Less than a year after Amgen ($AMGN) puzzled market watchers with a high-dollar deal for the once-bankrupt deCODE, the Icelandic company's former owners have found a new use for its Big Data platform, putting up $15 million to launch a diagnostics-focused spinout.
Cambridge, MA's NextCODE Health has hit the ground running with a 5-year exclusive license on deCODE's technology, planning to use its predecessor's genomics platform for clinical diagnostics. Polaris Partners and Arch Venture Partners, who made out quite well when Amgen paid $415 million for deCODE, are putting up the Series A cash to get NextCODE off the ground.
Unlike its oft-troubled forebear, NextCODE has a clearer path to profit. The company plans to lend out its huge, refined genomic database to healthcare providers, using the technology to help physicians identify and analyze gene mutations, providing fast diagnoses without the need for major IT infrastructure. And, despite its youth, the company already has some revenue streams in place through service deals with clinics around the world, including Boston Children's Hospital and the U.K.'s Newcastle University.
"Our vision is to transform patient diagnosis and resultant care through the rapid and accurate use of genome sequence data, and we are deploying the most powerful tools ever developed to make this vision a reality," CEO Hannes Smarason said in a statement. "These tools will enable us to provide clinically relevant insights to physicians and geneticists with unrivaled speed and accuracy."
The company's very existence is either an affirmation of deCODE's core principles or further proof that the industry is still in the honeymoon phase of its relationship with Big Data, depending on who you ask. Before Amgen flew in with a much-scrutinized buyout offer, the once-public deCODE spent millions dollars to create a repository of patient data orders of magnitude larger than anything else out there, but, like many in the genomics world, the company ran into serious concerns about just how to make money off of Big Data, which, coupled with the financial crisis, drove it into bankruptcy by 2009.
But the quizzical looks Amgen got had more to do with how the two companies fit together--why spend $415 million on data that outstrips your pipeline when you could partner up for a lot less?--than the utility of deCODE's platform. And NextCODE, with its well-defined service business model, already seems off to a better start than its parent.
The company's C-suite boasts a familiar cast of characters, with former deCODE chief financial officer Smarason in the top role and Jeff Gulcher, a deCODE co-founder, reprising his role as chief scientific officer.
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