug-and-play environment," says Dr. Webber. Mr. Mandeville also believes the informatics industry is changing and focusing more on delivering products that are closer to the concept of plug and play. "This goes much beyond the traditional approach of data standards," he says. "Data standards are step one toward an industry that offers integrated solutions."

Data file standards enable files created in different file formats, including by different instruments and software, to be shared. Whereas earlier efforts at creating analytical instrument software standards were ineffective, current efforts (see page 7) are expected to be much more successful. Agilent, Thermo and Waters strongly support these efforts and have high hopes for their success. Mr. Miller tells IBO that such efforts could extend to instrument control, noting that instrument code-sharing agreements between companies are becoming more common.

Likewise, Mr. Martell also expects greater interoperability to develop. Discussing the interoperability of Waters's SDMS and eLab notebook, he notes that, "Ibis is step one. Longer term, we expect to, and are working on, making it even easier for our customers to leverage information that may be stored in other applications, whether they may be Waters's applications or third-party applications."

However, does the demand for integration and interoperability mean that companies will continue to add to their informatics product range? The answers vary. "We did have a LIMS and ramped down the commercialization of that several years ago, and we're now in the process of ramping it back up," says Mr. Miller. In regard to electronic lab notebooks, he responds, "That's not a product that we have yet, so you know we'll be looking to sell that either through a partnership ... or we might do something like we did with SSI, OEM the product and resell it, develop our own or other options."

As for Thermo, it has announced that it will be debuting an expanded informatics product line at next year's Pittcon, which will include off-the-shelf LIMS solutions for the pharmaceutical industry. "We're always looking at other acquisitions where we can increase our ability to provide comprehensive solutions to the customer," comments Dr. Webber.

Although Waters acquired a LIMS product when it bought Creon, Mr. Martell expects the company's development efforts to lie elsewhere because of reports of the amount of investment and the time it takes to deploy a LIMS solution. "We think LIMS, though important, is not the premier solution for acquisition, processing and management of information," he says. "If I look at the way we've worked through this, we're looking at it from the source of the data and moving up into the information hierarchy." However, as for informatics in general, he says, "We will continue to look at either Waters-developed products or outside investments where it makes sense with our core competence. We're not going to go out and try to be all things to all people."

In contrast to a decade ago when instrument companies pursued the LIMS market, informatics is now more connected, not only to instrumentation, but the laboratory process a whole. There is no doubt that informatics is influencing the analytical and life science instrumentation business. In fact, the extent of this influence may be just beginning to be fully appreciated and utilized.
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Title Annotation:marketplace
Publication:Instrument Business Outlook
Geographic Code:1USA
Date:Dec 15, 2004
Words:2753
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