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UPDATE: Corning Axes Microarray Initiative as Part of Overall Restructuring

NEW YORK, Oct. 18 - Fiber-optic giant Corning has pulled the plug on its microarray venture, Corning Microarray Technologies, as part of an overall restructuring effort to trim costs, the company said on Thursday.

This announcement, made in the company’s release of sharply reduced third-quarter earnings, comes slightly more than a year after the company began its venture into the array field.

“We have invested significantly in this potentially large future market, trying to exploit some of our unique technology,” said Corning CEO John Loose in a conference call to discuss the company’s quarterly earnings. “This project has already had risks, as all development projects do.

“But in light of the company’s overall situation," he added, “we reached the conclusion that the level of risk combined with the high level of investment needed to reach the next stage was not appropriate for Corning at this time.”

Corning was a latecomer to microarrays, beginning its initiative in September 2000; Affymetrix had products on the market in 1998, and Motorola and Agilent had been developing products for the sector since the late 1990s as well. 

Last May, the company first appeared to be running into obstacles in its effort to commercialize its flagship 10,000-spot human array, which it originally planned to introduce in June of this year, but had delayed first to August and then to the fourth quarter. 

But Corning's retreat from the microarray sector appears to be mainly a casualty of the drastic downturn in the telecom business. 

The company reported net income for the third quarter of $85 million, down from $317 million in the third quarter of 2000. As a result, Corning said it would be ceasing operations of the microarray initiative and closing manufacturing facilities in other areas in order to save $400 million during the next year.

This decision affects other genomics companies, including Incyte, which had signed an agreement to provide content for Corning’s arrays; Motorola, Affymetrix, and Agilent, meanwhile, now have one less competitor to worry about.

MIT’s Whitehead Institute, which had begun a three-year $10 million collaboration with Corning to discover novel applications for the arrays, will still, continue to receive funding, according to Rick Young, the Whitehead scientist heading up the project.

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