Stratagene is still in negotiations with an unnamed partner to further develop the firm's MX3005 QPCR instrument for molecular diagnostic applications, but the nature of that deal has changed, according to Chairman and CEO Joe Sorge.
Sorge told BioCommerce Week in an interview earlier this week that the partner has shifted its interest. "They realized it was going to take them too long to get to market by customizing our instrument into a bigger system, so I believe they're going to go with our off-the-shelf instruments," he said.
The deal is the lynchpin in Stratagene's plan to expand in the molecular diagnostics space. It has been negotiatiating the deal with this diagnostics company for several months and expects to complete an agreement in the second half of the year.
Stratagene acquired Hycor Biomedical in the second quarter of 2004, providing the firm with certified GMP facilities and staff that has extensive experience dealing with the US Food and Drug Administration's regulatory procedures. The company also has pacts with Bayer Diagnostics and Beckman Coulter to run Stratagene's autoimmune assays on their respective diagnostic platforms.
Sorge also said that the firm is "still talking to a number of sources, and working on potential deals" to acquire additional intellectual property in the molecular diagnostics area. He declined to provide details.
"They realized it was going to take them too long to get to market by customizing our instrument into a bigger system, so I believe they're going to go with our off-the-shelf instruments."
Stratagene believes its opportunity to compete in the molecular diagnostics arena a market that has been valued at anywhere from $1.2 billion to $2.5 billion annually was enhanced by the March expiration of certain PCR patents held by rival Applied Biosystems and Roche. The company is trying to make its case to customers that its FullVelocity QPCR is faster, more sensitive, and more cost effective than the industry standard TaqMan.
New Patent, But Old IP Battle Simmers
Stratagene recently received its fifth US patent covering the FullVelocity technology, which it said will enable increased multiplexing capabilities at a potentially lower cost. The patent, number 6,893,819, was issued a couple of months ago, but disclosed by the firm last week.
"It has a secondary reporter system in it," Sorge said. "So what it can allow you to do is do multiple primary reactions and then read them out with multiple secondary reactions that are not necessarily covalently linked to the primary reaction. It gives you the potential to do high-level multiplexing of quantitative PCR, and no one has conquered that yet."
He said that, theoretically, "it allows you to go to N-plex, whatever you want N to be. That, I think, is a major advancement."
Sorge cautioned, though, that the advancements in the FullVelocity technology that are covered by the patent have not been developed to the point of commercial viability yet.
He said that the technology covered by the new patent could potentially enable researchers to design a PCR system that is probe-independent. "The customer could do a simple PCR reaction, and then if that PCR reaction is successful, it would trigger a secondary reporter system," he explained. "So, [the researcher] would get the sensitivity of QPCR and the specificity of TaqMan without having to design expensive fluorescent TaqMan probes."
"The customer could do a simple PCR reaction, and then if that PCR reaction is successful, it would trigger a secondary reporter system. So, [the researcher] would get the sensitivity of QPCR and the specificity of TaqMan without having to design expensive fluorescent TaqMan probes."
Stratagene is embroiled in an ongoing legal dispute with Third Wave Technologies regarding the FullVelocity technology. Third Wave sued Stratagene last year, claiming that it violates some of the more than 30 patents that protect Third Wave's Invader technology, which, like FullVelocity, uses invasive cleavage structure chemistry to analyze nucleic acids and infectious agents (see BioCommerce Week 9/23/2004).
Sorge said his company's patents in the area of cleavage chemistry cover technologies that differ from Third Wave's patented technologies. "Stratagene does not include overlapping DNA molecules in its kits," said Sorge. "In contrast, Stratagene's FullVelocity technology benefits from the sensitivity advantages of PCR amplification, something not found in Third Wave's Invader methods."
Stratagene countersued Third Wave two months ago, alleging that the Invader technology infringes its FullVelocity patents.
Asked this week whether Stratagene believes other companies may be infringing the newest patent, Sorge told BioCommerce Week he wasn't sure. "No one is using, to my knowledge, the multiplexing capabilities of it," he said. "But whether anybody has a secondary reporter system in a non-PCR system, it's possible."
Stratagene is scheduled to release its second-quarter results on August 9. Analysts are predicting the firm will report revenue of $24.4 million, which would be a 24-percent increase from the second quarter last year.
With the expiration of ABI's PCR patents, Stratagene expects to realize savings of roughly $400,000 in royalties for the second quarter.
Edward Winnick ([email protected])