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Stratagene Eyes PGx Market With Deal to Develop Automated RNA Purification System with Merck Unit

In the latest of its efforts to gain a foothold in the molecular diagnostics and personalized healthcare market, Stratagene this week said that it has formed a joint development and license agreement with Merck subsidiary Rosetta Inpharmatics to create an automated instrument that can isolate nucleic acids from clinical samples.
 
Under the deal, the companies will jointly develop an instrument and a single-use consumable that Stratagene will manufacture and sell to its current customer base and to potential customers in the pharmacogenomics market.
 
According to Stratagene President and CEO Joe Sorge, Rosetta has rights to a particular product application in the field of RNA purification. He told BioCommerce Week via e-mail this week that Stratagene has obtained an exclusive license for this product application and will use its experience in instrument and consumable design and development to “significantly automate the RNA purification process for end users.”
 
He said the instrument will be a small benchtop machine, but will not be based on any of Stratagene’s current instruments.
 
“While we anticipate healthy revenue from the sales of this automated solution in 2007, we foresee substantial long-term revenue potential as the adoption of nucleic acid biomarkers in standard medical practice begins to take place toward the end of the decade,” said Sorge during the firm’s second-quarter conference call last week (BioCommerce Week8/9/2006).
 
Sorge said the automated instrument and kits will compete primarily with currently available reagent kits for manual preparation of nucleic acids, including Stratagene’s own manual kit called Absolutely RNA. 
 
“We believe that we have a unique opportunity to create and produce a differentiated product that will automate the RNA purification process and provide consistent, reproducible results, which is harder to do with current methods,” Sorge said. “We expect it to be applicable to Stratagene’s current customer base and companies engaged in pharmacogenomics.”   
 
As revenues have declined from sales of its legacy research products, Stratagene has focused more on developing instruments and reagents for applied markets and diagnostics, which could offer greater growth potential.
 
The firm has two major partners — Focus Diagnostics and Bayer Diagnostics — with whom it is developing molecular diagnostic products. Focus was recently acquired by Quest in a $185-million deal, and Siemens recently announced that it would acquire Bayer Diagnostics for $5.26 billion (see BioCommerce Week 5/24/2006 and 7/5/2006).
 

“We foresee substantial long-term revenue potential as the adoption of nucleic acid biomarkers in standard medical practice begins to take place toward the end of the decade.”

During the conference call last week, Sorge said that the collaborations are moving forward, assuaging investor concerns that the acquisitions could have derailed them.
 
Focus is developing diagnostic assays based on Stratagene’s FullVelocity quantitative PCR technology under a deal inked in December (see BioCommerce Week 12/8/2006). Herndon, Va.-based Focus, which operates a national reference lab that offers more than 1,200 infectious disease tests, received a non-exclusive license to the FullVelocity technology, and Stratagene said it intends to help the company develop molecular diagnostic kits and products. Stratagene will manufacture any diagnostics products that arise from the collaboration, and Focus will commercialize them globally.
 
Stratagene hopes to begin testing assays for regulatory clearance early next year and launch some of the products in 2007, Sorge said during the conference call. “Quest is very much interested in continuing that program,” he said.
 
Under the collaboration signed with Bayer in March, the German diagnostics giant will sell customized versions of Stratagene’s Mx3005p instruments to clinical labs for molecular diagnostics testing worldwide (see BioCommerce Week 3/8/2006). Stratagene officials said last week that Bayer is currently funding software development for the instruments, and will begin developing instruments based on Stratagene’s technology in the latter part of 2006.
 
Sorge said this week that the Rosetta deal complements its alliances with Focus and Bayer.

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