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Epoch Buy Appears to Pay Off as Nanogen Signs Custom Assay Deal with DeCode

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When Nanogen released its fourth-quarter results last month, investors had reason to be anxious. The San Diego-based company's revenue declined by more than half year over year, while net losses for the quarter increased by nearly 90 percent (see BAN 3/9/2005).

At the time, Nanogen Chairman and CEO Howard Birndorf tried to soothe worried investors by promising a 2005 replete with product launches, increasing revenues, and narrowed losses.

So Birndorf was undoubtedly pleased when his company this week inked an agreement to provide DeCode Genetics, which has a customized SNP-genotyping assay that incorporates many of the products that Nanogen received with its acquisition of Epoch Biosciences in late 2004 (see BAN 12/22/2004).

According to Kim Richards, a spokesperson for Nanogen, the custom assay can be used for SNP discovery, screening, and validation. It uses the Eclipse Dark Quencher, Epoch's flagship product, which suppresses the signal emitted by fluorescent dyes as the samples bind to the DNA probes on the array.

Richards also said that the tailored assay uses new DNA-linker technology, modified bases, and novel fluorescent dyes. The company also claims the technology enables ultra-high-throughput SNP analysis for a large number of patient samples.

Additional information about the new assay was not available.

While the assay is being developed for DeCode, Richards said that the agreement signed with the Icelandic company was non-exclusive and "the product is available to all," although DeCode is the first customer.

DeCode did not return phone calls or e-mails by press time to comment on how it intends to use the new SNP-genotyping assay.

Richards said that the agreement with DeCode fit with Nanogen's overall strategy of demonstrating its growing product portfolio.

The assay "illustrates Nanogen's broad portfolio of research products used for SNP genotyping," Richards said. "The DeCode deal is a terrific customer win and Nanogen looks forward to landing similar customers in order to drive product revenue growth."

Choosing from Nanogen's Menu

Birndorf, too, linked the agreement with DeCode as validation of Nanogen's expanding product portfolio.

"The products and assay that we will provide DeCode represent our comprehensive product menu available from the recent merger of Nanogen and Epoch Biosciences," said Birndorf.

For Nanogen, which acquired not only Bothell, Wash.-based Epoch Biosciences last year, but also added Toronto-based SynX Pharna as a subsidiary in April 2004 (see BAN 8/11/2004), the growing portfolio is a key component of its larger strategy of growing from a smaller diagnostic company to a diagnostics behemoth.

The company is also expected to add three to four new products to its offering in 2005, starting with the NanoChip 400, a 400-site microarray-based molecular diagnostics platform aimed at the research and clinical diagnostic markets that is due mid-year.

Another new product the company is hoping will help drive revenue growth is a clinical diagnostic test from SynX. David Ludvigson, the company's chief operating officer, told investors in March that the new test will provide a "15-minute rapid test result for congestive heart failure" (see BAN 3/2/2005).

Ludvigson also said at that time that the company had received two patents in Europe related to a stroke diagnostic, and that a similar test would be available some time in 2006.

Nanogen users are also expecting a reissue of its cystic fibrosis ASR, which Birndorf told BioArray News in November 2004 would be out sometime in 2005. Robert Saltmarsh, the company's chief financial officer, told BioArray News in March that the CF ASR was still in R&D and had no estimated launch date.

-- JP

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