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UPDATE: Incyte to Expand Database Offerings, Annotation in $77M Deal for Proteome

NEW YORK, Dec 21 - Incyte Genomics will acquire Proteome in a $77 million cash and equity deal as part of its plans to create the first fully annotated human proteome and beef up annotations on its genomic databases, Incyte CEO Roy Whitfield said Thursday.

" There isn’t anybody who can touch Proteome in terms of annotation," Whitfield told GenomeWeb. " First thing, Proteome will annotate all the unique full length genes we have discovered through our relationship with Pfizer."

After this initial effort, which is to begin immediately, Whitfield said the two companies will aim to create a " comprehensively annotated proteome." Incyte also plans to annotate the proteins in its LifeSeq gold database.

Proteome, which is privately held and based in Beverly, Mass., has a network of nearly 100 scientists who curate the BioKnowledge Library, a database of annotations for over 50,000 proteins in humans, rats, mouse, worm, yeast, and other organisms. These annotations include information from published articles and sequences.

Proteome currently has 25 pharmaceutical and biotechnology companies as its customers.

" This transaction presents a unique opportunity to deliver more comprehensive genomic solutions to more customers and partners in the life sciences community more swiftly," James Garrels, CEO of Proteome said in a statement. " It realizes the Proteome vision, and joins two leading edge organizations in a way we find very exciting."

Under the terms of the agreement, Incyte will pay Proteome $77 million in cash and equity, in exchange for all of Proteome's outstanding capital stock. Incyte expects the acquisition to close before the end of the year.

Proteome will remain a separate subsidiary of Incyte, and its CEO and founder, James Garrels, will remain at the helm, said Whitfield. " Jim Garrels has a great reputation not just in pharma, but in academia," Whitfield said.

Meanwhile, Incyte will " evaluate" Proteome's database licensing contract with Celera, which is thought by many to be a competitor of Incyte.

Whitfield, who said that Celera and Incyte have " hardly any overlap" in the content they provide, added, " We don't know of anything in that contract that will inhibit Incyte from deriving great value" from the Proteome acquisition.

Incyte also announced in a conference call detailing the acquisition that it would be posting year 2000 losses of between the " high” $20 million to low $30 million range on revenues of $190 and $199 million. 

The company said the costs of acquiring Proteome would be included in fiscal year 2001.

Incyte shares were down 13/16, or 3.3 percent, at 23 11/16 following the news.

While Incyte does not expect the Proteome acquisition to produce immediate revenues, John Vuko, Incyte's chief financial officer said in the conference call the company was looking at " downstream revenue in the five [year]-plus range."

The main aim of the acquisition, said Whitfield, is to catch the proteomics wave before other companies do.

“Ultimately, it's the proteins that are involved in biological processes. With the Proteome acquisition, we have an opportunity to get way ahead of the curve," he said.

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