Transcript No Slide Title

Developmental Strategy for a
Bioinformatics Initiative
September 20, 2000
Columbus, Ohio
Ernst & Young LLP
Strategic Consulting for the Life Sciences
Introduction
A blue-ribbon panel of the NIH recently recommended supporting the formation of 20 bioinformatics
centers with up to $20 MM for each center across the country. To obtain access to this funding
through the establishment of a local Ohio center, the Edison BioTechnology Center (EBTC) is leading
an assessment and business development project on behalf of the newly formed Ohio Information
Technology Alliance, an organization funded by the Ohio Department of Development (ODOD).
EBTC would like to determine whether the Ohio IT Alliance ought to establish a bioinformatics center
and if so, the best means by which the Center may promote its educational , research, and
technology development & commercialization objectives in the field of bioinformatics.
Commissioned by, and working closely with the EBTC, Ernst & Young LLP has conducted a study that
provides the fundamental content for a strategic business plan. This study included an overview of
the Bioinformatics field; an analysis of strengths and weaknesses in the Bioinformatics industry within
the state of Ohio; a summary of focused interviews with academic and industrial leaders in Ohio; a
roadmap to build-up a sustainable and differentiated Bioinformatics capability in Ohio through a
statewide Bioinformatics initiative; and a five-year financial model forecasting the revenue, Costs and
EBIT of the bioinformatics initiative, linked to a suit of Monte Carlo simulations run at several different
input (demand) levels. These financial models were based upon a set of surveys coordinated by the
EBTC that were sent to interview participants; their responses served as the backbone of the local
market research.
2
What is Bioinformatics?
Bioinformatics Integrates Data from Many Sources
Gene discovery
Drug design
• High-throughput genetic sequencing
• Genetic algorithm searches
• Genetic linkage studies
• Genetic maps
• Polymorphisms (SNPs)
• Computer-aided drug design and molecular
modeling
• High-throughput screening
• Structure-based drug design
• Small-molecule-compound libraries
• Virtual chemical libraries
Bioinformatics
Gene function
Drug development
• Gene chips and microarrays
• Gene expression profiles
• Functional genomics
• Proteomics
• Metabolic pathways
• Clinical trial data, efficacy data
• Pharmacokinetics
• Pharmacogenomics
• Pharmacogenetics
• Toxicology
• Patient data and medical informatics
Source: C&EN News, Ernst & Young analysis
4
Bioinformatics is a Multidisciplinary Field and Requires Cross-functional
Expertise
DATA GENERATION
HARDWARE BACKBONE
• Content Generation
• Tissue banks
• Genotyping
• Sequencing
• Preliminary profiling
• Sequence pattern detection
• Integration of sequencers and
analytical instrumentation
• Computer power
• Data transfer
• Data storage
• Security and privacy
Bioinformatics
DATA LEVERAGE
• Detecting translation codes
• Functionally mapping genotypes with phenotypes
• Ordering and structural mapping genes
• Modeling and Simulation of Gene Regulation
• Modeling and Simulation of Protein Interactions
• In Silico Drug Development
Source: Ernst & Young analysis
5
Representative Bioinformatics Companies (1/4)
DATA GENERATION – BIOTECH/GENOMICS COMPANIES
Company Name
Year Number of
Capital Raised ($MM)
Founded Employee Private
Public
Total
Business Description
Athersys
1994
50
$60.1
NA
$60.1
Engaged in the development of therapeutic products for the treatment
of significant and life threatening diseases. The company’s research
and development programs are focused on its two proprietary platform
technologies: RAGE (Random Activation of Gene Expression) and
SMC (Synthetic Microchromosome) vector system
Celera
1998
359
$330.0
$983.3
$1,313.3
Completed a draft version of the Human Genome on June, 2000, with
intent to supply high value-added genomic and proteomic data to the
life sciences collaborators. Celera has the world's most powerful highthroughput DNA sequencing capability.
CuraGen
1993
288
$191.3
$195.5
$386.8
Conducts project-driven genomic R&D for proprietary use and in
collaboration with life sciences partners. CuraGen offers collaborators
a variety of well-integrated databases, bioinformatics tolls and
services. Major collaboration includes Glaxo Wellcoma.
Exelixis
1995
168
$57.7
$126.0
$183.7
Key player in the field of functional genomics and comparative
genomics, performing target validation for the pharmaceutical industry
with technology that can also be applied to any industry that relies on
organisms, including agriculture and agrochemicals.
GeneLogic
1994
176
$30.2
$298.1
$328.3
Offers "GenExpress" gene expression database pruducts, and other
services to the life sciences industry.
Genome Therapeutics
1961
200
$2.1
$82.2
$84.3
Expertise in identifying and characterizing human genes associated
with major diseases and elucidate bacterial genes responsible for
many serious infectious diseases. Genome Therapeutics has a long
history of scientific excellence and has built a reputation as a top
genome sequencing facility, pioneering many of the tools and
techniques used in the genomics field today. Key alliances include
Astra and Schering-Plough.
Human Genome Sciences 1992
415
NA
$898
$898
Expertise in identifying and characterizing human genes associated
with major diseases and elucidate bacterial genes responsible for
many serious infectious diseases. Genome Therapeutics has a long
history of scientific excellence and has built a reputation as a top
genome sequencing facility, pioneering many of the tools and
techniques used in the genomics field today. Key alliances include
Astra and Schering-Plough.
Source: Oscar Gruss, Edgar's, Company website, Biospace.
6
Representative Bioinformatics Companies (1/4)
DATA GENERATION – BIOTECH/GENOMICS COMPANIES
Company Name
Year Number of
Capital Raised ($MM)
Founded Employee Private
Public
Total
Business Description
1991
900
NA
$757.2
$757.2
Provider of genomic information-based products and services. These
products and services include database products, genomic data
management software tools, microarray-based gene expression
services, genomic reagents and related services. Incyte focuses on
providing an integrated platform of information technologies designed
to assist pharmaceutical and biotechnology companies and academic
researchers in the understanding of disease and the discovery and
development of new drugs. Incyte's current products and services
include an integrated platform of genomic databases, data
management software tools, microarray-based gene expression
databases and services, and related reagents and services
Millennium Pharmaceuticals 1993
750
NA
$471.5
$471.5
MLNM is engaged in the commercial application of genetics, genomics
and bioinformatics to discover and develop a broad range of novel
therapeutic and diagnostic products. The Company seeks to discover
disease-related genes, produce validated drug targets and drug leads,
and develop new, proprietary drugs to treat major human illnesses.
Myriad Genetics
1991
300
$19
$100
$119
A genomics company focused on the development of therapeutic and
diagnostic products based on the discovery of major common human
disease genes and their biological pathways. The Company utilizes
analyses of extensive family histories and genetic material to identify
inherited gene mutations which increase the risk to individuals of
developing these diseases
Rosetta Inpharmatics
1997
150
$107.8
$116
$223.8
The Company innovates and integrates technologies in computational
and molecular biology. Integrated platform includes the design and
analysis of proprietary DNA microarrays, a powerful, flexible
informatics system, and advanced molecular biology techniques to
support gene expression profiling programs
Incyte
Source: Oscar Gruss, Edgar's, Company website, Biospace.
7
Representative Bioinformatics Companies (2/4)
DATA MANAGEMENT – GENOMICS / INFORMATICS FOCUSED COMPANIES
Company Name
Year Number of
Capital Raised ($MM)
Founded Employee Private
Public
Total
Ohio based
Business Description
Compugen
1993
120
$75.4
Private
$75.4
Leveraging expertise in computer hardware/software designed to
accelerate bioinformatics algorithms. Business model moving toward
an internet portal concept, plus proprietary and collaborative gene
discovery.
DoubleTwist.com
1993
NA
$66
$86.2
$152.2
An integrated genomics portal that provides a secure and
comprehensive technology platform to simplify and accelerate life
science discovery. Its research agents provide easy, point-and-click
bioinformatics capabilities and access to a wealth of data sources,
including its own annotated human genomic data.
eBioinformatics
1998
NA
$11.9
Private
$11.9
A spin-off from the Australian National Genomic Information Services,
eBioinformatics provides a variety of web-based bioinformatics tools
and databases.
Genomica
1995
NA
$36.1
$123.1
$159.2
Provides enterprise-wide bioinformatics systems and services.
Partnerships include AstraZeneca, Glaxo Wellcome, Park Davis and
PE biosystems.
Informax
1990
172
NA
$75
$75
Desktop and enterprise-wide bioinformatics products. Customer base
includes 60 pharmaceutical companies, 250 biotechnology companies
and 500 universities.
LabBook
1999
15
$10
Private
NA
Desktop based gene expression, sequencing and structural
visualization software provider. Targeted customers include
pharmaceutical and biotechnology companies, and universities.
Lion Bioscience
1997
210
$100
$178.6
$278.6
Netgenics
1996
NA
$47.1
Private
$47.1
Provides enterprise-wide bioinformatics systems and services. $100
million proprietary R&D collabarition with Bayer AG, largest
bioinformatics deal to date.
Provides entreprise-wide bioinformatics systems and services.
Partnerships include Pfizer, Abbott, Wyeth Ayerst and IBM.
Silicon Genetics
1998
5
NA
Private
NA
Tools for gene expression analysis and visualization with additional
capability in data mining applications.
Source: Oscar Gruss, Edgar's, Company website, Biospace.
8
Representative Bioinformatics Companies (2/4)
DATA MANAGEMENT – GENOMICS / INFORMATICS FOCUSED COMPANIES
Company Name
Year Number of
Capital Raised ($MM)
Founded Employee Private
Public
Total
Ohio based
Business Description
SpotFire
1996
NA
$25
Private
$25
Leading provider of decision analytics software solutions -- speeding
the discovery, development, manufacture, and marketing of products
across the extended enterprise. Product offerings increase the
productivity and decision making of individuals, and connect decisionmaking communities across all stages of the product life cycle.
Structural Bioinformatics
1996
34
$46.8
Private
$46.8
Bioinformatics tools and databases with a special focus on protein
structural information, critical to rational drug design.
Timelogic
1981
NA
NA
Private
NA
Specialized computer hardware/software designed to accelerate
bioinformatics algorithms. Confirgurable hardware architecture offers
competitive advantadge in some cases. Relationship with key
academic and industrial research groups, including Stanford
University, Roche, Bristol-Myers and Novartis.
Viakon
1999
NA
$3.7
Private
$3.7
Viaken Systems is the premier full service ASP (Application Service
Provider) for the life sciences, offering solutions for biotechnology,
pharmaceutical, and agricultural companies. Viaken hosts third-party
research informatics application solutions and e-commerce services in
the areas of genome informatics, chem informatics, and pharmaco
informatics at its tier one data center and delivers these services via
the Internet. The company’s unique ASP platform enables companies
of all sizes to utilize the same state-of-the-art research information
technology (IT) as implemented by top-tier organizations.
LeadScope
1997
NA
$9.4
Private
$9.4
The company develops and markets decision support tools
for use by life scientists engaged in drug discovery. The
products use proprietary algorithms to correlate structures
with computed and experimental data and to help scientists
find relationships hidden in the vast quantities of data being
generated. Additionally, LeadScope Inc.can provide
organizations with scientific expertise and knowledge of
informatics tools to assist with the analysis of proprietary
data from several phases of research including
combinatorial chemistry and high throughput screening.
Source: Oscar Gruss, Edgar's, Company website, Biospace.
9
Representative Bioinformatics Companies (3/4)
DATA MANAGEMENT – HARDWARE / INSTRUMENTATION COMPANIES
Company Name
Business Description
Agilent Technologies
Strategic collaboration with Rosetta Inpharmatics to
make and sell gene expression analysis systems,
including hardware and software.
Compaq
Major strategic alliance with Celera to provide
integrated bioinformatics hardware, software,
networking and services solutions.
IBM
IBM is conducting research into high value-added data
mining and protein structure determination methods.
IBM offers a variety of enterprise-wide IT solutions for
the life sciences market, and recently initiated a
collaboration with NetGenics.
Silicon Graphics
Offers visual computing and high-performance computer
systems. SGI systems support a wide variety of
bioinformatics software applications.
Sun Microsystems
Sun systems support a wide variety of bioinformatics
software applications.
PE Corporation
Instrumentation for high-throughput gene sequencing
Source: Oscar Gruss, Edgar's, Company website, Biospace.
1
Representative Bioinformatics Companies (4/4)
DATA LEVERAGE – CONSUMER GENETIC INFORMATION BASED COMPANIES
Company Name
Year Number of
Founded Employee
Capital Raised
Private
Public
Total
Business Description
DNA Sciences
1998
45
NA
Private
NA
Consumer genotype profiling. Offers customer the ability to identify de
novo new variance in the genome, has developed SNP data base as
foundation for SNP assay development. High-throughput genotyping
process.
deCode
1998
300
$128
$128
$356
deCODE genetics is a population-based genomics company based in
Iceland, that conducts research in the genetics of common diseases.
deCODE genetics' mission is to use human genetics and genomics to
acquire new knowledge about health and disease, and work with
pharmaceutical companies and healthcare providers to develop new
methods to identify, treat and prevent diseases.
Framingham Genomic
Medicine
2000
NA
$21
Private
$21
The company will use the heart study's vast collection of genetic,
clinical, and behavioral data from the 10,000 participants, all families
from Framingham, to create a huge electronic database.
Pharmaceutical and biotechnology companies are expected to pay
annual fees to access the treasure trove of medical information.
Genaissance
Pharmaceuticals
1999
113
$21
$78.0
$78.0
Commercializes population genomics and informatics to improve the
development, marketing and prescribing of drugs
Source: Oscar Gruss, Edgar's, Company website, Biospace.
1
Why Invest in Bioinformatics?
Precedents for Potential Returns for
Public and Private Investment
With the Completion of Human Genome Project, the Public Domain Is
Overloaded with Data
GenBank SEQUENCE GROWTH
( '0 0 0 )
4 ,8 6 5
5 0 0 0
4 5 0 0
4 0 0 0
3 5 0 0
2 ,8 3 8
3 0 0 0
2 5 0 0
1 ,7 6 6
2 0 0 0
1 ,0 2 1
1 5 0 0
5 5 6
1 0 0 0
1
2
4
6
1 5
1 0
2 1
5 6
4 0
2 9
7 9
1 4 3
2 1 5
5 0 0
0
GenBank BASEPAIR GROWTH
3 ,8 4 1
M illio n s
Draft completion
of Human
Genome Project
4 ,0 0 0
3 ,5 0 0
3.12 Billion
Base Pairs
3 ,0 0 0
2 ,0 0 9
2 ,5 0 0
2 ,0 0 0
1 ,1 6 0
1 ,5 0 0
652
1 ,0 0 0
1
2
3
5
8 4
8 5
10
16
24
35
49
72
101
157
217
385
500
0
8 2
8 3
8 6
8 7
8 8
8 9
9 0
9 1
9 2
9 3
9 4
Source: GenBank
1
9 5
9 6
9 7
9 8
9 9
6/2000
The Biotechnology Sector has Raised $11 Billion in Equity Financing in the
First Quarter of 2000, and is Well Positioned to Leverage this Information
Revolution
BIOTECHNOLOGY EQUITY FINANCING IN Q1, 2000
$ Millions
1,815
10,896
3,545
3,754
659
1,124
IPOs
Follow-ons
Venture Capital Public Company Convertible
Financing
Private Financing Financing
Source: Biospace
1
Total
Biotechnology Sector Has Raised $11 Billion in Q1 2000, More Than
3-Fold better than the Best Quarter of the Last Financing Boom in 1996.
37% of this Recent Financing was Bioinformatics Related
AVERAGE QUARTERLY FINANCING
12,000
10,896
Cash Inflow ($M)
10,000
8,000
Bioinformatics
Related
3x
37%
6,000
63%
4,000
3,500
Other Biotech
2,007
2,000
1,222
1,354
98
99
0
96
97
Qt1, 00
Year
Source: Ernst & Young 13th & 14th Annual Reports, Biospace.
1
The Aggregate Market Valuation Of the Genomics & Bioinformatics Sector
Increased 6-Fold From 1999 To 2000
This sector contributes significantly to the $2 Trillion market value of the global
pharmaceutical and biotechnology industries
MARKET VALUATION OF GENOMIC/BIOINFORMATICS COMPANIES
Aggregate Market Cap ($B)
200
??
180
• In ten years, > 90% of new drugs
entering development are poised for
design through the use of genomic
data
• The market valuation of genomic and
informatics related companies is
poised to exceed the current $60
billion level
• Genomic and bioinformatics may
contribute significantly to an
increasing proportion of the global
Pharma / Biotech industry.
160
140
?
120
100
80
60 B
60
6X
40
20
10 B
0
99
00
2010
Year
Source: CSFB
1
Opportunities and Strengths for
Bioinformatics in Ohio
Ohio has the potential to build a substantial presence in bioinformatics
Academic presence
• OSU has completed the functional annotation of human chromosome 22
• The James Cancer Center tissue bank can provide a unique set of genetic content
• The Cleveland Clinic is a leader in cardiovascular genetic research
• The University of Cincinnati Children’s Hospital Medical Center and OSU are among the first academic
institutions that have formed a partnership with bioinformatics leader Celera
• The supercomputer center within Ohio is among the best in the country
Industrial presence
• Existing life science companies can provide the leadership and experience to support the growth of the
bioinformatics industry in Ohio, including
– Battelle
– Cardinal Health
– Chemical Abstracts
– Digineer
– Gliatech
– Proctor & Gamble
– YSI Inc
– Integrex
• There are several vibrant start-up bioinformatics-related companies growing within Ohio, including
– Athersys
– LabBook
– LeadScope
– NetGenix
Government presence
• Wright-Patterson Air Force Base harbors an extensive research capability in computer graphics, simulation
• NASA Lewis
1
Composition of the Industrial landscape for the Life Sciences in Ohio
Number of Companies
Biotechnology
Bioinformatics
Academic Institution
8 3
15
Medical Devices
Medical / Clinical
23
17
40
7
Industrial Supplier
11
Reagent Supplier
11
Professional Services
6
Contract R&D
11
Contract Manufacturing
Industrial Services
Note: Certain companies and institutions were counted in multiple categories
Source: EBTC Web Site, Ernst & Young Analyses
1
Composition of the Industrial landscape for the Life Sciences in Ohio
Emerging Infrastructure to Support the Growth of a Bioinformatics Initiative
includes:
• Edison Program Incubators
Akron
Cincinnati
Dayton
Mansfield
Columbus
Toledo
Cleveland
Youngstown
• Edison Centers of Excellence
Ohio Information Technology Alliance
Edison Biotechnology Center
• Research Parks
BioPark, Cleveland
Science and Technology Center at the Ohio State University
• Seed capital funds at various stages in development
Technology Action Fund
Columbus
Appleseed Fund, Cleveland
BioVentures, Cincinnati
2
Strengths and Implications for the Development of a Bioinformatics Initiative
Strengths*
Implications
• “Supercomputer center is
one of (top) in the country”
• Substantial potential for the
processing of complex data
• “Rich data repositories
available from Chemical
Abstracts”
• Potential for high-value add
annotation on a systematic
basis
• “Tissue sources available
from clinical tissue banks”
• Targeted research can be
carried out on tissue-specific
disease states
• “Cost of living is low, while
standard of living is high”
• Potential for significant
employee recruitment and
retention
*Statements that were repeated the most in multiple independent interviews
Source: Company and institutional Interviews
2
Weaknesses and Challenges for
Bioinformatics in Ohio
2
Development of a bioinformatics industry in Ohio faces several challenges
Academic Challenges:
• Biology faculty need computational support to carry our bioinformatics research
• Individual labs require software development capabilities to permit research progress
• Universities require better coordination of shared resources to benefit all (avoid “Silos”)
• Faculty interested in Bioinformatics do not know of the research interests and skill sets of peers at other
Universities and institutions
• There is a duplication of effort for solving commonly encountered problems
– script writing for hardware instrumentation
– pattern detection algorithms
• Faculty drop or delay projects because of an inability to easily tap into bioinformatics resources
• Many universities do not provide the opportunities for students to study bioinformatics even though the
student demand is great
• Large Universities cannot fulfill the needs of all students
• Small Universities cannot rapidly develop courses on their own
• There is no leadership coordinating and supporting state-wide bioinformatics research
• Faculty seek collaborations outside of the state and often avoid internal collaborations
2
Development of a bioinformatics industry in Ohio faces several challenges
Industrial Challenges:
• The present industry structure is not suitable to support the rapid, scaleable
growth of the bioinformatics industry
• The current group of life science-related companies in Ohio are fragmented and their resources are
scarce, and thus they lack “critical mass”
• The lack of a local talent pool limits the growth of every company
– Out-of-state executive recruitment firms may lack the motivation to prioritize Ohio searches and cannot
realistically convey the local environment to potential recruits
– Executive and other searches may have a long turn-around time
• Local private funding sources often prefer to invest out-of-state
• This is due in part to the lack of local senior management, and large local networks
• Public-private partnerships are not focused on the bioinformatics industry
• The EBTC and other organizations are already resource-constrained, so additional expansion is
difficult
2
Weaknesses and Implications for the Development of a Bioinformatics Initiative
Weaknesses*
Implications
• “Relatively few funding sources for
seed and early stage capital”
(Venture Capital, Angel Investors)
• Entrepreneurship can be impeded
before innovative ideas reach a
mature proof of concept stage
• “Lack of formal bioinformatics
training in academic institutions”
• Insufficient pool of potential
employees with appropriate skills,
made more difficult by a lack of
local bioinformatics education
• “Limited pool of cross-trained and
experienced scientific staff and
entrepreneurial management”
• Emerging companies may become
constrained due to limitations on
human resources
• “Ohio does not have a culture of
inter-company collaborations such
as strategic alliances, and is often
insular in business dealings”
• Development of synergies
amongst different companies and
technology platforms are limited
*Statements that were repeated the most in multiple independent interviews
Source: Company and institutional Interviews
2
Approaches for Fostering
Bioinformatics in Ohio
2
Approaches to Fostering the Development of Bioinformatics in Ohio
Build Infrastructure for the Future, such as
• Education for training potential employees
• Public and Private funding sources for start-ups
• Research support for generation of IP
• Attraction of entrepreneurial senior management
• Local expertise in professional services to support
entrepreneurial companies
Leap-Frog Past the Competition
• Understand the current-state of the art
• Focus on targeting technologies “beyond this horizon”
2
Approaches to Fostering the Development of Bioinformatics in Ohio
Build Infrastructure for the Future
• Ohio must build a sustainable infrastructure to support the growth of its bioinformatics companies
Enabler: Ohio must support the development of future bioinformatics talent at all Universities
Solution: Introductory and advanced bioinformatics courses should close the gap among Universities of
different sizes and cover all regions of Ohio.
–
–
Team-taught courses that rotate from campus to campus.
Computer science for biologists; Biology for computer scientists.
• Ohio must help the industrial and academic communities to conduct efficient and timely research and
development which forms the backbone of future companies
Enabler: Shared services which provide cost-effective, expert knowledge support to all Universities and
Companies throughout Ohio
Solution: Efficient, centralized data hosting and management services to safely store rapidly growing
amounts of genomics and bioinformatics data
Solution: Responsive consulting service branch coordinated by the Bioinformatics Initiative tasked with
solving difficult technology challenges in short time periods
2
Approaches to Fostering the Development of Bioinformatics in Ohio
Build Infrastructure for the Future
• Ohio must build critical mass in local talent pool to support the growth of its bioinformatics companies
Enabler: Attracting talent to companies in Ohio helps to promote the success of these companies and
helps to brand Ohio as a bioinformatics center
Solution: Establish a local, focused recruitment network through a dedicated Recruiter
• Ohio must build a local base of funding to allow early-stage start-up companies to locally mature
Enabler: Ohio must support the development of emerging bioinformatics companies
Solution: Use any cash generated from the Bioinformatics Initiative to provide seed-stage funding for
local entrepreneurs in a hybrid public-private partnership.
• Ohio must expand its’ base of academic research and teaching to embrace and nurture bioinformatics
Enabler: Ohio should support the development of bioinformatics research and teaching at all
Universities
Solution: The State of Ohio should provide competitive levels of financial support for academic
research to fill gaps in Federal funding, and to support the expansion of University-level
teaching related to bioinformatics course content
2
Approaches to Fostering the Development of Bioinformatics in Ohio
Leap-Frog Past the Competition
The business strategy and research goals of entrepreneurial companies must be leap-frog beyond the
current state-of-the-art to avoid playing a doomed game of catch-up
• Focus on next-generation technology platforms:
– Functional annotation integrated with complex physiological data
– Functional annotation of the genomes of agricultural crops and other plants, for which Ohio
already has a leadership position in agricultural research
– Pattern detection and computational analyses of “polygenic” diseases (i.e. diseases for which
several genes together cause illness - cancer, diabetes, cardiovascular disease,…)
– Pharmacogenomics - the tuning of drug dosages and combinations to individual physiology
– Drug discovery based on the phenotyping of functional genomic content
– Diagnostic devices based upon genetic and genomic information
– Data-mining of patient records from longitudinal studies of chronic disease (i.e. cancer)
– Data-mining of plant genomes to identify targets for agro-biotechnology products (i.e. insect and
pesticide resistance, adaptation to environmental stress, nutritional content)
3
How to Build a Bioinformatics
Infrastructure in Ohio?
3
Overview of Proposed Approach: Five Parallel Bioinformatics Initiatives
Academic
Rotating Courses
Professional
Academic
Consulting Services
Industrial
Retained Search
Private-Public
Academic
Data Hosting
Industrial
Entrepreneurship
Private-Public
3
Enhance
Bioinformatics-based
Economic Development
for the State of Ohio
Overview of the Rotational Courses Program
What
• Bioinformatics is an
interdisciplinary field which
requires expertise both in
Biology and in Computer
Science.
• Current curriculum in Biology
has little or no computer
training, and Computer
Science students have little
Biology.
How
• Start with 10-faculty team:
- 8 academic
- 2 industrial
• 4 or more locations within the
state of Ohio, such as:
- Columbus
- Cleveland
- Cincinnati
- TBD
• 1 course per location
• A Biology course for
Computer Science students
and a Computer Science
course focused in
programming for Biology
students will provide the
required knowledge for these
two groups of students to do
joint Bioinformatics research
• 30 - 40 students per course
• Concurrent short training
courses for professionals
already in the work force
• Make it a significant honor for
faculty to participate
Impact
• Stimulate interdepartmental, interinstitutional and academicindustry collaborations
• Increased capability in
attracting federal grants
• Create statewide uniform
Bioinformatics curriculum
standard
• Produce high quality
Bioinformatics research
talent and skilled workforce
• Establish academic
reputation in Bioinformatics
and attract world class
Bioinformatics faculty and
entrepreneurs
• Improved course quality
3
Catching the Synergy of Rotational Course Programs
Rotational courses can foster cross-departmental and crossinstitutional collaborations, expand research, and attract new
faculty.
Inter-University
Rotating Courses
+
+
Attraction of
Bioinformatics
Faculty
+
+
Cross-Departmental,
Cross-Campus Research
Highly Trained
Bioinformatics
Talent
• Human Genome Annotation
• Agrigenomic Annotation
+
Expanding
Research
Activities
+
3
Overview of the Retained Search Program
What
• Bioinformatics is a relatively
new field, and a great
proportion of the talent
needed to help start-up
Bioinformatics activities
requires out-of-state import.
• There will be no less than a
two-year gap before Ohio can
produce enough locallytrained talent.
• Many leading Bioinformatic
academic and industrial
research groups are outside
the state
• Professional searching is the
most effective way to tap into
a national and global talent
pool.
How
• Start with 1 - 2 dedicated
executive recruiters who have,
or can rapidly develop, a
nationwide and global network.
• Conduct a national search to
identify and recruit a director
for the Bioinformatics initiative.
• Recruit post-doctoral students,
programmers, and technical
personnel to support the startup of a research and
consulting based
bioinformatics initiative.
• Help to recruit trained
Bioinformatics talent for Ohio
based Bioinformatics
companies from out-of-state.
• Executive recruiters are
compensated based on the
number and level of talent they
recruited.
3
Impact
• Allow a quick and
comprehensive search for
Bioinformatics talent which
will be critical to the launch
of the Bioinformatics
initiative.
• Tap into a nationwide talent
pool and allow an inflow of
fresh bioinformatics talent
at a national level.
• Talented people coupled
with new ideas and
infrastructure will create
new start-ups, and
stimulate economic growth
in Ohio.
• Talented people will
conduct cutting edge
research and create startup opportunities, which will
attract more Bioinformatics
talent from outside Ohio.
Catching the Synergy of Retained Search Programs
Retained searches carried out by a dedicated Ohio resource with
the knowledge of both the Ohio environment and the bioinformatics
industry will accelerate the filling of local human resource needs,
supporting business growth
+
Conduct
Retained
Searches
+
+
Expanded
Close Gap in
Business Re-investment Human Resources
Growth
from Revenues
+
Expanding
Business
Activities
3
+
Overview of the Consulting Services Program
What
• Bioinformatics is a relatively
new field that needs
knowledge and technical
knowhow in both Biology and
Computer Science
• Most Biologists need help in
programming and IT system
integration to leverage the
Bioinformatics revolution.
• The primary needs in
consulting services will be in
the area of commercial
software selection,
customized script writing, and
hardware-software
integration.
• Computer Science
departments studying
Bioinformatics problems will
need high level
Bioinformaticians to define &
solve these problems.
How
Impact
• Start with a group of 6 - 10
people including a world class
Bioinformatician (the director)
and support programmers.
• Help to start Bioinformatics
research for those who
couldn’t do so because of a
lack of domain expertise in
programming.
• Survey and codify existing
commercial software, and
make recommendations to
clients for their software
selection.
• Enhance the statewide
Bioinformatics capability to
a nationally competitive
level
• Write scripts and interface
software for clients to ensure
seamless integration.
• Collaborate with hard ware
and soft ware vendors, stay
current with the latest
developments in the
Bioinformatics service field.
• Generate group purchasing
power (e.g. for software and
hardware) over time.
3
• Generate revenue for the
Bioinformatics initiative.
• Drive future economic
growth in Ohio with
-new start-ups
-new spin-offs
-joint ventures
• Reduce research and
development costs for
academics and companies
through group purchasing
power.
Catching the Synergy of Consulting Activities
Consulting services will help to solve imminent critical problems fast
and help to launch new research and development. Clients could be
located in both Ohio and in other areas (avoid an insular focus).
+
Increased
Need for
Consulting
+
Expanded
Business
Opportunities
Engage in
Bioinformatics
Consulting
Projects
+
Revenues,
Royalties, &
Equity lead to
Reinvestment
+
Solve Critical
Technical Challenges
• Hardware Interfaces
• Data Management
• Detection Algorithms
+
+
Increased
Bioinformatics
Productivity
3
Approach to Financial Modeling
• Participants in the original interviews carried out for this project were asked to
answer to a set of survey questions by email related to the financial modeling
• In particular, respondents were asked to estimate their potential use of
• rotational courses (students interested in courses, courses per location)
• consulting services (hours to be purchased, acceptable billing rates)
• data hosting (data storage needs, data transfer needs)
• The answers to these questions were tabulated and averaged and the averages
used as line item inputs into the financial models which are described in the appendix
• The financial models showed cash-flow positive results from Year One.
• While this cash flow may be unusual for start-up businesses in Ohio, these values
follow directly from participants specific responses. Further, the framework for the
financial modeling is itself conservative and based on industry precedents.
3
Summary of Financial Modeling
(data in $000)
Revenue
Rotational Courses*
Executive Search
Consulting services*
Hosting*
Year 1
399.2
202.5
2,089
1,719
Year 2
466.2
341.6
2,891
2,026
Year 3
569.1
491.6
3,923
2,267
Year 4
701.8
653.0
4,916
2,558
Year 5
873.4
826.5
6,631
2,842
Costs
Rotational Courses
Executive Search
Consulting services
Hosting
80.00
169.0
676.0
1,364
88.00
175.8
831.5
792.3
96.80
365.6
1,026
1,135
106.5
380.2
1,250
1,583
117.1
395.4
1,475
2,177
EBIT
Rotational Courses*
Executive Search
Consulting services*
Hosting*
317.5
33.5
1,379
443.7
381.8
165.9
2,052
1,231
475.0
126.0
2,834
1,140
587.8
272.8
3,864
974.1
747.2
431.1
5,327
680.3
Total
2,174
3,830
4,575
5,699
7,186
-
*These output values represent the 50th percentile within a population of values derived from 1000 Monte Carlo simulations.
For the Monte Carol simulations, certain input values were established through Ohio respondents’ answers to a set
of survey questions related to the financial modeling (see appendix).
4
Steps to Building a Bioinformatics
Infrastructure in Ohio
4
Potential Pit-Falls to Fostering the Development of Bioinformatics in Ohio
Focusing Soley on Short-Term Gain
• Bioinformatics is an inherently complex area and requires substantial support from multiple scientific
fields
• Time is required to build critical mass, focus on long-term growth
Focusing on Current Competitors
• Companies in other regions (i.e. Celera in MD, Incyte in CA) have enormous head-starts and several
hundred million dollars of funding supported by ample infrastructure and talented staff.
• Companies in Ohio cannot compete with Celera and Incyte in a head-to-head contest: Do not try to
emulate these companies without a distinct and sustainable competitive advantage
Seeking Out Artificial Deals
• Partnerships cannot be forced between private companies without clear value to all parties; people
need to get to know each other and appreciate their mutual value to one another
• Academic and Industrial labs have different priorities and work at different time scales
Constraining Strategy to Historical Trends
• Leadership and vision require looking beyond past and current business models
• Incremental changes yield incremental results.
• Boldness requires the acceptance of risk.
4
Considerations for a Strategic Roadmap for the Bioinformatics Initiative
• Given scarce resources and a limited time to establish credibility, need a
targeted and highly focused approach to any bioinformatics initiative
• Given the need to build a brand based on core strengths, need to identify
areas where Ohio could make a distinctive and potentially unique contribution
• Clear, defensible roadmap with no false starts and stops, leading to a oneway migration towards the building of a statewide bioinformatics initiative
• Accepted and defined metrics for success to monitor progress and detect
nascent blockages
• Need a common view of collaborative and shared service issues, based on
both open discussions, both internal and external
• A “big project” with high visibility success might pull people together and
improve both the internal and external perception of the State of Ohio regarding
bioinformatics
• Highly articulated roles and responsibilities of different institutions and companies
within different regions of Ohio
4
Strategic Roadmap for the Bioinformatics Initiative
Bioinformatics
Initiative
Year One
Year Two
Year Three
Year Four
Year Five

-




-
-
Consulting
Services
Hire total headcount of 7:
One Director
One Business Development
Associate
Two Post-doctoral Students
Two Programmers
One Support Staff

Win One Grant

Recruit 30 Members

Increase headcount by
hiring:
-


One Additional Business
Development Associate
One Additional Post-doctoral
Student
Win Two Grants
Recruit 6 Additional Members
Increase headcount by
hiring:
- One Additional Post-doctoral

Win Three Grants

Recruit 16 Additional
Members
Acquire a total of 12
academic & 5 industrial
clients; use 3 consultants*

Acquire an Additional Set of 4
academic & 2 industrial clients;
use 4 consultants



Serve each academic client
with 30 hours per year

Serve each industrial client
with 674 hours per year


Serve each academic
client with 28 hours per
year

Serve each industrial
client with 613 hours per
year
Acquire an Additional Set of
4 academic & 1 industrial
clients; use 6 consultants
Serve each academic client
with 33 hours per year

Development Associate
One Additional Post-doctoral
Student
One Additional Support Staff
Win Four Grants
-
Recruit 16 Additional
Members
 Acquire an Additional
Set of 6 academic & 3
industrial clients; use 9
consultants

Win Five Grants

Recruit 22 Additional
Members

Acquire an Additional
Set of 8 academic & 3
industrial clients; use 13
consultants
Serve each academic
client with 37 hours per
year

Serve each industrial
client with 815 hours per
year
 Buy 63 Additional Servers
 Hire One Additional
Support Staff
 Host 26 clients data, with
1997 GB per client


Rotational
Courses


Recruit 10 faculty
Host 8 rotating courses
with 35 students per
course, in four locations
 Host 2 Professional
Courses


Recruit 10 faculty
Host 8 rotating courses with
37 students per course, in
four locations
 Host 2 Professional Courses


Recruit 10 faculty
 Recruit 10 faculty
Host 10 rotating courses with  Host 10 rotating courses
38 students per course, in
with 40 students per
five locations
course, in five locations
 Host 2 Professional Courses  Host 2 Professional
Courses


Search
Program









Venture
Activities




Hire One Executive
Recruiter and One
Support Staff
Recruit Two Executives
Recruit Five Ph.D. Staff
Recruit Five Post-docs
Host Two Professional
Valuation and
Investment workshops

Bioinformatics Center
Recruit Four Executives
Recruit Seven Ph.D. Staff
Recruit Seven Post-docs
Provide seed funding to startup bioinofmatics ventures
 Apply for DARPA, ATO-NIST,




4
Hire One Additional
Executive Recruiter and
One Support Staff
Recruit Six Executives
Recruit Nine Ph.D. Staff
Recruit Nine Post-docs
Provide seed funding to
start-up bioinofmatics
ventures




Bioinformatics Center
Recruit Eight Executives
Recruit Eleven Ph.D. Staff
Recruit Eleven Post-docs

Provide seed funding to
start-up bioinofmatics
ventures
Serve each academic
client with 40 hours per
year
Serve each industrial
client with 897 hours
per year
 Buy Additional 138
Servers
 Hire One Additional
Support Staff
 Host 34 clients data, with
2196 GB per client


-
Student
One Additional Programmer


Serve each industrial client
with 741 hours per year
Buy 21 Additional Servers
 Buy 77 Additional Servers
Hire One Additional Support
 Hire One Additional Support
Staff
Staff
 Host 16 clients data, with 1650  Host 20 clients data, with
GB per client
1815 GB per client
Increase headcount by
hiring:
- One Additional Post-doctoral
Build Data Server Center
Build T-1 Access
Buy 48 Servers
Hire One Support Staff
 Host 12 clients data,
with 1500 GB per client
Data Hosting

Student
One Additional Programmer
Increase headcount by
hiring:
- One Additional Business
Recruit 10 faculty
Host 10 rotating courses
with 41 students per
course, in five locations
 Host 2 Professional
Courses
Bioinformatics Center
Recruit Ten Executives
Recruit Eleven Ph.D.
Staff
 Recruit Thirteen Postdocs
 Provide seed funding to
start-up bioinofmatics
ventures
*Consulting staff will be drawn as appropriate
from the group of post-doctoral associates.
Overview of Proposed Organizational Structure
Year One
ODOD
Director of
Bioinformatics
Initiative
Business
Development
Associate (1)
Electable
Administrative
Staff (1)
Post-Doctoral
Associates (2)
Out-sourced
Legal and
Consulting
Software
Developers*
(2)
OSC
*Joint appointment with OSC
4
Advisory Board
Overview of Proposed Organizational Structure
Year Two
ODOD
Director of
Bioinformatics
Initiative
Business
Development
Associate (2)
Electable
Administrative
Staff (1)
Post-Doctoral
Associates (3)
Out-sourced
Legal and
Consulting
Software
Developers
(2)
OSC
*Joint appointment with OSC
4
Advisory Board
Overview of Proposed Organizational Structure
Year Three
ODOD
Director of
Bioinformatics
Initiative
Business
Development
Associate (2)
Electable
Administrative
Staff (1)
Post-Doctoral
Associates (4)
Out-sourced
Legal and
Consulting
Software
Developers
(3)
OSC
*Joint appointment with OSC
4
Advisory Board
Overview of Proposed Organizational Structure
Year Four
ODOD
Director of
Bioinformatics
Initiative
Business
Development
Associate (3)
Electable
Administrative
Staff (2)
Post-Doctoral
Associates (5)
Out-sourced
Legal and
Consulting
Software
Developers
(3)
OSC
*Joint appointment with OSC
4
Advisory Board
Overview of Proposed Organizational Structure
Year Five
ODOD
Director of
Bioinformatics
Initiative
Business
Development
Associate (3)
Electable
Administrative
Staff (2)
Post-Doctoral
Associates (6)
Out-sourced
Legal and
Consulting
Software
Developers
(4)
OSC
*Joint appointment with OSC
4
Advisory Board
Defining Success for a Bioinformatics
Initiative in Ohio
5
Aggregate Definitions of Success for a Bioinformatics Initiative*
• “Keep smart highly trained people in the state of Ohio, supporting emerging companies”
• “Serve as a magnet to draw people into the state of Ohio, resulting in high-paying,
high-tax generating revenues”
• “Serve as an aggregation function for general business development”
• “Coordinate and integrate independent discoveries”
• “Raise the profile of Ohio as a bioinformatics area and as a nexus for high technology”
• “Create a critical mass to attract federal funds to establish a genome center”
• “Convince venture capital firms and other investors to invest in Ohio-based start-ups”
• “Establish scientific credibility for long-term success through research grants and
high profile publications”
• “Ensure that there is broad participation from universities, companies, and research
institutions throughout Ohio.”
*Statements that were repeated the most in multiple independent interviews
Source: Company and institutional Interviews
5
Catching the Synergy of the Bioinformatics Initiatives
Product
Royalties
Equity
+
+
+
+
Net Revenue
Streams from
Bioinformatics
Initiatives
+
Increased
Internal Seed-Stage
Participation
Capital for Venture
+
in Bioinformatics
Investments
Re-investment
Initiatives
• Equity Participation
from Revenues • Royalty Agreements
+
+
+
Expanded
Entrepreneurial
Activities
Venture
Capital
+
External Venture
Investments
• 15+ Private Venture Funds
5
+
Equity
Implications of Success for the Public-Private Partnerships
Public investment can lead to private returns:
• Incubators and Technology Support Centers - can catalyze entrepreneurship
• Tax Savings Programs - can attract new business to Ohio
• Educational System Enhancements - provide graduates with critical talent to companies
Private investment can lead to public returns:
• Job Creation - Higher employment levels stimulate further economic growth
• Tax Base - Increases in tax revenues can fund further economic development programs
• Further Attraction of Investors - Success breeds success, increasing investor interest
5
Implications of Success for Success in Federal Grant Applications
The bioinformatics initiative can build the infrastructure to attract Federal funding:
• Hiring a World-Class Director provides a cutting-edge research focus for grant applications
• Building Inter-University and Inter-Departmental Collaborations strengthens the collective
scientific skill set required for successful funding in bioinformatics
• Research Program Enhancements - provide assurance to granting agencies that their
funds will be well-used
Ohio should target building the infrastructure that promotes effective use of federal funds:
• Understand the issues and concerns of federal agencies disbursing federal funds
• Quality of Scientific Research
• Principal Investigators
• Post-Doctoral Fellows
• Graduate Students
• Quality of Resources Supporting Research
• Access to Critical Scientific Instrumentation
• Access to Computational Resources
• Demonstrate that these concerns have been addressed at a state-wide level
5
Implications of Success for the Stakeholders of the Bioinformatics Initiative
LabBook
Battelle
Digineer
Corporations
$$
NetGenics
LeadScope
ChemAbstracts
Importing
Capital
Education
Universities
Research
ODOD
Success
Economic
Development
Attracting
Companies
Work-Force
Development
Educational
Mission
Ohio Board
of Regents
Bioinformatics
Coursework
Federal Institutions
Ohio
Supercomputer
Center
5
NIH
Sponsored
Research
NSF
Sponsored
Research
Appendices
5
Bioinformatics Business Models
Representative Cases
Representative Bioinformatics Business Model
Incyte Pharmaceuticals
– Informational Products:
LifeSeq - Human Gene Sequence (FL, Genome, SNP) &
Expression Databases, Data-Mining /Bioinformatics
Software (3D), Gene Mapping (Atlas)
Subscription Fees
- Recurring Basis
- Upgrade Strategy
+
Licensing Fees
- Collaborative Research
- Downstream Royalties
– Biological Products:
Product Sales
- Broad Inventory Needs
- Relatively Low Volume
– Consulting Services:
ZooSeq - Animal Gene Sequence & Expression Databases
PhytoSeq - Plant Gene Sequence & Expression Databases
PathoSeq (PD)- Microbial Gene Sequence Databases
LifeProt - Proteomic Sequence Databases
Bulk Clones - Gene Albums
Boutique Clones - Clone Transfer Services
Microarrays - GEM, Human UniGem, GEM Tools Analysis
Applications
Life Tools - Data Management System, Project Manager,
Analysis, EST Dataflow, Genomic Dataflow)
Time and Materials
Customized Services from Genome Systems -
- Highly Trained Staff
- Relatively Low Leverage
sequencing, robotics, DNA preparation, knockouts, &
Fluorescence In Situ Hybridization (FISH).
Source: Incyte website, BioWorld.
5
Bioinformatics Companies Use Different Business Model To Sell Both Tools
And Solutions To End Users
BUSINESS MODEL FOR BIOINFORMATICS COMPANIES
Subscription
Fees
Software
Licensing
Fees
Internet
based
ASPs
•Celera charges $5 - $15 million per year to companies who want access to its
database
•Gene Logic offers a subscription to its large-scale GeneExpress database on a
multiple year basis and charges between $3 and $5 million annually
•Geneva Bioinformatics offers Internet access of SIB’s Swiss-Prot protein database
and charges either a few thousands dollars per user or up to $90,000 per year for
unlimited usage
•Small packages, such as Silicon Genetics’ GeneSpring software are sold for $20,000
per copy
•Large software packages are sold for hundred of thousands dollars per user seat
•Customized software is sold for millions of dollars
•eBioinformatics offers a pay-as-you-use model through the Internet. Individual user is
charged by eBio units at 50 cents per unit, and an active user can use 1,000 units
per year
•Double Twist operates an Internet-based research portal and offers three level of
access. Bronze provides limited access for free, silver and gold level access provides
additional tools and a proprietary database. Low-demand users spend $500 for
certain analyses, and heavy users might pay a few thousands dollar per “seat” per
analysis.
Source: Ernst & Young analysis; C&EN News, Company Websites
5
Questionnaires
6
- -Academic Questionnaire - Dear Participant,
Thank you for your participation in our ongoing strategic study to determine the best course of action regarding the potential
creation of a bioinformatics initiative. Based on our interviews with you, we have sketched out several possible approaches
that may contribute to your research and development efforts. So that we may continue to incorporate your views and insights
into our planning process, we would appreciate it if you could take a few moments to complete and return by email this brief
questionnaire. Your involvement at this stage is critical and we appreciate your time!
Idea #1 – Develop a set of rotating courses to be staffed by faculty from multiple universities and whose location changes from
campus to campus within the state of Ohio. Two courses are proposed: one which introduces computer science to biologists,
and one which introduces biology to computer scientists. To that end:
(1) How many students do you feel could be recruited to participate in a semester-long introductory course in bioinformatics at
your campus?
Low Estimate - ___________High Estimate - ___________
(2) How many of these classes do you feel could be conducted per year on a state-wide basis?
Low Estimate - ___________High Estimate - ___________
Idea #2 – Develop a shared service bioinformatics consulting group to provide technical programming and software
development support for your research programs. This service would be available to all institutions in the State of Ohio. To that
end:
How many hours of bioinformatics / computer consulting would you be willing to pay for on an annual basis?
- In your lab:
Low Estimate - ___________High Estimate - ___________
- In your University:
Low Estimate - ___________High Estimate - ___________
6
- -Academic Questionnaire - What price would you be able to afford for premier consulting services on-site and customized to your needs? (Note:
Professional service firms traditionally charge between 125 and 600 $ per hour)
75$ / hour? Yes
or
No
100$ / hour? Yes
or
No
125$ / hour? Yes
or
No
Other Rate? Yes
or
No
Rate ($/hour) _______
Idea #3 – We are considering the utility of establishing a data storage and management service for you. As bioinformatics
data increases in volume, this might assist in the coordination of data to serve your research needs. To that end:
How many gigabytes of data per year would you consider storing on a safe, secure host server?
- In your lab:
Low Estimate - ___________High Estimate - ___________
- In your University:
Low Estimate - ___________High Estimate - ___________
How much bandwidth (Gigabytes / day) would you estimate you would require on a daily basis to manage this amount of
data? This would include transferring data to and from the host server.
- In your lab:
Low Estimate - ___________High Estimate - ___________
- In your University:
Low Estimate - ___________High Estimate - ___________
Thank you for your participation! We appreciate your interest in this initiative and we will keep you updated!
6
- - Industry Questionnaire - -
Dear Participant,
Thank you for your participation in our ongoing strategic study to determine the best course of action regarding the potential
creation of a bioinformatics initiative. Based on our interviews with you, we have sketched out several possible approaches
that may contribute to your research and business development efforts. So that we may continue to incorporate your views
and insights into our planning process, we would appreciate it if you could take a few moments to complete and return by
email this brief questionnaire. Your involvement at this stage is critical and we appreciate your time!
Idea #1 – Develop a set of rotating courses to be staffed by faculty from multiple universities and whose location changes from
campus to campus within the state of Ohio. Two courses are proposed: one which introduces computer science to biologists,
and one which introduces biology to computer scientists. To that end:
Would you support the development of this course through having your scientific staff give a guest lecture?
Yes
or
No
Idea #2 – Develop a shared service bioinformatics consulting group to provide technical programming and software
development support for your business. This service would be available to all businesses and academic institutions in the
State of Ohio. To that end:
How many hours of bioinformatics / computer consulting would you be willing to pay for on an annual basis?
Low Estimate - ___________High Estimate - ___________
What price would you be able to afford for premier consulting services on-site and customized to your needs? (Note:
Professional service firms traditionally charge between 125 and 600 $ per hour)
75$ / hour? Yes
or
No
100$ / hour? Yes
or
No
125$ / hour? Yes
or
No
Other Rate? Yes
or
No
Rate ($/hour) _______
6
- - Industry Questionnaire - Idea #3 – We are considering the utility of establishing a data storage and management service for you. As bioinformatics
data increases in volume, this might assist in the coordination of data to serve your research needs. To that end:
How many gigabytes of data per year would you consider storing on a safe, secure host server?
- In your lab:
Low Estimate - ___________High Estimate - ___________
- In your University:
Low Estimate - ___________High Estimate - ___________
How much bandwidth (Gigabytes / day) would you estimate you would require on a daily basis to manage this amount of
data? This would include transferring data to and from the host server.
- In your lab:
Low Estimate - ___________High Estimate - ___________
- In your University:
Low Estimate - ___________High Estimate - ___________
Thank you for your participation! We appreciate your interest in this initiative and we will keep you updated!
6
Financial Models
6
Rotational course
2001
REVENUE
COSTS
EBIT
$
$
$
344,000
80,000
264,000
2002
$
$
$
411,648
88,000
323,648
2003
$
$
$
528,955
96,800
432,155
2004
$
$
$
637,949
106,480
531,469
2005
$
$
$
878,759
117,128
761,631
REVENUE
Courses
Tuition
Student Course
CS for Biologists
# students per location - LOW
# students per location - AVE
# students per location - HIGH
# Locations - LOW
# Locations - AVE
# Locations - HIGH
# Courses per Location
Fee Per Course per student
COSTS
$
Inflation factor
Expansion factor
Total Fees for CS for Biologists
Biology for CS
# students per location - LOW
# students per location - AVE
# students per location - HIGH
# Locations - LOW
# Locations - AVE
# Locations - HIGH
# Courses per Location
Fee Per Course per student
24
38
61
4
7
10
1
1,082 $
27
40
67
4
7
11
1
1,125 $
29
41
73
4
8
12
1
1,170
4%
4%
4%
4%
4%
10%
10%
10%
10%
257,619.35
252,194.05
396,372.65
Labor
# Faculty
Academic
Industrial
10
8
2
Percentage of Academic
# Lectures per person
Average salary per lecture per person$
Total labor cost
$
Burden
Burden rate (overhead+materials)
Fully burdened labor cost
452,994.29
10
8
2
10
8
2
10
8
2
10
8
2
80%
80%
80%
80%
20
400 $
64,000 $
20
440 $
70,400 $
20
484 $
77,440 $
20
532 $
85,184 $
25%
25%
25%
80%
20
586
93,702
25%
25%
$
80,000
$
88,000
$
96,800
$
106,480
$
117,128
$
340,265
$
315,148
$
397,263
$
627,887
$
812,386
EBIT
$
Expansion factor
Professional Course
# students per location
# Locations
# Courses per Location
Fee Per Course per student
Total professional course fees
Total course fees
22
37
55
3
6
9
1
1,040 $
10%
261,159.66
Inflation factor
Total Fees for Biology for CS
Total student course fees
20
35
50
3
6
8
1
1,000 $
20
35
50
3
6
8
1
1,000 $
24
38
61
4
7
10
1
1,082 $
27
40
67
4
7
11
1
1,125 $
29
41
73
4
8
12
1
1,170
4%
4%
4%
4%
4%
10%
10%
10%
10%
10%
129,090.09
$
$
$
22
37
55
3
6
9
1
1,040 $
174,237.69
30
2
1
1,000 $
60,000 $
189,090 $
256,842.00
30
2
1
1,100 $
66,000 $
240,238 $
292,666.75
35
2
1
1,210 $
84,700 $
341,542 $
452,256.26
40
2
1
1,331 $
106,480 $
399,147 $
50
2
1
1,464
146,410
598,666
Materials
Student course
CS for Biologists
Fee Per Course per student
Total Fees for CS for Biologists
Biology for CS
Fee Per Course per student
Total Fees for Biology for CS
Total student material fees
Professional Course
Fee Per Course per student
Total professional material fees
Total material fees
Grants
Curriculum development grant
Total revenue
$
100
27,660.19
$
110
27,555.05
$
121
33,865.14
$
133
42,578.53
$
146
39,266.86
$
100
18,249.33
45,910
$
$
133
47,151.80
89,730
$
$
121
19,843.19
53,708
$
$
110
23,955.42
51,510
$
$
$
146
72,454.85
111,722
$
$
$
150
9,000
54,910
$
$
$
165
9,900
61,410
$
$
$
182
12,705
66,413
$
$
$
200
15,972
105,702
$
$
$
220
21,962
133,683
$
$
100,000
344,000
$
$
110,000
411,648
$
$
121,000
528,955
$
$
133,100
637,949
$
$
146,410
878,759
Note: Aggregated results from the preceding questionnaires
were used to set the lower, average, and upper boundaries
for Monte Carlo simulations of this financial model.
COSTS
Labor
6
Retained Recruit Search
2001
REVENUE
COSTS
EBIT
Executive Management
# Industrial Executive Recruits
Average Commision percentage/Recruit
Average Salary/Recruit
Toal Executive Industrial Commision
$ 202,500
$ 169,000
$ 33,500
Cost
Labor
Headcount
# Executive Recruiters
# Support Staff
Average Salary
Executive Recruiter
Support Staff
2005
$ 826,505
$ 395,412
$ 431,093
6
25%
162,240
243,360
8
25%
168,730
337,459
10
25%
175,479
438,697
4%
4%
4%
4%
4%
5
25%
70,000
87,500
7
25%
72,800
127,400
9
25%
75,712
170,352
11
25%
78,740
216,536
13
25%
81,890
266,143
4%
4%
4%
4%
4%
5
25%
32,000
40,000
7
25%
33,280
58,240
9
25%
34,611
77,875
11
25%
35,996
98,988
13
25%
37,435
121,665
Inflation Factor
Total Recruit Commision
2004
$ 652,984
$ 380,204
$ 272,780
4
25%
156,000
156,000
Inflation Factor
Postdoctoral Fellows
# Industrial Postdoctoral Recruits
Average Commision percentage/Recruit
Average Salary/Recruit
Total Postdoctoral Commision
2003
$ 491,587
$ 365,581
$ 126,006
2
25%
150,000
75,000
Inflation Factor
Ph.D. Level-Staff Scientist Management
# Industrial Staff Recruits
Average Commision percentage/Recruit
Average Salary/Recruit
Total Staff Industrial Commision
2002
$ 341,640
$ 175,760
$ 165,880
4%
4%
4%
4%
4%
202,500
341,640
491,587
652,984
826,505
1
1
1
1
2
2
2
2
2
2
100,000
30,000
104000
31200
108160
32448
4%
4%
4%
Inflation Factor
112486.4 116985.86
33745.92 35095.757
4%
4%
Burden
Burden rate (overhead+materials)
Total Labor Cost
EBIT
30%
30%
30%
30%
30%
$169,000
$175,760
$365,581
$380,204
$395,412
$ 33,500
6
$ 165,880
$ 126,006
$ 272,780
$ 431,093
# Academic Clients
# Industrial Clients
Per hour Academic Billing Rate - LOW
Per hour Academic Billing Rate - AVE
Per hour Academic Billing Rate - HIGH
Per hour Industrial Billing Rate - LOW
Per hour Industrial Billing Rate - AVE
Per hour Industrial Billing Rate - High
# Consultants
Utilization Rate - Adademic Consulting
Utilization Rate - Industrial Consulting
Annual Billable Hours Per Client - Academic Consulting - LOW
Annual Billable Hours Per Client- Academic Consulting - AVE
Annual Billable Hours Per Client - Academic Consulting - HIGH
Annual Billable Hours Per Client - Industrial Consulting - LOW
Annual Billable Hours Per Client - Industrial Consulting - AVE
Annual Billable Hours Per Client - Industrial Consulting - HIGH
Annual Academic Consulting Revenues
Annual Industrial Consulting Revenues
Total Annual Consulting Revenues
$
$
$
Inflation factor
Expansion factor
12
5
75
88
100
125
613
1,100
3
5%
10%
10
25
40
125
613
1100
38,807 $
1,693,071 $
1,731,879 $
4%
10%
14
6
78
91
104
130
637
1,144
4
10%
15%
11
28
44
138
674
1210
39,660 $
687,243 $
726,903 $
4%
10%
16
7
81
95
108
135
662
1,190
5
15%
20%
12
30
48
151
741
1331
21,192 $
1,566,577 $
1,587,769 $
4%
10%
18
8
84
98
112
141
689
1,237
6
20%
25%
13
33
53
166
815
1464
99,896 $
6,290,791 $
6,390,686 $
21
9
88
102
117
146
717
1,287
8
25%
30%
15
37
59
183
897
1611
117,442
6,724,560
6,842,002
4%
10%
4%
10%
Membership
# Premium
5
6
7
8
10
# Silver
15
20
25
30
30
# Basic
10
10
20
30
50
Total Members
30
36
52
68
90
Per Member Fee
Premium
Silver
Basic
$
$
$
Inflation factor
Membership Fees
Premium
Silver
Basic
Total Membership Fees
Workshops
# Workshops Per Year
# Participants Per Workshop
Fee Per Participant
Total Workshop Fees
Total Revenue
5,000
500
100
$
$
$
4%
$
$
$
$
$
$
$
$
25,000
7,500
1,000
33,500
2
15
3,000
90,000
2,055,379
5,200
520
104
$
$
$
4%
$
$
$
$
$
$
$
$
31,200
10,400
1,040
42,640
2
17
3,120
106,080
1,275,623
5,408
541
108
$
$
$
4%
$
$
$
$
$
$
$
$
37,856
13,520
2,163
53,539
2
19
3,245
123,302
2,364,611
5,624
562
112
$
$
$
4%
$
$
$
$
$
$
$
$
44,995
16,873
3,375
65,242
2
20
3,375
134,984
7,390,912
5,849
585
117
4%
$
$
$
$
$
$
$
$
58,493
17,548
5,849
81,890
2
22
3,510
154,421
8,178,313
COSTS
Labor
Headcount
# Directors
# BD Associates
# PostDocs
# Programers
# Support Staff
7
1
1
2
2
1
9
1
2
3
2
1
11
1
2
4
3
1
14
1
3
5
3
2
16
1
3
6
4
2
Average Salary
Inflation Factor
Director
BD Associate
PostDoc
Programer
Support Staff
Salary Total
Burden
4%
$
$
$
$
$
$
200,000
60,000
35,000
80,000
30,000
520,000
$
$
Burden rate (overhead+materials)
Total labor cost
EBIT
4%
$
$
$
$
$
$
208,000
62,400
36,400
83,200
31,200
639,600
676,000
$
1,379,379
$
30%
6
4%
$
$
$
$
$
$
216,320
64,896
37,856
86,528
32,448
789,568
831,480
$
444,143
$
30%
4%
$
$
$
$
$
$
224,973
67,492
39,370
89,989
33,746
961,759
1,026,438
$
1,338,173
$
30%
4%
$
$
$
$
$
$
233,972
70,192
40,945
93,589
35,096
1,134,763
1,250,286
$
1,475,192
6,140,626
$
6,703,122
30%
30%
Note: Aggregated results
from the preceding
questionnaires were
used to set the lower,
average, and upper
boundaries for Monte
Carlo simulations of this
financial model.
Hosting Services
2001
REVENUE
COSTS
EBIT
$
$
1,754,964
1,364,000
390964
2002
$
$
2,055,411
792,320
1263091
2003
$
$
2,314,646
1,135,339
1179307
2004
$
$
1,891,983
1,583,112
308871
2005
$
$
3,385,914
2,177,217
1208696
REVENUE
Hosting Service Fees
# Academic Clients
Storage
Average Annual Storage (GB) - LOW
Average Annual Storage (GB) - AVE
Average Annual Storage (GB) - HIGH
Annual Storage Fee per GB
Annual Storage Fee Revenues
Data Transfer
Average Annual Data Transfer (GB) - LOW
Average Annual Data Transfer (GB) - AVE
Average Annual Data Transfer (GB) - HIGH
Data Transfer Fee per GB per year
Annual Data Transfer Fee Revenues
12
$
1000
1500
2000
1,200 $
1754802
0.1
1.6
3.0
199
162
Inflation factor
Expansion Factor
Total Revenue
16
$
20
1100
1650
2200
1,224 $
2055024
0.1
1.7
3.3
203
388
26
1210
1815
2420
1,248 $
2314358
0.1
1.9
3.6
207
288
34
1331
1997
2662
1,273 $
1891279
0.1
2.1
4.0
211
704
1464
2196
2928
1,299
3385318
0.1
2.3
4.4
216
596
2%
2%
2%
2%
2%
10%
10%
10%
10%
10%
1,754,964
$
2,055,411
$
2,314,646
$
1,891,983
$
3,385,914
COSTS
Labor
Material / Hardware
Annual Access Fee to High-Speed T1 Line
Server Hardware
Labor / Support Staff
Number of Support Staff
Average Salary of Support Staff
Salary Total
Overhead
60,000
$1,200,000.00
$
$
$
Inflation Factor
Burden rate (overhead)
Total Cost
EBIT
60,000
$516,000.00
1
80,000 $
80,000 $
24,000 $
60,000
$737,880.00
2
83,200 $
166,400 $
49,920 $
60,000
$1,055,168.40
3
86,528 $
259,584 $
77,875 $
60,000
$1,508,890.81
4
89,989 $
359,956 $
107,987 $
5
93,589
467,943
140,383
4%
4%
4%
4%
4%
30%
30%
30%
30%
30%
$
1,364,000
$
792,320
$
1,135,339
$
1,583,112
$
2,177,217
$
390,964
$
1,263,091
$
1,179,307
$
308,871
$
1,208,696
Note: Aggregated results from the preceding questionnaires
were used to set the lower, average, and upper boundaries
for Monte Carlo simulations of this financial model.
6
Monte Carlo Simulation for Year One EBIT for the Bioinformatics Initiative
Cumulative Probability (%)
Cumulative Density Function
120%
100%
80%
60%
Mean Expected Value
40%
20%
0%
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
Potential Annual Revenue ($)
7
$5,000,000
To generate this data, we
created several triangular
distributions, each bounded by
different sets of three possible
market penetration coefficients
that Ohio might achieve in each
financial model (i.e. low,
average, and high values).
These values were determined
through a survey of participants.
With the resultant triangularlydistributed rate, we jointly ran
5,000 Monte Carlo simulation
trials to arrive at an estimate for
potential aggregate revenues
for the bioinformatics initiative.
The cumulative probability
shows the range of values that
resulted from this set of 5,000
simulation trials.
Monte Carlo Simulation of Aggregate EBIT for the Bioinformatics Initiative
Overlay of Cumulative Density Function for EBIT in Years 1 through 5
(5000 Monte Carol Simulations Per Year)
Cumulative Probability (%)
120%
100%
EBIT Year One
80%
EBIT Year Tw o
EBIT Year Three
EBIT Year Four
60%
EBIT Year Five
Mean Expected Values
40%
20%
0%
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
Potential Annual Revenue ($)
7
$12,000,000
$14,000,000
Monte Carlo Simulation of Aggregate EBIT for the Bioinformatics Initiative
Overlay of Histograms show that the Breadth* of Probable Revenue Per Year
increases with each Year
Percentage of Population (%)
45%
EBIT Year Five
EBIT Year Four
40%
EBIT Year Three
EBIT Year Tw o
35%
EBIT Year One
30%
25%
20%
15%
10%
5%
0%
$1,041,355
0
$2,848,400
$4,655,445
5
$6,462,490
$8,269,536 $10,076,581
$11,883,626 $13,690,671
10
15 $15,497,716 $17,304,762
Potential Annual Revenue ($MM)
*Breadth = Full-Width at Half Maximum
7
20
Monte Carlo Simulation of Aggregate EBIT for the Bioinformatics Initiative
The Time Series of Revenue Probability Ranges
Shows that the Probability of Postitive EBIT
is High for most of the Simulation Range (5 to 95%)
$14,000,000
$12,000,000
$10,000,000
$8,000,000
95%
Mean
5%
$6,000,000
$4,000,000
$2,000,000
$0
EBIT Year
One
EBIT Year
Two
EBIT Year
Three
7
EBIT Year
Four
EBIT Year
Five
Bench Marks
7
Ohio is Ranked 33rd in the Nation in “New” Economic Strength
= Massachusetts
= Ohio
= Mississippi
1
5
10
15
Overall Rank
Managerial/Professional Jobs
Workforce Education
Foreign Direct Investment
Job Churning
Commercial Internet Domains
Education Technology
High-Tech Jobs
Scientists and Engineers
Industrial R&D Investment
Venture Capital
IPO
Source: State New Economy Index, Ernst & Young Analyses
7
20
25
30
35
40
45
50
Strategic Consulting for the Life Sciences Industry
Our management consulting practice provides a full range of entrepreneurial services for life sciences companies
at every stage of their business evolution, allowing entrepreneurial companies to focus on key strategic issues
while leveraging leading practices. Consulting services include:
Strategic Planning From the formulation of business models to merger and acquisition transactions, we can provide a wide
range of strategic consulting services. We can assist with scenario planning, competitive strategy, licensing strategy, strategic
partnering, financial modeling and research and development portfolio management.
Market Research and Assessment We can provide a detailed investigation and systematic analyses of competitive
products, firms, markets, and industries. We can assist with product definition, market sizing, and product positioning to drive
robust product development and strategic planning.
New Product Development Our new product development team assists organizations in selecting the optimal mix of
potential new products and services while effectively targeting niche markets. Further, we can efficiently drive the
development process to result in high-impact products or services that are rapidly brought to market.
Product Launch Our product launch services guide the development of a cohesive and integrated product launch strategy,
coordinating the build-up of manufacturing, distribution, sales and marketing capabilities to optimize market entry. We can
provide launch readiness assessments to determine risk factors and interdependencies related to an upcoming launch.
Supply Chain Optimization We can improve the efficiency and effectiveness of the supply chain through cutting-edge
business process, information flow and materials management, and optimize each step in the supply chain according to
industry best practices and benchmarks.
Activity-Based Cost & Performance Management Our solution team assists organizations in achieving optimal
performance and execution of business strategies through the development and deployment of performance measures. We
can also utilize cost management techniques to provide information for key business decisions, including the development of
activity-based cost models and the rollout of enterprise-wide performance scorecards.
7