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Faced With Illumina's Solexa Bid, Affy Says New Sequencing Shops Still too Immature to Buy

NEW YORK (GenomeWeb News) — A few days after Illumina last week said it plans to buy next-generation sequencing company Solexa, rival Affymetrix said it wasn’t about to follow suit.
Speaking at the Lehman Brothers Small Cap Conference in Dana Point, Calif., on Nov. 17, four days after Illumina’s announcement, Affy CFO Greg Schiffman said the company believes that the sequencing market is still evolving and that Affy is not “going to do a highly dilutive acquisition when [it isn’t] clear who [is] going to be the winner there.”
Illumina and Affy currently compete in the genotyping and gene expression markets. By acquiring Solexa, Illumina is betting that Solexa’s next-generation sequencing technology will complement Illumina’s existing platforms and give the company a leg up in molecular diagnostics.
Ditto Affy: Last week, Doug Farrell, the company’s head of investor relations, said at the JPMorgan Small/Mid Cap Conference that sequencing technologies would be “complementary” to the firm’s GeneChip platform. But Affy and Illumina differ in that Affy does not anticipate buying its own sequencing shop, at least for the moment.
According to Schiffman, Affy believes next-generation sequencing companies are years away from generating significant revenue, and buying a sequencing platform would not fit with its acquisitions strategy.
“We would rather see these technologies develop,” Schiffman said at the Lehman Brothers conference, and the “reality is that these existing platforms are going to demand a significant amount of investment over the next three to five years.”
“I think that while these technologies are exciting, this is not a near-term revenue driver for us anyway. We think it’s just a little bit early to be placing our bets at this point,” he said.

The complete version of this article appeared in this week’s issue of BioArray News, a GenomeWeb News sister publication.
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