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Affy Service Providers See Value In Company’s Recent Acquisitions

Affymetrix customers have looked on as the once acquisition-cautious Affy bought more companies since the beginning of the year than it has since the start of the decade.
The array shop paid $75 million for USB in February, bought True Materials for $25 million five months later, last week purchased Panomics for $73 million in cash, and has hinted it will make more acquisitions in 2009.
And while it is perhaps too early to gauge how these deals will impact Affy’s existing customers, some Affy-certified service providers told BioArray News that they view Affy’s expansion positively.
John Jaskowiak, executive vice president of molecular diagnostics and genomic services at Paris-based ExonHit Therapeutics, said “there can be value in the long term” for customers, but “it is still early in their integration” to know for sure.
“For example, the acquisition of USB provides greater flexibility in design, development, and cost of manufacturing reagents,” Jaskowiak told BioArray News this week. “I would expect the USB acquisition to provide the more immediate short-term gain in terms of providing customers with robust reagent solutions for their various applications.”
ExonHit’s portfolio of splice-variant microarrays is manufactured on Affy’s GeneChip platform, and the company uses Affy arrays in its therapeutic- and diagnostic- development programs.
ExonHit is also an Affymetrix certified service provider, a segment of Affy’s customer base that will likely see the most impact on its day-to-day operations in the short term from the integration of USB.
For example, Divyen Patel, CEO of Affy-certified service provider Genome Explorations, said the USB buy is likely to benefit his business.
“We keep a very active interest in Affy’s activities, especially acquisitions, and in all cases the acquisitions help us better our offering to our clients,” Patel told BioArray News this week.
When Affy last December said it plans to directly provide reagents to its customers (see BAN 12/9/2008), Patel said he was concerned that the strategy could result in “sub-optimal” reagent kits replacing ones that comprise components from a number of different manufacturers.
“Affymetrix has traditionally kept out of the reagents market and this has served their users well because it gave us the opportunity to work with various different vendors to try and optimize each part of their overall labeling protocol,” Patel told BioArray News in January (see BAN 1/8/2008).
At the time, Patel said that the integration of USB could either result in Affy selling kits that are “sub-optimal for yield and/or quality,” or enable it to market a “completely optimized kit that is turn-key for all users and results in perfect quality and yields.”
This week, Patel said that Memphis, Tenn.-based Genome Explorations is no longer using an internally developed cocktail of reagents. “In the past we used to buy individual components from USB and use these in conjunction with reagents from other vendors,” he said. “We now buy and use the kits provided through Affy [and] look forward to being able to incorporate the new platforms into our service offerings as … Affy starts offering them.”
When Affy acquired Cleveland-based USB, it touted the buy as a means to capture more of the money its users spend on reagents.
“Our strategy with USB is to provide the best and most cost-effective all-inclusive reagent kits,” an Affy spokesperson told BioArray News this week. “To this end, USB is providing excellent support to our ongoing reagent kit-development activities for new product development.”
According to the spokesperson, since acquiring USB in February, Affy has begun to source from the company certain components of its existing kits. Next year, Affy said it plans to finish moving its GeneChip reagent production from Sunnyvale, Calif., to Cleveland, creating a “reagent center of excellence” at the former USB site, he said. 
The spokesperson added that Affy’s Cleveland R&D group will “co-develop” new GeneChip assays with the Sunnyvale development team, and will begin “co-branding activities” to enable Affy to cross-sell USB products for GeneChip assay sample-preparation and -validation applications.
True Materials and Panomics
While Affy customers may initially feel the impact of the USB acquisition, some users are more excited about the technologies the firm has acquired with True Materials and Panomics.
San Francisco-based True Materials, which Affy bought in July, develops digitally encoded microparticle technology that Affy said can be applied to the research, applied, and diagnostic markets.
Meantime, Fremont, Calif.-based Panomics, which Affy acquired last week, sells products for in situ RNA, RNA, DNA, protein, and cell analysis. Panomics’ assays are currently available in both single-plex and multiplex formats, and many are developed to run on Luminex's bead-based xMAP platform.

“I think that for multiplex and low throughput, they have lost the battle against Illumina and Luminex.”

The acquisition “appear[s] to be a positive move from our perspective,” Austin Tanney, disease-specific array program manager at Craigavon, UK-based Almac Diagnostics, told BioArray News this week. “The fact that Affy [is] now focused on the low- to mid-range of multiplex analysis is of potential benefit from a diagnostic perspective and, I hope, reflects the importance of the diagnostics business for Affymetrix.”
Almac, also an Affy-certified service provider, sells disease-specific arrays for ovarian, breast, colorectal, prostate, and lung cancers, and said it plans to begin selling in vitro colorectal cancer-recurrence and early-stage lung-cancer detection tests in the US over the next two years (see BAN 8/19/2008).
“As a company developing diagnostics both for ourselves and for our commercial partners, we are very much platform agnostic, and the platform that we use will be the platform best-suited to the application,” Tanney said. “Whether this is microarray, qPCR, or one of the new Affymetrix technologies will very much depend on the application.”
Tanney added that Almac hopes to see assays based on the Panomics or True Materials platforms gain US Food and Drug Administration clearance in the future, which could pave the way for other diagnostics companies, such as Almac, to follow.
“For us, the most important aspect is not the lack of platforms that are available; it is the lack of platforms that have received regulatory approval,” Tanney said. “As such, we hope to see Affymetrix seek FDA approval for the new platforms; this will be key to [Affy’s] success” as a molecular diagnostics player.
Meantime, Panomics got good reviews from Roderick Jensen, a professor of biological sciences at Virginia Tech, who noted that the firm’s array platform was used in the first phase of the Microarray Quality Control project, which published its results in September 2006 (see BAN 9/12/2006).
“The Panomics QuantiGene assay performed very well in the MAQC,” Jensen told BioArray News last week. “The Affymetrix acquisition of Panomics should help to increase the use of this valuable method for the direct quantification of mRNA levels.”
‘No Interest’
Still, Affy’s recent acquisitions did not win over every customer. A representative of an Affy-certified service provider, who spoke on condition of anonymity because of his relationship with Affy, said that the Panomics and True Materials buys were of “no interest” to the company and suggested that only USB would likely help the array giant win new accounts.
“I think that for multiplex and low-throughput [assays], they have lost the battle against Illumina and Luminex, even if we are not convinced by Luminex’s SNP-genotyping assays,” he said. Illumina, Affy’s principal rival in the microarray space, sells its digital microbead-based BeadXpress reader for use with lower-multiplex assays.
Affy had previously said that True Materials planned prior to its acquisition to launch its liquid-array microparticle technology sometime next year. This week, though, an Affy spokesperson said the technology is “at an early R&D stage” and has not been assigned a launch date.
The spokesperson also said that the technologies acquired with the trio of firms could complement each other. “The acquisition of [Panomics and True Materials] means Affymetrix provides a range of tools for low-, mid-, and high-sample throughput and genomic-complexity needs, as well as budget requirements,” the spokesperson said. “Customer needs in the discovery area generally involve high genomic complexity and lower sample throughput. Genomic complexity lessens and sample throughput increases as you move into exploration and validation molecular tests.
“Affymetrix’ strategy is to expand into the validation and molecular testing markets, and the synergies acquired with Panomics and USB products and technologies will help us do that,” he added.

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