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Incyte to Create New Revenue Stream with Deep SNPs

MIAMI, Sept. 13 – Incyte Genomics (Nasdaq: INCY) said Wednesday it planned to create a new revenue stream by offering exclusive licenses to pharmaceutical companies for its “deep SNP” genotyping data, which will link single-nucleotide differences to specific diseases.

“Deep SNPs would be a different business model,” Incyte CEO Roy Whitfield told GenomeWeb. “It will be on an exclusive basis with high royalties.”

The announcement marks a change in the company's strategy. Until now, Incyte focused on building its business by offering non-exclusive subscriptions to its databases.

The company began its deep SNP collection when it acquired Cambridge, UK-based Hexagen two years ago. The Cambridge facility has allowed Incyte to link 1,000 specific nucleotide changes to diabetes and 1,000 others to drug metabolism, said Randy Scott, Incyte's chairman.

The deep SNP project collects information from the literature on variations in genes associated with a disease and then looks for other genes that appear to be related or co-expressed through population studies.

In this way, Scott said the company catalogs SNPs with as low as a 1 percent frequency and has also expanded its genotyping to SNPs in regulatory regions of the genome.

Incyte’s database LifeSeq provides more general SNP data that has not yet been related to diseases. Corporate customers pay $3 million to $15 million annually for access.

The LifeSeq data is derived from multiple sequencing of the same gene. Incyte has already issued more than 30,000 royalty bearing licenses to pharmaceutical companies to use the data in drug development, Whitfield said.

The company hopes that by selling subscriptions to a wide number of customers it will be able to derive royalties on 30-50 percent of the future drugs that will reach the market, said Scott. Incyte's customers include 19 of the leading pharmaceutical companies.

Incyte's stock was up 1 1/8, or 3 percent, at 39 1/4 in late morning trading.

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