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Orchid Expands SNP Collaboration with Affymetrix; Reports Q2 Earnings

NEW YORK, Aug. 7 – Affymetrix and Orchid have expanded their joint effort to develop SNP genotyping kits using Affymetrix’ GeneChip GenFlex tag arrays, the companies said on Tuesday.

The non-exclusive agreement allows Orchid to use Affymetrix’ oligonucleotide sequences in primer extension applications, a method for detecting and identifying SNPs in samples. Orchid must pay royalties for any sales that result from the collaboration.

In addition, Orchid has acquired ownership rights to an Affymetrix patent, US Patent 5,856,092 and its foreign counterparts, covering certain technology associated with SNP detection.

In a conference call, Orchid CEO Dale Pfost said the patent “completes the tapestry of intellectual property that we have developed around our core SNPit technology.”

The companies did not disclose financial details.

The deal calls for Affymetrix to provide GenFlex arrays to Orchid, which Orchid will then distribute with its SNPcode reagents to customers who want to conduct genotyping studies using Affymetrix’ GeneChip system. Orchid can also provide genotyping services to customers using the GenFlex arrays.

The advantage to using a microarray technology for performing genotyping studies, Orchid and Affymetrix say, is that it allows researchers to test a sample for the presence of multiple SNPs simultaneously.

Affymetrix also granted Orchid a non-exclusive license to use Affymetrix’ universal Tag technology, a method for separating and detecting molecules by DNA hybridization, in its SNP genotyping products and services.

Separately on Tuesday, Orchid reported a second-quarter net loss of $14.3 million, or 41 cents per share, compared to $18.0 million, or 94 cents per share, year over year. The company beat Wall Street estimates by 3 cents a share, according to a poll of four brokers conducted by First Call/Thomson Financial.

Revenues for the quarter were $6.7 million, a 46 percent increase over the comparable period a year ago. The company attributed the increase to higher revenues from its genotyping services operations and sales of its genotyping research products, including its SNPstream 25K instruments and SNPware consumable kits.

Meanwhile, the company's second-quarter operating expenses dropped to $21.8 million from $23.7 million year over year as it it spent less on research and development. R&D expenses fell to $9.0 million from $12.3 million reported in the year-ago period.

In the quarter ended June 30, Princeton, N.J.-based Orchid had $70.1 million in cash, compared with $50.8 million at the end of the first quarter. 

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