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Orchid Digs Deeper Into Diagnostics Market Through Expanded Beckman Deal

NEW YORK, Feb. 22 - Orchid BioSciences has taken one more step into the growing diagnostics market when it announced on Friday that it has broadened an existing licensing agreement with Beckman Coulter.

The new deal gives Beckman a three-year option to license Orchid's SNP-IT SNP-scoring technology to develop tools for its diagnostic-lab clients. Orchid also gave Beckman a license to make and sell certain analyte specific reagents for use with the SNP-IT technology.

Both technologies are used in DNA-diagnostic tests on capillary electrophoresis systems, microarray plates, and flow cytometers, Orchid said.

In exchange, Orchid will receive upfront fees and royalties of roughly 10 percent on sales of all SNP-IT-based diagnostic kits, and will be given royalties on sales of the ASR tests.

Financial details of the deal were not disclosed.

The deal, which expands a similar agreement Orchid struck with Beckman for the therapeutics-research community, takes the Princeton, NJ-based SNP shop farther down the diagnostics path.

Two weeks ago, Orchid and a unit of Thermo Electron signed a series of agreements to develop and market SNP-based diagnostic tests for point-of-care applications in addition to genotyping products for research.

Under this agreement, Orchid will receive non-exclusive rights from Thermo Electron's Thermo BioStar business to develop, supply, and sell genotyping products that will combine the SNP-IT technology with BioStar's OIA biosensor technologies.

The companies also have agreed to co-develop and market SNP-based diagnostic products for point-of-care facilities.


Two month earlier, Orchid marked its first step into diagnostics when it granted market giant Quest Diagnostics a non-exclusive license to use the SNP-IT platform in its diagnostic tests.


Orchid received an upfront payment of an undisclosed amount for this deal and will also be entitled to undisclosed royalties for diagnostic services provided by Quest.


(Quest, based in Teterboro, NJ, has gained access to the SNP-IT technology through a deal with Applied Biosystems for its SNAPshot reagent kits. Orchid's SNP-IT technology is embedded in those reagent kits, which means that Orchid gets two sets of royalties--one from ABI for using SNP-IT and one from Quest for the diagnostic services it provides customers.)


Orchid said it sees the diagnostics market as a strong and rapidly growing new arena in which it may parlay its technology.


"As we see polymorphisms and genetic variability in the coming years move primarily from the research lab into clinical practice and more routine use in the medical field, the diagnostic applications are going to be very important," Barbara Lindheim, an Orchid spokeswoman, told GenomeWeb.


Experts have foreseen a gradual evolution of emphasis from therapeutics to diagnostics, and companies like Orchid and their downstream clients like Beckman and Quest have aligned themselves to cash in. Lucia Quinn, a senior vice president of Quest Diagnostics, said in a presentation at the BioSilico meeting here this week that the gene-based diagnostics market in the US will reach $1 billion over the next five years and balloon to $10 billion in 10 years.


She also said that genomics companies will have better luck in the diagnostics game than in the therapeutics game. Specifically, Quinn thinks that lead-to-diagnostics will take three years while lead-to-therapeutic times remain continue to hover at 10 years.


To catch up to name players like Celera Diagnostics and to formally plant its own stake in the market, Orchid created Orchid Diagnostics after acquiring Lifecodes in December. This new division, which Lindheim said will likely generate $15 million or more in revenue this year, will sell the HLA products and service platform acquired through Lifecodes and the Elucigene kits Orchid acquired after nabbing Cellmark Diagnostics one year ago.

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