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Incyte Reports 22 Percent Increase in Q2 Revenues, Cites New Database Trend

NEW YORK, July 19 - Incyte Genomics reported revenues of $56.1 million Thursday for the quarter ended June 30, up 22 percent over the same quarter last year. 

The company attributed the increase to higher revenue from its database and partnership program and from custom genomics services. Revenues from Incyte's database and partnership program increased in the quarter by 21 percent to $43.2 million, and custom genomics revenues for the quarter of $12.9 represented a 24 percent increase over last year's numbers. 

Incyte chief financial officer John Vuko said R&D expenses for the quarter increased 16 percent to $52.2 million. Some of those expenses, he said, were related to the establishment of Incyte's proteome operations. 

The company's net loss for the quarter was $9.9 million, compared with losses of $6.6 million for the second quarter of 2000.

In a conference call, Vuko said he was pleased with the strong growth. But he also warned that cautious spending among biotech and genomics companies had affected Incyte, and that increasing competitive pressures have caused price erosion in the microarray market. Vuko predicted that those trends would continue into the third quarter. 

CEO Roy Whitfield attributed the company's revenue increases to accomplishments in its database business, especially renewals from pharmaceutical customers. He also noted that direct sales and marketing efforts have enabled Incyte to begin penetrating the Japanese market. In particular, he noted that Eisai, which subscribed to the LifeSeq Gold database this quarter, is the fourth Japanese company to access Incyte's database. 

Whitfield added that the company is "witnessing the emergence of a new application of its database" in the form of functional genomic and proteomic platform customers who have begun subscribing to Incyte's data to further develop their own intellectual property. He noted that each new relationship Incyte establishes with such a platform company "creates new layers of content that will create new opportunities for us to sell up." 

As highlights for the second quarter, the company listed its alliance with Lexicon Genetics and Lexicon's subscription to Incyte data; a collaboration with Odyssey Pharmaceuticals to characterize proteins in the Incyte data; subscriptions to its LifeSeq Gold database taken by Eisai and Genomic Health; a partnership with Secant Technologies to co-market Incyte's Genomic Knowledge Platform; and a collaboration with Iconix Pharmaceuticals to develop and commercialize next-generation chemogenomic and multiarray gene expression information products.

Asked about when Incyte's former president Randy Scott would be replaced, Whitfield said he is "cautiously optimistic that we'll have the position filled by next conference call."

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