When Asterand acquired BioSeek last year, the company wasn’t just buying another fast growing San Francisco area startup. Asterand was buying a big chunk of its future.
Faced with slowing growth in its core business of supplying drug makers with human tissue, the Detroit-based company has been trying to position itself as a full scale research partner to pharmaceutical makers trying to cut costs while speeding development of new therapies.
With BioSeek, Asterand could now offer pharma customers sophisticated software that can predict the efficacy of drug compounds based on disease models culled from human tissue samples prior to clinical testing.
Buying BioSeek was “the logical next step,” says chief financial officer and board member John Stchur. “Its prospects are incredible.”
The BioSeek deal has already paid off.
Excluding revenue from a one time university contract in 2009, Asterand said revenues for the first half of 2010 jumped 29 percent compared to the same period in 2009, thanks to the BioSeek acquisition. Without BioSeek, revenues would have been flat. (Asterand, which trades under the London Stock Exchange, will release complete fiscal 2010 results next month.)
Founded in 2002 by Randal Charlton, now executive director of TechTown, and the venture firm Oxford Bioscience Partners, Asterand’s original purpose was to provide human tissue samples to drug companies in Oxford’s portfolio.
Over time, Asterand became the largest private supplier of clinical human tissue in the United States. To procure the tissue, the company established relationships with about 100 donor sites, usually universities and research institutions.
Stchur says Asterand was the first company to establish standardized protocols in procuring the tissue, so customers can use the materials “right out of the box.” For example, Asterand tests the RNA quality of the samples while collecting 100 data points on the donors, including race, sex, age, geography, and type of disease.
“Asterand is a terrific company,” says Koleman Karleski, managing director of Chrysalis Ventures in Kentucky, which invested in Asterland in 2006. Chrysalis loves companies that can help others lower costs and boost efficiencies, Karleski says. Asterand boasts a “global logistical network to procure tissue samples, [a business] in which you don’t need to be a scientific expert,” he says.
Yet with BioSeek, it seems Asterand is betting more on science. After the global financial crisis in 2008, pharmaceutical firms start to cut spending, prompting Asterand to diversify its businesses and customers.
“Last Autumn, it became clear that many of our clients at large pharmaceutical companies were changing
