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Applied Biosystems, Applera, Roche Diagnostics, Cepheid, Royal Philips Electronics, Celera, Berkeley Heart Lab, ParagonDx, Gentris Diagnostics, Ipsogen, Affymetrix, Nanogen

ABI Launches Initiative to Support Software Development for Next-Gen Sequencing
 
Applied Biosystems this week kicked off a program to help third-party software developers create bioinformatics tools for its SOLiD next-generation sequencing system.
 
ABI said it is expanding its Software Development Community to include sample data sets, data file formats, and data conversion tools for the SOLiD system. The company said that it has also “dedicated resources” to support bioinformatics developers that it expects to advance application development in several research areas, including whole-genome sequencing, chromatin immunoprecipitation, microbial sequencing, gene expression, microRNA discovery, digital karyotyping, epigenetic profiling, and detection of rare genetic variants.
 
ABI said it recently hosted a meeting for more than 40 researchers from 30 academic and commercial institutions “to provide input and share best practices with each other on their respective next-generation sequencing software development initiatives.”
 
Michael Wittig, a bioinformatician at the Institute for Clinical Molecular Biology in Kiel, Germany, said in a statement that the "promise that next-generation, genetic-analysis technologies will generate better data, faster, and at a lower cost will only be realized when there are sufficient software applications that allow researchers to analyze this data."
 
Darren Platt, head of informatics at the Department of Energy’s Joint Genome Institute, said the program "will enable us to rapidly develop the software applications our laboratories need to accelerate next-generation research projects."
 

 
Applera to Buy $600M of ABI Stock from Morgan Stanley
 
Applera said last week that it has signed an agreement to acquire $600 million worth of Applied Biosystems common stock from investment bank Morgan Stanley.
 
The accelerated purchase is part of Applera’s previously announced plans to buy back $1.2 billion worth of ABI shares over the next four to six quarters.
 
The number of shares repurchased is subject to a minimum and maximum based on the volume-weighted average daily price of ABI’s shares over the next approximately seven and a half months. The minimum number of shares will be delivered to the firm within roughly six weeks. Any additional shares will be delivered to Applera over the following six months.
 
The purchase is expected to dilute ABI earnings per share for the first quarter by approximately $.01. However, it is expected to be accretive to ABI’s EPS for all of fiscal 2008, said Applera.
 
Applera announced the share repurchase program in early August. On that same day, the firm said it had hired Morgan Stanley to advise the company as it considers restructuring its ABI and Celera groups, which are currently traded as tracking stocks under the parent firm (see BioCommerce Week 8/15/2007).
 
In a separate announcement, Applera said that it obtained a $100 million unsecured term loan through its agent, the Bank of America.
 
Applera may use the loan, which it obtained on Aug. 27, on or before Oct. 26 for general corporate purposes, the company said in a US Securities and Exchange filing.
 

 
FDA Clears Roche’s PCR-Based West Nile Virus Test
 
Roche Diagnostics last week said that the US Food and Drug Administration has cleared its PCR-based test for detecting West Nile Virus in donated human blood and plasma.
 
The test, called the cobas TaqScreen West Nile Virus test, enables researchers to detect the virus earlier in the infection cycle in donors who may show no symptoms of disease, according to Roche.
 
Though the virus is principally transmitted to humans through mosquito bites, it can also infect humans by transfusion of infected blood or blood products.
 
According to the US Center for Disease Control and Prevention, US-based blood-screening centers identified 340 donors whose blood tested positive for West Nile virus in 2006 and 23 so far in 2007.
 

 
Cepheid Inks Anthrax Test Deal With Postal Service
 
Cepheid recently said it has signed a purchase order with Northrop Grumman through which it will supply the United States Postal Service with its Bacillus anthracis test cartridges and related materials through 2011.
 
Cepheid said the five-year deal could be worth as much as $200 million. The firm said it expects to provide the USPS with around 2 million anthrax test cartridges in its 2008 fiscal year, which begins Oct. 1.
 
The amount of cartridges under the agreement will vary year-to-year through 2011, Cepheid said.
 
Cepheid has been supplying its GeneXpert test and anthrax cartridges to the USPS since 2003. The technology forms the basis of Biohazard Detection Systems at the USPS, which analyze air samples taken from mail-sorting systems in order to detect trace levels of DNA from anthrax spores.
 
Cepheid has been negotiating the new contract with Northrop Grumman and the USPS since late 2006 and the delay has had a negative impact on the company’s biothreat revenues. For the second quarter of 2007, Cepheid posted a 26 percent decrease in biothreat sales compared to the year-ago quarter amid an overall revenue increase of 25 percent.
 
"This agreement is a testament to the success of the ongoing program with the USPS, in which more than 5.2 million tests have been run with no false positives," Cepheid CEO John Bishop said in a statement.
 

 
Philips to Create Jointly Owned Molecular Medicine Research Lab in China
 
Royal Philips Electronics and a Chinese biological institute last week announced that they intend to create a joint research laboratory in Shanghai to study molecular medicine, particularly pharmacogenomics.
 
So far, Philips and the Institute of Health Sciences have signed a memorandum of understanding to create the facility. The partners said the goal is to create “new solutions for the early diagnosis of disease and for monitoring the effectiveness of subsequent treatment.”
 
“In particular,” the center will perform biomarker discovery and test development for in vitro diagnostic testing, the partners said in a statement.
 
The collaboration will give the IHS access to Philips' global research organization, “especially the European laboratories, and should serve as a good example for further European collaborations," Rongxing Gan, vice president of the Shanghai Institutes for Biological Sciences, to which the HIS belongs, said in the statement.
 
"The combination of our expertise in translational biomedical research and Philips' expertise in advanced medical instrumentation will definitely accelerate the development of new healthcare solutions for the Chinese people as well as people around the world."
 
For the IHS alliance, Philips intends to locate a team of its own scientists at the joint research laboratory. The IHS is affiliated with the Shanghai Jiao Tong University School of Medicine.
 
The companies did not disclose a timeline for the creation of the institute. Financial details were also not disclosed.
 
Philips has already laid the groundwork for this kind of research by creating a life-sciences facility at its High Tech Campus in Eindhoven, the Netherlands. In May, Philips and Dutch drug maker Organon said they plan to use the campus to perform biomarker studies that could benefit Philips’ imaging programs and Organon's drug-development efforts.
 

 
Celera to Buy Berkeley Heart Lab for $195M
 
Celera said this week that it will buy Berkeley HeartLab, a California-based personalized cardiovascular care company, for around $195 million in cash.
 
Celera said that BHL’s portfolio of CLIA-certified tests and disease-management services will expand its options for new molecular diagnostics, including tests for cardiovascular patients.  
 
The deal is expected to close in Celera’s second fiscal quarter of 2008, which ends Dec. 31, 2007.
 
Celera estimated that the market for personalized cardiovascular disease management in the US is worth around $7.8 billion and growing at around ten percent per year.
 
BHL’s annual revenue is expected to be more than $85 million in 2007, which Celera said is double-digit growth over 2006. The company said the acquisition will be accretive to earnings in the second half of fiscal 2008.
 
BHL will operate as a business unit of Celera.
 
Celera president Kathy Ordonez said the deal provides Celera with a “commercial infrastructure to drive adoption” of new molecular diagnostic tests that individualize treatment for cardiovascular disease.
 
“Celera's genetic markers that are intended to identify people at risk for early heart attacks, stroke and blood clots and optimize therapy with cholesterol-lowering drugs, aspirin, anti-coagulants and other cardiovascular drugs should augment Berkeley HeartLab's current disease management offerings to patients,” Ordonez added.
 
BHL has around 300 employees and is headquartered in Burlingame, Calif. It also has a CLIA-certified lab in Alameda, Calif. as well eight regional disease management centers.
 
BHL was founded in 1995 and first turned a profit in 2004, Celera said.
 

 
ParagonDx Acquires Assets of Gentris Diagnostics; Sorge Takes Controlling Interest
 
Newly formed company ParagonDx has acquired the assets of Gentris Diagnostics, a subsidiary of Gentris Corporation, and will focus on developing molecular diagnostic products for laboratories, the company said last week.
 
The company, located in Morrisville, NC, also said that Joe Sorge, founder and former CEO of Stratagene, has assumed a controlling stake in the company. Gentris Corporation will retain a minority stake in the new company. Agilent acquired Stratagene in June for roughly $250 million (see BioCommerce Week 6/13/2007).
 
Gentris Corporation CEO Michael Murphy will serve as president and CEO of ParagonDx, the firm added.
 
Among the assets ParagonDx purchased from Gentris Diagnostics are the first six FDA-cleared human genomic reference controls and 46 other reference control products currently being sold to reference labs and diagnostic developers.
 
Also acquired is a new in vitro diagnostic designed to determine a safe starting dose for the anticoagulant warfarin. Earlier this month, the US Food and Drug Administration required manufacturers of warfarin to update the drug’s label to include genetic testing information.
 
According to ParagonDx, the company plans to develop a series of products for molecular testing. The firm also said it intends to improve existing home-brew tests by filing them with the FDA for clearance.
 
"Molecular diagnostics is an emerging market," Sorge said in a statement. "Small, nimble companies such as ParagonDx will be able to adapt to rapidly changing conditions and bring tests to market that will actually help patients."
 
Financial terms of the acquisition were not disclosed.
 

 
Ipsogen Licenses Affymetrix Technology for Dx Applications
 
Affymetrix last week said that molecular diagnostic shop Ipsogen has signed a Powered by Affymetrix agreement, which gives it non-exclusive access to Affy’s array technology to develop and market in vitro diagnostic tests, initially for breast cancer, worldwide.
 
Financial details of the deal were not disclosed.
 

 
Nanogen to Raise $20M in Senior Notes Offering
 
Nanogen last week said it would raise $20 million in a registered offering of unsecured senior convertible notes and warrants to institutional investors.
 
The transaction is being overseen by Seven Hills Partners. The investors were not disclosed, though in a statement Nanogen CEO Howard Birndorf called them “solid” and “familiar with both our market place and our long term prospects.”
 
Nanogen will use the cash for working capital and general corporate purposes, or, according to Birndorf, it will provide the company with a “vehicle for long-term continued investment,” and will allow it to “focus on our core objectives of managing the business and improving our EBITDA performance.”
 
The three-year notes, or debt, will pay investors 6.25 percent in interest each year, and subject to certain conditions, Nanogen may elect to make those payments in either cash or stock
 
The notes will also provide investors with the right to convert principal into registered shares of Nanogen common stock at $1.27 per share, a 12-percent premium over the closing bid price of Nanogen's stock on Aug. 24.
 
After 24 months Nanogen will have the right to force conversion of the notes into shares of common stock, depending on the performance of the stock.
 
As for the warrants, the investors initially received options to buy around 11 million shares of common stock for $1.14 apiece for a term of five years, which may be replaced with additional warrants if the initial options are exercised.
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