Partners enters a genetics market
Would add revenue with software sales
Over the course of a decade, scientists, physicians, and technology professionals at Partners HealthCare developed a sophisticated computer program to digest mountains of genetic data and break it into bite-sized information to help doctors treat their patients.
Now Partners is moving to sell the software, called GeneInsight, to hospitals and labs around the world, hoping to tap into the emerging market for genomics and generate more money to support operations and research at Partners, the state's largest network of doctors and hospitals.
This new product shows that some of the biggest innovations coming out of hospitals today are developed not just with test tubes or lab mice, but also with computers. And it represents a growing strategy among hospitals to spin off not just technology that may one day result in new drugs and medical devices — but also new software systems that will be just as critical, as data play a bigger role in the delivery of health care.
"There's a global opportunity here," said Dr. Calum MacRae, chief of cardiovascular medicine at Partners-owned Brigham and Women's Hospital, who uses data from
GeneInsight to identify the genetic factors that contribute to heart conditions in his patients. "This is the type of tool that changes the game. Partners is beginning to take a more outward approach to novel technologies. That will change the revenue streams that we're so dependent on."
Partners, headquartered in Boston's Prudential tower, recently signed a deal to sell its GeneInsight division next year to Sunquest Information Systems Inc., a Tucson technology company. Sunquest plans to market the software widely, to hospitals and labs that are starting to perform more genetic tests, but don't have good systems to process and analyze those tests.
Partners will earn royalties as the technology gains new customers. Terms of the deal were not disclosed, and Partners declined to say how much revenue it expects to earn. But the global market for genetic sequencing is growing at double-digit annual rates and is expected to reach $2.8 billion by 2018, said Frost & Sullivan, a consulting and research firm.
This is not the first big technology deal for Partners. In September, the health system announced a deal to share software and intellectual property with a Salt Lake City company, called Health Catalyst. The move gives Partners a piece of another growing field, population health management, in which doctors and hospitals track and manage care for large groups of patients.
Other hospitals in Boston are doing technology deals, too. Beth Israel Deaconess Medical Center this year sold its electronic health records software, developed in-house, to the medical software company athenahealth Inc. of Watertown for an undisclosed price.
Boston Children's Hospital is also ramping up efforts in digital health. One recent Children's spinout, ACT.md, makes software to support the coordination of care for patients with complex health issues. The start-up raised $8 million this year from investors.
The demand for software is growing as more health information goes digital and large doctor and hospital systems increasingly track patient health electronically to contain costs and provide more efficient care. In the field of genetics, which produces massive amounts of data, doctors and scientists need powerful programs to sift through and make sense of it.
"Health IT is definitely becoming a larger part of our portfolio," said Irene Abrams, senior director of the technology and innovation development office at Boston Children's Hospital. "Everybody has great expectations for the return on investment because there's such a great need for modernization in health care."
Medical software may not be as glamorous to investors or life-changing for patients as a new drug that can treat a serious illness, but it has business advantages. It can get to market much faster, at lower costs, and doesn't require the same kinds of federal approvals.
Selling software is part of a broader strategy at Boston's teaching hospitals to commercialize research and boost revenues when competition for research dollars is fierce and payments by government and private insurers are rising at slower rates than in the past.
As Partners takes GeneInsight commercial, the nonprofit health care system is in an unusual spot: competing directly with several for-profit companies in the growing field of genomics and precision medicine, an approach in which doctors tailor medical treatments to a patient's specific genetic information. Partners declined to disclose the pricing of the software.
The gene software has already been sold to more than two dozen hospitals and labs, and executives at Partners and Sunquest say it has potential to reach many more: "We expect Sunquest to build a substantial business that will benefit hundreds of thousands, if not millions, of patients," said Christopher M. Coburn, vice president of innovation at Partners.
GeneInsight can crunch genetic data from a variety of tests, from those that analyze a small subset of genes to tests involving the many thousands of genes that make up the entire genome.
It works like this: a doctor orders a test — for example, to see which genetic abnormalities may cause a patient's hereditary lung disease or hearing loss. At a lab in Cambridge, Partners scientists obtain the patient's genetic code from a blood sample.
The software analyzes certain genes and hunts for abnormalities, examining huge amounts of data — many gigabytes' worth — then condensing the findings into a report, typically just a few pages long. The report goes to the patient's electronic health record, where doctors and patients can review the information.
Sometimes, the reports help doctors identify certain medications or other treatments that might prevent patients from developing an illness. For someone with a high risk of sudden heart failure, the treatment may include implanting a potentially life-saving defibrillator.
One feature of the Web-based software, Partners and Sunquest executives say, is it constantly updates to include the latest genetic discoveries.
Partners is tapping a market poised to grow, said Kevin Bitterman, a partner at the Boston venture capital firm Polaris Partners. Bitterman and other industry specialists believe that genetic testing could become so common that eventually all patients will have genomes sequenced and analyzed.
"We're hitting a bit of an inflection point in the depth of our knowledge in genetic medicine," he said. "In the next five years, you're going to see this become a substantial opportunity."