PerkinElmer Acquires Geospiza, Beefing Up Software for DNA Analysis

5/5/11Follow @xconomy

Geospiza has been around the block a time or two in the bioinformatics business, and now after 14 years in the game, it has come to the end of the road.

The Seattle-based company, which makes software for scientists who analyze data from genetic experiments, said today it has agreed to be acquired by Waltham, MA-based PerkinElmer (NYSE: PKI), the giant maker of tools for life scientists. PerkinElmer, which said it generated $448 million in first-quarter revenue, didn’t disclose to investors how much it paid to obtain Geospiza. PerkinElmer CEO Rob Friel, however, did say in a conference call with analysts that the acquisition will have “minimal impact” on his company’s near-term finances, but that it represents a strong growth opportunity.

“Genomic information is becoming increasingly important in understanding and treating disease. Making sense of the unprecedented volumes of data generated by next generation sequencing and other biological measurements is critical to improve the disease diagnosis process and drug discovery,” said Richard Begley, PerkinElmer’s president of emerging technologies, in a statement.

Geospiza, which I profiled about a year ago when it turned profitable, has been one of the small and persistent voices in the market that has insisted that biologists need better software to manage genomic information. The company, founded in 1997, struggled to get traction with this argument in the wake of the Human Genome Project, but was able to weather the storm as competitors fell by the wayside, and the market eventually became more attractive. As DNA sequencing instruments from Illumina (NASDAQ: ILMN) and Life Technologies (NASDAQ: LIFE) have made it possible to sequence an entire human genome for as little as $10,000 and in a few weeks, it has created a tidal wave of DNA data points that more researchers are struggling to visualize and analyze.

Geospiza has long been forced to compete with old-school Excel spreadsheets in some cases, and custom-made “home-brew” software programs that individual biology labs make for their own projects. But Geospiza has gradually been chipping away at the market, winning over a series of big-name customers at places like the Institute for Systems Biology and University of Washington, Harvard Medical School, Yale University, Children’s Hospital Boston, and the University of Florida. Geospiza, as of a year ago, had about 20 employees.

It certainly looks like this deal has been brewing for a while. PerkinElmer took a multi-year license to Geospiza’s technology back in January.

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