Celgene has made a second investment in GNS Healthcare and is tapping into the firm’s data analytics software to boost Celgene’s drug discovery and development efforts.
Under an agreement announced Tuesday, Celgene (NASDAQ: [[ticker:CELG]]) has licensed the rights to use GNS Healthcare’s “Reverse Engineering and Forward Simulation” software. The technology crunches reams of health data—from electronic health records, pharmacy and medical claims, genomic sequencing, and more—and applies machine learning technology to try and answer complex questions in healthcare, such as predicting which treatments will work best for individual patients.
The multi-year agreement involves several GNS employees focusing their time on Celgene projects, including working at Celgene facilities to operate the GNS software.
“We were already working with them in the past, but this is now really deepening and broadening the relationship,” GNS co-founder and CEO Colin Hill said in a phone interview Monday.
In addition, Celgene made another equity investment in GNS, following its participation in a $10 million Series C round last year. The amount of the latest Celgene investment wasn’t disclosed in a press release, but GNS raised $4 million in equity funding, according to a document filed with the SEC last week.
To date, GNS has raised about $32 million total from investors, Hill said. The company’s other backers include Alexandria Real Estate Equities, Gi Global Health Fund, Horizon Healthcare Services, Cambia Health Solutions, Heritage Provider Network, and Mitsui.
GNS Healthcare was formed in 2010 out of Gene Network Sciences, which was founded in 2000 by Hill and Iya Khalil—two Cornell-trained physicists—to work on computer-simulated drug research. Khalil is GNS Healthcare’s co-founder and chief commercial officer.
GNS Healthcare is applying advanced data analytics and machine learning technologies to healthcare, with the goal of matching individual patients with the right treatment, improving health outcomes, and reducing healthcare costs. Related companies include IBM Watson Health.
The U.S. healthcare industry wastes tons of money each year treating patients with drugs and other care programs that aren’t effective, Hill explained during a presentation at an Xconomy healthtech event earlier this month. For example, he said about 40 percent of asthma patients don’t respond to any FDA-approved asthma drugs, while that figure is 43 percent for diabetes patients.
“Healthcare has a matching problem,” Hill said at the event. “We have a lot of effective interventions, and we still need more, but we don’t know which patients should get matched to those interventions.” (Hill is pictured above on the left, speaking with Xconomy’s Bob Buderi.)
The solution, Hill argued, is big data analysis. Advances in machine learning and cloud computing, combined with a significant increase in available health data, means that companies like Hill’s can more effectively run studies now to try and forecast how individual patients will respond to various drugs and other treatment programs, he said.
“This is the new path to personalized medicine, and we now have the data to drive it,” Hill said during his presentation.
In the phone interview Monday, Hill declined to go into detail about how Celgene might apply GNS’s technology. But one can imagine the types of projects the partnership might yield, given GNS’s work with other biopharmaceutical companies and organizations. For example, GNS and Pfizer (NYSE: [[ticker:PFE]]) published a study this year that analyzed electronic health records to identify risk factors spurring the progression of type 2 diabetes and pre-diabetes. GNS has also been working with the Multiple Myeloma Research Foundation to study what drives clinical outcomes for multiple myeloma patients. That research will ideally lead to new and better treatments for those who suffer from the blood-based cancer.
The GNS licensing agreement isn’t the first partnership Celgene has struck with a healthcare software and analytics firm. In May 2015, Celgene announced a collaboration with San Diego-based Cypher Genomics, which developed software to speed up the analysis of raw genomic sequencing data. Cypher was acquired by Human Longevity last year.
Meanwhile, GNS will use the new funding to invest in product development, gain access to more health data, and boost its sales, Hill said. The company is also hiring.
“It’s really about continuing the investments that we’ve been making for a long time,” Hill said. “As the industry is growing, as the need for our products and services is growing, we’re investing in supporting that because we really see a huge market for what we’re providing.”
