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Corning Ends Its Year-Old Microarray Initiative: Industry Matrix Rearranges

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Fiber-optic giant Corning has pulled the plug on its year-old microarray venture, Corning Microarray Technologies, due to a drastic downturn in its overall business outlook, the company said last week during its third-quarter earnings announcement.

“We have invested significantly in this potentially large future market, trying to exploit some of our unique technology,” said Corning CEO John Loose. But in light of the company’s current economic situation Loose said the risks of the venture, “combined with the high level of investment needed to reach the next stage was not appropriate for Corning at this time.”

The financially battered company, for which third-quarter income shrank from $317 million in the year-ago quarter to $85 million this year, is ending the microarray initiative as part of an overall restructuring effort aimed at cutting costs by $350 million in the next year. The majority of Corning Microarray Technology employees will be laid off, according to a company spokesperson.

The company will, however, continue to market its gamma-amino-propyl-silane (GAPS) coated glass slides for arrays, and will maintain funding for a $10 million four-year research collaboration with MIT’s Whitehead Institute for Biomedical Research.

One Less Technology, One Less Competitor

 This news rearranges the microarray industry grid, and removes from the equation a potential major player with what many saw as a unique and promising high-density array technology.

“I am very sorry that due to the economic conditions in the telecom industry, Corning has been forced into this position,” said Richard Young, the Whitehead Institute researcher who has headed up the Corning collaboration. “They have provided us with the highest caliper microarray technology on glass slides. It is a shame for others who want to see this technology [become available].”

Competitors, however, see Corning’s withdrawal from the market as an opportunity to flex their market muscle.

“Going forward, [Agilent] and Affymetrix will remain the two large suppliers of catalogue and custom arrays, accompanied by a whole bunch of niche players,” said Doug Forsyth, an Agilent spokesperson. “Motorola,” he added, “will be a niche player, because it has too much catch-up to do, and like Corning, it is not a life sciences company.”

The fact that Corning left the array business — and realized it would have needed to make a significant investment to continue- “shows us that our installed [product] base has been a sizeable barrier to entry for some” competitors, added Affymetrix spokesperson Anne Bowdidge, “We were a very early entry into this field.”

 

A Latecomer Bows Out

 While Corning’s commercial array initiative may have been a casualty of larger economic trends, the company faced an uphill battle from the beginning. Not only did it have to circumvent Affymetrix’s sizeable patent estate and its own lack of expertise in life sciences, but it entered the market several years behind the others. Affymetrix had begun to commercialize its GeneChips by early 1998, Motorola initiated its Biochips division in 1998, and Agilent initiated its custom arrays technology access program at the end of 1999.

But Corning planned to zoom past these competitors by combining its trove of engineering expertise, its unique technology, and content collaborations with Incyte and others.

To get around others’ patents and solve the quintessential microarray problem, that of producing a high-density reproducible array, Corning engineers and scientists used the company’s catalytic converter technology and its Pyrex lab glass. They developed a funnel-shaped glass device that was filled with the honeycomb grid from the catalytic converters, and drawn down the way the company’s fiber-optic cable is drawn down into narrower and narrower widths. Grids of samples could be inserted in the openings on the wide end, and be drawn together to produce a tiny matrix to be spotted on the other end. The glass slides for the arrays were also covered with a special glass coating borrowed from the company’s flat panel display glass for laptop computers, which the company found prevented spots from bleeding onto one another.

“Their spot morphology and reproducibility was outstanding,” said Andrew Brooks, director of the University of Rochester microarray core facility and an early user of Corning arrays. “They had a great technology.”

But Corning did have some trouble turning this technology into products. The company had originally planned to release its 10,000-spot catalog human array last June, but had delayed this launch first until late summer, then until the fourth quarter. It had meanwhile begun producing 10,000-spot yeast and cancer theme arrays.

An additional issue was cost. Initially, potential users hoped that Corning would come up with an array that was not only more reproducible, but cheaper than the $350-to-$2,000 Affymetrix GeneChips. But by the time the company had developed the technology, it realized it couldn’t make top-quality arrays much more cheaply than anyone else.

Loose acknowledged as much, when he said in the company’s third-quarter conference call,” We thought we had a great value proposition,” but that “the question for us is the business model in the [microarray] industry.”

The company is looking at some combination of selling off the technology, and putting it on the shelf to pick up at a later date, according to a Corning spokesperson. While it might be even harder to get back into the field after other companies have developed their products further, some researchers are optimistic that Corning still has a fighting chance in the long term.

“Their technology was really good, and I don’t think Corning is entirely done in this field,” said Thomas Volkert, director of Whitehead’s microarray facility. “We will certainly continue our collaboration with Corning, and whatever does emerge in the future will likely be a more high-level technology, beyond the standard consumer expression profiling array. Just because Corning is not making commercial arrays doesn’t mean they’re giving up on this technology.”

— MMJ

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