Spiral Genetics, Started by UW Classmates, Looks to Crunch DNA Data in New Way

11/30/11Follow @xconomy

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super-specialized for home-brew software programs, and many scientists lean on open-source programs to manage basic tasks. Most of the money for high-powered DNA analysis goes into the DNA sequencing hardware that’s made by San Diego-based Illumina (NASDAQ: ILMN), Carlsbad, CA-based Life Technologies (NASDAQ: LIFE), and others.

Spiral’s idea is to package some of the commonly used open-source algorithms and adapt them for use on a distributed computing platform, which harnesses the power of many computers during their downtime. In July, the company introduced its initial product, geared toward bioinformatics experts. Three months later, it rolled out a second product designed for less computer-savvy biologists who prefer a more user-friendly drag-and-drop interface, Mangubat says.

Pricing of the product—especially given how addicted this customer base is to free software—could end up being a challenge. Spiral is offering customers two options: a pay-as-you-go system or subscriptions. It asks customers to buy credits, sort of like iStockPhoto, based on how big or complicated the computational job is. It ends up costing about $2,400 to analyze a whole genome, and about $80 to analyze a partial DNA readout known as an exome. Given that whole genomes are now said to cost $4,000 to $5,000 apiece to gather the raw sequence data, it’s safe to say customers will need a lot of convincing to fork over additional cash for the analysis.

Todd Smith, a cross-town competitor at PerkinElmer’s Geospiza unit, says the market for bioinformatics programs still hasn’t gained the kind of momentum that many in the industry are counting on. But Smith, who has been a part of Geospiza since 1997, says he believes the computing wave for genomic data is still “a question of when, not if” it will take off.

“They are out there fighting the fight and trying to make a mark. I give them some credit for that,” Smith says.

Spiral has gotten by its first couple years on some financing from friends and family, followed by individual angel investors, Mangubat says. She isn’t saying how much the company has raised to date, and isn’t disclosing initial revenues.

The next big test will be to see if Spiral Genetics can raise money, and build up a strong roster of big-time academic customers. But the startup has passed one test already that most entrepreneurs have to learn at some point: Spiral didn’t fall in love with its original idea, and was willing to switch gears when a more promising opportunity presented itself.

“You have to be open to the idea that your company is going to morph. Over the course of a year, we morphed a lot,” Mangubat says.

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