LIFE TECHNOLOGIES CORP.
Chairman and CEO: Gregory T. Lucier.
Revenue: $3.6 billion in 2010; $3.3 billion in 2009.
Net income: $377.9 million in 2010; $144.6 million in 2009.
No. of local employees: 1,700.
Year founded: 2008, through the merger of Invitrogen Corp. and Applied Biosciences.
Stock symbol and exchange: LIFE on Nasdaq.
Company description: A global biotechnology company that develops and sells products for life sciences research and biopharmaceutical production.
In its quest to make a new personal DNA-decoder machine faster and more precise, Life Technologies Corp. is taking a page from the personal computing industry’s playbook.
The company kicked off an open “crowdsourcing” competition April 21 that calls on members of the global science community to come up with viable ways to double the performance of its Ion Torrent Personal Genome Machine, or PGM, which it launched in December.
There’s $7 million up for grabs; $1 million for each winner of seven distinct challenges. Only the first three challenges have been announced. One deals with scalability, one with speed, and one with accuracy.
The crowdsourcing approach is used by companies in many industries to speed up innovation, but the concept had its start in personal computing — an industry with many similarities to the DNA sequencing business, said Jonathan Rothberg, president and founder of Ion Torrent Systems Inc., the Connecticut-based business unit of Carlsbad’s Life Technologies that created the PGM.
Just as computing companies such as IBM Corp. sought bright ideas from the broader world of developers to make PCs more accessible to the average person, Life Technologies is looking outside of its internal team of experts to advance its genome-sequencing machines. “All the answers didn’t come from the companies,” Rothberg said of computing giants. “We’re doing it just like the PC industry. We’re using all these smart grad students, all these smart researchers, all these smart programmers to help us.”
Sales Promising; Competition Looms
Life Technologies hasn’t released revenue projections for the PGM, which sells for about $50,000. But in an April 26 conference call with investors, Chairman and Chief Executive Officer Gregory T. Lucier said that sales of the machine “continue to ramp up and have exceeded our expectations on all measures.”
Rothberg has estimated that the market for DNA sequencing hardware could hit $100 billion in 20 years — a vast increase over today’s $1.5 billion market, according to equity researchers at Leerink Swann LLC, a Boston-based health care investment banking firm. Genetic analysis will become as commonplace as an X-ray, Rothberg said.
“People want DNA information — nothing is more powerful,” he said. The information is useful not only in the medical field to diagnose diseases and personalize therapies, but also in industries such as agriculture and energy.
“DNA is the sequence for all life, not just human life,” Rothberg said. “We want to democratize the ability to peer into the genome.”
However, as the market broadens, the competitive landscape is heating up, with San Diego-based Illumina Inc. already taking orders for its own low-budget personal sequencing system, the MiSeq. And that’s why the timing of Life Technologies’ crowdsourcing challenge is so important, said industry analyst Ross Muken, director of the Healthcare Service & Technology group at Deutsche Bank Securities Inc. in New York.
“Life Technologies has the advantage of being first to market, but Illumina is a formidable competitor,” Muken said. “The (crowdsourcing) approach is quite smart. Clearly, anytime you work with the customer base to troubleshoot a new technology, you’re going to get a better outcome. And you want to have the most challenging issues worked out before Illumina brings its box to the market.”
Illumina’s MiSeq will launch this summer, priced below $125,000, said company spokesman Wilson Grabill.
An Innovative Approach
Life Technologies has contracted with a third party, InnoCentive Inc. of Massachusetts, to help define the challenges and evaluate the validity of entries. Participants must agree to sign over the ownership of all intellectual property of the idea to Life Technologies if they win and must show at least a twofold improvement over Life Technologies’ performance baselines for the category they enter.
Dwayne Spradlin, InnoCentive president and CEO, said what makes Life Technologies’ approach different is how public it is with the contest. Many companies seek to remain anonymous for competitive reasons, he said, because “they’re afraid you might be able to piece together some of their product strategies.” Life Technologies, on the other hand, “is making open innovation part of its brand.”
Spradlin added, “I’m not aware of any life sciences company that has done that.”
Kelly Quigley is a freelance writer for the San Diego Business Journal.