Gene by Gene acquires software upstart Arpeggi

Less than a year since launching, Arpeggi has agreed to be acquired by the 13-year-old DNA testing outfit Gene by Gene. And the genome analysis software from Austin-based Arpeggi is expected to propel the Houston buyer's plans to offer affordable genomic testing and diagnostics services for the consumer and healthcare markets. 

The buyout of Arpeggi underscores the importance of analysis software in genomics and DNA diagnostics. The startup offers tools that enable researchers and companies to manage and analyze information from vast amounts of data from next-generation sequencing machines.

Gene by Gene, which formed in 2000, began operations years before DNA sequencing became widely accessible to researchers and software tools from Arpeggi became a necessity. The buyer has been offering direct-to-consumer genetic testing for more than a decade and helps customers understand their family trees. Now the company wants to make DNA sequencing tests, which provide way more detailed info than tests with gene chips, affordable for consumer and clinical customers.

A hefty amount of IT infrastructure and data analysis transform NGS data on the 6 billion bases in the human genome into something that a physician, let alone consumer, could understand. Arpeggi offers Gene by Gene these IT capabilities.

"The acquisition of Arpeggi's technology and world­-class team of data and technology experts will enable us to accelerate Gene by Gene's plan to make next­-generation DNA sequencing and clinical genomics accessible and affordable to all," said Max Blankfeld, managing partner of Gene by Gene, in a statement.

Gene by Gene said it wouldn't disclose financial details of the agreement with Arpeggi. So how much value the startup built in less than a year is unclear. Yet the Arpeggi team is joining Gene by Gene, finding a home as many new upstarts in the genomic analysis field are searching for their place in the increasingly crowded market.

Arpeggi CEO Nir Leibovich is becoming chief business officer of Gene by Gene and his other fellow executives Jason Wang and David Mittelman have taken on the roles of chief technology officer and chief scientific officer at the company, respectively.

"What we've brought is a very fast and scalable solution to accurately analyze genomes," Mittelman told FierceBiotech IT in a phone interview. "So what this is going to allow us to do is really scale the business here at Gene by Gene and it's going to allow us to offer very affordable and fast genetic testing for everybody."

Arpeggi formed in October 2012 and was accepted in April into the highly competitive StartUp Health program. In recent months StartUp Health partner GE Healthcare topped off a seed round of more than $750,000 for the startup, which was looking for additional financing recently in part to finance a planned lab.

As Mittelman tells it, partnership talks between Gene by Gene and Arpeggi evolved into serious merger discussions after each side realized that Gene by Gene's capabilities such as its fully automated lab and Arpeggi's software tools made a tidy fit. And Mittelman says that his Arpeggi investors are very pleased with the merger.

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