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Exec Q&A -- John Schroeder: He's guiding DNAStar's future
(Wisconsin State Journal, The (KRT) Via Acquire Media NewsEdge) Jun. 14--Madison may have its "star" companies in biotechnology and information technology, but at least one local company combines both of those fields and is a "star" in its own right.
DNAStar, 3801 Regent St., develops software for scientists who analyze DNA and proteins, an area called bioinformatics.
The company has been quietly carving out its niche for nearly 25 years, established in 1984 by UW-Madison genetics professor Frederick Blattner and then-computer science student John Schroeder.
Schroeder is now vice president of research and development for DNAStar. Blattner is chairman, chief executive and president of the company, but divides his time among DNAStar, UW-Madison and Scarab Genomics, a biotech company that also is based on his research. Another biotech that Blattner co-founded, NimbleGen Systems, was sold last year to Swiss pharmaceutical giant Roche for $272.5 million.
Leading DNAStar 's day-to-day operations is Tom Schwei, a certified public accountant and former executive of three local companies: PanVera Corp., now part of Invitrogen Corp. of Carlsbad, Calif.; Promega Corp., Fitchburg; and Nelson Industries, Stoughton.
Schwei, 50, joined DNAStar in 2004 as general manager, vice president and chief financial officer. The company had been without a general manager for more than a year and Schwei 's job was to put it back on a growth path.
DNAStar now has 35 employees, all but two of whom are in Madison. It has customers in every state and 65 countries.
Q: How did you get involved in the biotechnology field?
A: I grew up as a CPA. When I started at Promega in 1995, the excitement level, the energy associated with biotechnology companies really hit home for me. I saw a new industry that I really hadn 't been exposed to before and I really fell in love with it.
Q: Does DNAStar serve biotech companies, drug development companies and researchers?
A: One of the foundations of biological research is understanding the DNA structure of organisms that you work with. Software that will help you understand, analyze and annotate your findings is very important.
Lasergene, our primary product, is a foundational tool for all molecular biologists, geneticists and scientists in related fields because they have to understand the DNA they 're working with to be effective with it.
When scientists are trying to determine the DNA sequence of an organism, they may be analyzing thousands of DNA fragments. The Lasergene software takes small pieces of DNA and fits them together, bit by bit, into larger segments. It also lets a researcher compare individual segments and see, for instance, if there 's a correlation to a particular disease, or compare the genes of one patient to another.
Often, scientists need to replicate a particular segment of DNA for experiments. Our software will help identify the biological sequence of the four bases that each piece of DNA has in order to isolate the segment that needs to be copied.
Q: Who are your competitors?
A: CLC bio, a Danish company that started in January 2005. Much of the rest of the competition involves free software. Invitrogen (now owner of PanVera, where Schwei served as general manager) was selling competitive software but now gives it away to academic researchers. It 's a pretty good product and it 's a tough competitor. Other companies also offer free bioinformatics software. It 's a bit of a challenge.
Q: So how has DNAStar held up in that environment?
A: Over time, the company has developed tools, and a reputation for delivering high-quality software in areas important to researchers. We have developed a nice market following.
We 've made a concerted effort that our customers receive updated versions of our software about every year and that has helped to spur some of our growth. One of our greatest assets is our name in the market and it 's really strong.
As a privately owned company, we do not disclose our revenues, but we are growing. We have been growing about 10 percent a year over the last four to five years. Annual revenue is less than $10 million.
Q: DNAStar was recently awarded $231,500 in Wisconsin technology zone tax credits to go toward a $2.5 million expansion project expected to create 20 jobs. What does that project involve?
A: We are working on next-generation DNA sequencing products. We feel we need additional staff to keep up with what we perceive as very healthy market growth. This will pay a percentage of first-year wage costs for employees we hope to add over the next three years. It can also cover part of the cost of additional equipment we buy.
Q: What are DNAStar 's projects for the future?
A: It 's one thing to be able to assemble, on my laptop, the genetic structure of a bacteria that 's 4 million bases long, but the human genome is 1,000 times that size -- closer to 4 billion bases.
We have produced tools that scientists can use on their laptop or desktop computers. It 's our vision to be the company that lets them handle the human genome on their computers.
This is related to personalized medicine. Within the next five years, we 're going to be there.
Already, companies are out with specific genetic tests that can help doctors know how to better treat a patient. But if the genome for an individual 's entire genetic makeup can be mapped, we think there would be quite a market for that.
Q: Does the company have any plans for its own future? Is it a potential acquisition target for some bigger corporation?
A: All I can say is: Look at our history. We 've been privately owned for nearly 25 years. Fred Blattner has no desire or intention to sell the company, from what I can see. His passion is to develop innovative tools that people find useful. There are no near-term plans for the sale of the company or for a public offering or anything like that.
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Copyright (c) 2008, The Wisconsin State Journal
Distributed by McClatchy-Tribune Information Services.
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