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Despite Battling Scale-Up Issues, Phalanx Low-Cost Human-Genome Arrays On Track for 2005

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It has been quiet around Phalanx Biotech Group since the Taiwanese company in June announced its introductory offer of a $100 whole-genome human array.

The company’s stated goal is to make commercial microarrays affordable for researchers worldwide by offering them at a price between $100 and $200, much less than the average price of $500-$600 for other whole-genome arrays. And industry observers are guessing whether the firm’s entry into the market will touch off a price war.

In June, the 2002 spin-off from the Industrial Technology Research Institute of Taiwan raised $11.8 million in a second funding round, bringing its total investments up to $26.3 million (see BAN 6/9/2004). Since then, Phalanx has been working hard on manufacturing the arrays at its facility in Taiwan but still needs to iron out a few kinks, mostly regarding scale-up, BioArray News has learned.

“We are kind of in a holding stage right now until our production gets going,” said Luke Chen, vice president for marketing and business development of PhalanxBio, the group’s wholly owned US subsidiary.

Nevertheless, Chen is optimistic that these problems will be solved within a month or so, and the firm is still expecting the Human OneArray to launch worldwide within the first half of 2005, which was the initial target for a launch date. Phalanx also intends to launch a whole-genome mouse array later next year.

In the meantime, PhalanxBio has moved into new premises in Palo Alto, Calif., which offer sufficient office and lab space for about 20 employees. “Many of our international research collaborations will be driven from here,” Chen said. The company has signed “some” new partnerships besides a collaboration with the Canadian Genetic Diseases Network of Vancouver, he said, but is not ready to talk about them yet.

The company has also made a number of key staff additions. In September, PhalanxBio hired George Jokhadze, who helped develop microarrays at BD Biosciences Clontech, as director of operations. He will be responsible for both product shipments and customer support.

Charles Ma became chief scientist of Phalanx Biotech Group that same month, joining the company from Columbia University, where he gained experience with microarrays while doing research on Caenorhabditis elegans. Ma will validate the performance of the arrays and set up new collaborations. Both Jokhadze and Ma are based in Palo Alto. Though PhalanxBio and its parent company are financially separate, “functionally we are pretty close,” Chen said.

Once all production issues are solved, the company plans to make additional hires in sales as well as customer and technical support.

The main challenge in scaling up production has been achieving a high enough yield of usable, quality arrays to make the process cost-effective, given Phalanx’s price model, Chen said. The company has already produced a batch of 12,000 arrays, “but as far as the yield was concerned, we were not happy with it,” he said.

The Human OneArray carries more than 30,000 probes — 60-mer oligonucleotides produced by Illumina. The probes are printed onto glass slides that are coated with hydrophobic surface chemistry carrying functional groups that bind the probes.

The probes were designed using a program from Taiwan’s Industrial Technology Research Institute. More than 90 percent of the probes fall into a single exon of the target transcript, according to the company’s website.

Phalanx plans to make the probe sequences available about one month before the arrays are launched, Chen said, so customers can find out whether they are suitable for their needs.

The company is currently considering making the arrays available to collaborators in Taiwan first, followed by other Asian countries, and the US. “Mostly, it’s for us to get a couple of orders under our belt, get some experience, and then, hopefully, we will come to the US market pretty fast,” Chen said.

Phalanx has already taken an undisclosed number of pre-orders for its low-cost arrays: “We had a pretty good response,” Chen said. “It validates our approach to the market.”

When the firm does reach the market it will be facing the daunting task of taking on some of the industry’s largest players — including Affymetrix, Agilent, GE Healthcare (formerly Amersham Biosciences), Applied Biosystems, and Telechem — which have released their own whole-human-genome arrays over the past year or so.

Illumina also has plans to launch a lower-cost human-genome array this year.

— JK

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