New Contract Services

Recently, a number of announcements have highlighted the growing presence of instrument companies in the contract services market. Although not a new development, instrument companies’ presence in this market is expanding, as they seek to capitalize on the increased outsourcing of specialized lab services. The new services provide a variety of technologies and applications, and each is positioned differently in the market. Nonetheless, together they illustrate the value of offering contract services for instrument companies, both large and small, and the advantages that instrument companies bring to the market.

Nanostream, the maker of the Nanostream microparallel liquid chromatography systems, announced in July that it now offers assay development services. Headed by COO Jonas Ekblom, former head of Global Program & Portfolio Management at Invitrogen, the services organization will provide assay development and screening services for biochemical assays for early drug discovery. “We’ve had many requests over the last half year to a year, both from existing customers and from people who don’t have our instrumentation. [They have been] coming to us asking if we can help them to develop assays and run analyses on small compound sets,” he told IBO. The company used to perform services on a case-by-case basis only. Using its technology, Nanostream will focus on developing assays, including kinase, lipid-modifying enzyme and protease assays. “Our game is to develop assays for enzymes and receptors that are generally very challenging or difficult, or even impossible, to develop with conventional technologies,” explained Dr. Ekblom.

Used for assay development and detection, the Nanostream LD system provides simultaneous, real-time detection for 24 samples using as little as 0.5 µl of sample. “We can work with suboptimal substrates for enzymes and still be able to yield product,” Dr. Ekblom noted. “A lot of problems that typically can make very confusing results with conventional plate-based assays, we can see, such as precipitation of substrates, contaminating enzymatic activities, and cleavage or impurities in test compounds or sample mixes.”

The service business is expected to increase Nanostream’s recurring revenue and access to new customers. “Services is just a great opportunity for a company like ours to get a more smooth revenue stream during the course of a year,” Dr. Ekblom stated. In addition, he told IBO, “Services allows us to recognize revenues from customers who are not primarily interested in buying an instrument from us, but who might be able to reserve capital or money to do outsourcing. So we see it as an incremental revenue stream.” Another advantage is the showcase the service organization provides for Nanostream technology, leading to possible system sales.

A time- and labor-intensive activity, assay development is a prime candidate for outsourcing. PerkinElmer recently announced it would join the market, offering assay development for GPCR and kinase cell-based screening, as well as assay miniaturization and conversion of ELISA assays to its AlphaLISA technology. “The timing is appropriate in that the outsourcing trend of many in biopharma is increasing in general, and PerkinElmer is now well positioned to take advantage of this. Indeed, PerkinElmer is viewed as a complete solution provider by many of our customers,” noted Dr. Richard Eglen, vice president of Discovery of Research Reagents for PerkinElmer. The services also capitalize on the company’s reagent technologies. “In terms of reagent solutions, PerkinElmer now has a very deep portfolio in assays for kinases and GPCRs, as well as biomarker detection. Consequently, several of our customers were interested in the company using the expertise in assay development and offering this as a product,” he told IBO.

As with Nanostream, PerkinElmer’s services allow end-users to familiarize themselves with the company’s assay technologies and create future revenue opportunities. “We expect that many of the customers will transition to using PerkinElmer products in their own labs, since the assays will be developed using PerkinElmer reagent technology,” explained Dr. Eglen. Also, as he noted, “This offering will now synergize with several other of our in-house services, including a custom synthesis business in radionuclides.”

Thermo Fisher Scientific also recently announced a service offering. In June, the company’s Dharmacon business launched RNAi (RNA interference) discovery and therapeutic services, including target identification and validation, biomarker discovery and therapeutic technology development. “In the market, generally, there’s an increasing demand for services that are focused on large RNAi-based screens, like whole-genome siRNA [small interfering RNA] screens,” said Michael Deines, vice president of Sales and Marketing for Thermo’s Dharmacon Products business. “Our customers are increasingly realizing the power of doing these kinds of screens, but often don’t have the infrastructure or the resources to do them or have all their high-throughput screening facilities already booked,” he told IBO. Profiling of miRNA (microRNA) levels is also an area of increased interest, according to Mr. Deines.

Mr. Deines emphasized that Thermo Fisher Scientific is uniquely positioned to provide such services due to its expertise in reagents, assays, lab automation, screening instrumentation and software, and in the integration of these technologies. “[W]e can develop the assays in house and optimize the assays, we can perform the high-throughput genome-wide screens or other high-throughput screens, we can develop the lab automation and integration for the customer’s specific assay,” he explained. “And we give the customer the option that we can essentially develop a replica of our laboratory in their facility,” he added. “What we find at many pharmaceutical companies is that the budgeting process supports outsourcing as part of the work to demonstrate that you can get solid results,” said Mr. Deines, adding that such results can lead to purchases.

The services also provide access to Dhamacon’s expertise. “Due to the approach that we use, we are able to do a much more quantitative analysis and to look much more accurately at the levels of microRNAs within a sample,” Mr. Deines explained. The company also gains expertise through an academic consortium. “The RNAi Global Initiative is something we started back in 2005 and we now have 24 of the world’s leading academic research institutes who are all doing genome-wide screening using our siRNA libraries.”

< | >