- part 1: Lexicon cuts a deal with TAMUS to create TIGM, backed by the Texas Enterprise Fund
- part 2: TIGM faces a setback as the NIH doesn't choose it for the Knockout Mouse Project
- part 3: No one could have seen this coming. TIGM vows to fight on.
In her response to Chancellor McKinney's unfavorable evaluation, then-President Murano wrote:
...a comprehensive audit of the Texas Institute for Genomic Medicine revealed many flaws with the management of that entity, which culminated in its dissolution as a 501c(3) non-profit organization. Given that the Texas A&M System had been a partner in this venture, and that it was now the recipient of its assets, the university is committed to partner with the Health Science Center in providing management oversight and significant financial resources in excess of $2 million annually to help TIGM continue to operate in spite of heavy financial lossesIf Murano had taken one for the team and silently resigned when the Chancellor gave her his evaluation, then this wouldn't have come up again. As the Chancellor said yesterday:
Shakespeare said, “The past is prologue.” I believe the past can be the past if we agree to work together for the sake of the future.But since the anti-TIGM potbangers are back, let's address the future of TIGM, with the help of our tame faculty consultant.
Despite the setback in 2006, TIGM inked several deals in 2007 to supply knockout mice to other institutions. The NIH also offered administrative supplements to grantees who would use TIGM or the competing KOMP resource. Nevertheless, the 2008 audit wrote:
TIGM has not generated enough sales to be self-sustaining and experienced a decrease in net assets of $1.5 million in fiscal year 2007. The A&M System paid $1.9 million for utility infrastructure, another $105,000 for payroll in 2008, and has committed $1.2 million to fund expenses associated with the partnership’s transition to a joint institute of TAMU and HSC.With the worlds largest collection of gene traps, how can that be? One possible explanation is that demand for TIGM mice is not as great as anticipated. In the plan presented to the Regents (found in the Google cache), we find this:
Over 2,000 inquiries have been received from researchers through TIGM’s website since it went live in June of 2006, and over 100 colleges, universities and research institutions located in North and South America, Europe, Asia and Australia have contracted with TIGM for delivery of mouse ES cells, genetically-engineered mice and related services.Actual sales figures are not provided in either this agenda item, the audit report, or the TIGM website. Interestingly, the KOMP blog indicates that the NIH-funded effort only hit 100 orders recently.
There are two reasons why demand might be too low to support TIGM. First, it's still expensive to do mouse research and there just aren't that many academic labs to sell to, especially during difficult funding periods. Second, RNAi technology provides a faster route to many of the same goals. RNAi is not a perfect substitute, but it's good enough in many cases.
Competition from RNAi should drive down demand for knockouts unless the prices for knockouts come down. How much can one charge, anyway? When this all started, Lexicon was charging $20-$40K plus IP restrictions. The NIH supplement information says
The NIH share will not exceed $13,125 direct costs, plus indirect costs per mutant. The applicant organization is expected to make up the difference between the funds NIH provides and the cost of the mouse. The Institution must also provide funds for cryopreservation to the NIH-funded repository that will make the mouse mutant available to the research community. This cost is estimated to be ~$2500/mouse.This fits with the cost of getting a litter of mice from KOMP that might have a germline knockout (or not). KOMP shows the prices if you follow their order form; TIGM doesn't. ES cells are much cheaper: they're less than $700/vial at KOMP. In 2005, the NIH goal was to drive the price much lower.
At those prices, you have to sell a lot of ES cells or mice to cover a $2M/year operating budget. Thus, the Regents' agenda item says:
The worldwide mutant mouse market is over $100 million per year. With the most extensive knockout mouse library of any supplier, TIGM will be able to provide materials that are unavailable through any other source to academic and commercial entities. The sale of knockout mice to academics and non-profits will only be a break-even proposition. However, TIGM will also be able to provide knockout mice at a higher price to commercial companies for their internal research, which will provide an income stream to help support TIGM programs. TIGM personnel will work closely with the TAMUS Office of Technology Commercialization to establish the appropriate procedures for licensing genetically engineered mice to private corporationsVision 1920's faculty consultant suspects that the $100M number is largely made up of mice sold by Jackson Labs and Charles River Labs, which, between them, sold 9 million mutant mice in 2005 for $10-200 apiece. This includes a lot of "nude mice" used in cancer research and elsewhere. Managing large volumes of small numbers of strains is very different from small volumes of very large numbers of strains.
Breaking even on academic sales may be optimistic. But the new business model seems to be based on raking in big bucks from commercial sales. Vision 1920 doesn't have the data to assess this, but notes that both KOMP and Lexicon are competitors in that market. Whatever TIGM's future, the joint venture part of the story is done. Lexicon is not part of the new TIGM; they've changed from partners to competitors. And they never delivered the bioinformatics software promised in the original agreement.
Nevertheless, in the Eagle story on the audit report, the Chancellor reiterated that TIGM is a "wonderful asset", also saying:
"The idea is great. The science is great. Could we have planned better? Absolutely. Should we have planned better? Yes," A&M System Chancellor Mike McKinney told the regents Thursday during the panel's audit committee meeting.The Chancellor undoubtedly has better information than we do, so that's good enough for us. As loyal Ags, we believe that
"It's a good idea; it's a good concept that none of us meant to mess up. But we did."
Aggie joint ventures never lose money, they just run out of time.