Compendia Bioscience has evolved significantly since it spun out of the University of Michigan with its cancer genomics research software four years ago. Instead of just selling software and moving on to the next customer, Compendia co-founder and CEO, Daniel Rhodes, says that his firm has prospered by forming close ties to pharmaceutical companies that rely on the firm’s expertise and technology.
“We’re transforming from a software company only to really a collaboration partner with pharma, where we are licensing them access to our technology but also providing expertise and services,” Rhodes says. “So it’s a really exciting time for our company right now.”
Ann Arbor, MI-based Compendia is capitalizing on large pharmaceutical companies’ greater reliance on external firms like itself for developing new products, as their own internal research pipelines have run dry. As its name suggests, Compendia has built a compendium of cancer genetic data from published journal articles, academic and government databases, and about the molecular profiles of about 43,021 actual cancer patients’ tumors.
The firm’s software includes advanced analytics and search capabilities that enable scientists to mine its database and conduct analyses for their cancer research. For example, the firm’s Web-based software aims to give drug researchers insights into the biology, regulation, pathways, and patient populations to aid in the development of new therapies to combat tumors.
A major source of demand for Compendia’s software comes from life sciences firms that want to find out which genes are found in patients that are likely to benefit from a certain drug. The firm formed an alliance last year with MDS Pharma Services, in which the companies would use both Compendia’s cancer genomics software and MDS’s cancer cell screening services to help drug companies predict which patients would be likely to respond to their new cancer therapies. Separating the winners from the losers early on is a big deal in an industry where only one out of every 10 drugs that enters clinical trials ever becomes an FDA approved product.
Besides helping its pharma customers boost the odds of success, Compendia has also made some discoveries of its own. For instance, Rhodes and his team used the firm’s software to discover a gene called SPINK1 that is over-expressed in a subset of men with prostate cancer. The key finding was published in 2008. The software was also used at the University of Michigan, where Rhodes originally co-developed the technology, to identify gene fusions that are believed to cause prostate cancer.
The San Diego-based diagnostics firm Gen-Probe (NASDAQ:GPRO) has licensed the University of Michigan’s gene fusion discovery made with Compendia’s technology. Gen-Probe is now in the early stages of developing a test that uses the biomarker to diagnose aggressive prostate tumors and to monitor how well certain therapies are treating the cancer, according to its website.
In fact, Rhodes began developing what eventually became Compendia’s cancer genomic research software while working in the lab of renowned cancer researcher Arul Chinnaiyan at the University of Michigan. Rhodes says that he and Chinnaiyan originally built out the database and software for their own internal cancer genomics investigations, but it later became apparent that there was interest among other academics and pharmaceutical companies to make use of the technology.
Rhodes and Chinnaiyan co-founded Compendia in early 2006. By 2007, the firm announced it had picked up pharmaceutical companies as customers. Now the firm’s software has been licensed by 15 of the top 20 cancer drug developers in the world, including the British drug giants AstraZeneca and GlaxoSmithKline. Also, there are 17,413 academic researchers who use a basic version of Compendia’s software for free, Rhodes says.
The company’s technology might overlap with searchable academic cancer databases, and Rhodes concedes that there are a number of bioinformatics outfits that offer genomic research software. Cupertino, CA-based NextBio, for instance, makes use of publicly available genomic data, and pools it with proprietary experimental results generated by the Big Pharma companies, to create a deep, searchable database for drug developers. What helps distinguish Compendia, Rhodes says, is its focus on cancer and its combination of both patient tumor profiles and cancer biomarkers validated in published research.
Compendia has grown to 26 employees, and its operations are primarily supported by income from its technology licenses and services, Rhodes says. The firm reports that it has received $4.1 million in two Small Business Innovation Research grants since 2007. The state of Michigan has also supported the firm with $2.8 million from its 21st century jobs fund.
The company plans to break even or even reach profitability this year, Rhodes says. It’s likely that the firm’s partnerships with pharma companies will have a lot to do with that potential profitability.
“The neat thing that’s happening for our company right now,” Rhodes says, “is that there is this trend in pharma to look to external innovation providers.”
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