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Industry Companies Prime for Revenue In the Third Quarter of Fiscal Year 2004

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The microarray industry spent the second quarter of the year sowing new product seeds at all ends of the tools continuum in hopes of reaping a profitable harvest of revenues in the second half.

The ultimate consequence of all of this cultivation might finally be what many scientists have been seeking: A deep and varied tool kit of commercial-quality preprinted microarrays at prices that make them accessible to a larger number of scientists.

Another consequence might be a diminution of the home-brew industry, including the constellation of manufacturers of arrayers, reagents, and glass slides. Already, this expansion in preprinted microarray offerings has had an effect on academic core labs, which are weighing existential questions. This week, the University of Michigan is closing its stand-alone Affymetrix core lab facility, merging it into the school’s Cancer Center microarray lab, where it will continue to offer GeneChip analysis services.

Meanwhile, the industry is rolling toward $1 billion in revenues for the year. While this is a significant milepost, it is supported anecdotally as Affymetrix, the market leader in preprinted arrays, is the only microarray maker to release specific revenue and sales data.

Varied Market Segments

At the top end of the market, Affymetrix and Illumina are targeting the high-density SNP-chip arena. The two companies are packing probes onto microarray chips and grappling with the technical challenge of mass manufacturing a single chip with the necessary number of oligonucleotides to conduct meaningful disease association studies — a number thought to be between 200,000 and 500,000 unique SNP probes.

This week, Affymetrix officially launched its 100,000-SNP mapping chip set, releasing the product to the broad marketplace just before the end of the quarter on Wednesday (see products, page 2).

Illumina is developing a 100,000- probe SNP chip, set for beta release by year-end.

But the frenzied action seems to be at the lower-density end of the product continuum. Last week, Affymetrix and NimbleGen Systems announced the availability of the NimbleExpress chip, which will use NimbleGen’s micromirror manufacturing capabilities. In this collaboration, NimbleGen will provide a quick-turnaround capability for lower-density custom microarrays that use Affymetrix’s match-mismatch probe design schemes.

At the same time, CombiMatrix launched its 12,000-probe line of CustomArrays, following a 900-probe product launched in the spring. The company is also developing a benchtop instrument that will enable customers to fabricate their own arrays, and the launch of that product is expected within the year.

The product launches from Affymetrix, NimbleGen, and CombiMatrix follow several moves indicating interest in a micromirror-based technology for mass manufacturing of microarrays.

NimbleGen purchased the assets of LightBiology of Dallas, a micromirror microarray technology developer, while Invitrogen acquired Xeotron of Houston, another developer of this technology.

Invitrogen added the Xeotron acquisition to its purchase of Protometrix, a Branford, Conn.-based developer of a protein microarray platform, which, while not micro-mirror based, creates an intriguing microarray portfolio.

Price Pressure Coming?

In the next quarter, expect the arrival of $100 whole-human-genome chips from Taiwan’s Phalanx. The company has opened a wholly owned US subsidiary and is taking orders now for fulfillment in the fall. The company, and the ink-jet based printing technology it is using, has been in development since 1999.

Phalanx’s entry into the market brings online a foundry with immense capacity, but one without a market demand for thousands of chips a week. Still, the company is placing its bets that a $100 whole-genome array will stimulate researchers to increase their use of microarrays for gene-expression analysis. The Phalanx chip is an open-platform concept, designed to be read on any of the 1x3 chip scanning systems widely used.

Applied Biosystems was another significant entrant into the market in the second quarter. The giant of sequencing instruments rolled out its Expression Analysis system in April, and opened up a lab where customers could take the proprietary platform for a ride. ABI is offering instrumentation, whole genome chips for human and mouse, as well as a link to proprietary and public data sources for the genes.

Additionally, on the surface side of microarrays, Corning launched its GAPS 3D substrate for beta testing.

This quarter, expect to see the launch of a 16-chamber rat ADME assay from the former Amersham, the first new microarray from CodeLink produced following General Electric’s April acquisition of the British life sciences company.

The Short-Term Future

While a release date is still uncertain, at some point this summer, the US Food and Drug Administration will issue a pharmacogenomics guidance document, which has been available for comment in draft form for almost a year. This document is expected to establish the parameters that microarray developers must adhere to in moving this technology from the labs of discovery toward the mega-market of diagnostics, and with it, high hurdles to overcome for accuracy, reproducibility, and sensitivity. Meantime, industry representatives at all levels continue a drive toward producing standards and protocols.

The Long Term

Researchers are eager for microarray tools for comparative genomic hybridization assays as well as tissue arrays. Industry is moving quickly on the former, with Agilent, regarded as the No. 2 seller of pre-printed microarrays, working with the Translational Genomics Institute of Phoenix on CGH application oligonucleotide microarrays. Meantime, its arrays are at the center of the leading-edge efforts of Agendia, the Netherlands-based startup kicking off a 5,000-patient clinical trial for microarray-based breast cancer diagnostics.

— MOK

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