In what it sees as the first volley of a potential price war for gene-expression profiling in 2004, Lynx Therapeutics of Hayward, Calif., is reducing its pricing on its gene-expression analysis services using its massively parallel signature sequencing technology, the company told BioArray News.
“Affymetrix is getting quite aggressive in its pricing, and Agilent and Applied Biosystems will have to fight that battle too,” Tom Vasicek, Lynx vice president of business development, said in announcing the pricing. “You are going to see a lot of that in the next year.”
While Lynx does not perform its services on a microarray platform, it is competing with the three companies, and others, who provide services or platforms for gene-expression analysis. This announcement comes at a time when these assays are moving from the development stage to one where, at least for research purposes, there has been a relative leveling of the technological playing field, leading to the next logical tier of business differentiation: pricing.
Lynx operates around its flagship Massively Parallel Signature Sequencing system, the brainchild of Nobel laureate Sidney Brenner, which consists of tags that attach to the ends of DNA fragments in the sample to be studied, and complementary antitags that are added to microbeads.
The tagged fragments hybridize to the antitags, and the beads are directed into a flow cell, where the fragments are sequenced using Lynx’s instruments. The sequenced fragments are counted to see how much of a certain transcript is present in each sample – a digital type of readout, as contrasted with current mainstream microarrays, which provide an analog representation, in their image of relative expression between two samples.
Lynx’s technology is sold on a services basis and is regarded as producing high-quality data at a much higher degree of resolution than other methods.
“Our market has been a high- end segment, people that need bankable data and a total picture of what is going on with the sample,” said Vasicek.
Vasicek has deep experience in microarray technology. With a Harvard Medical School PhD in genetics and immunology, he has cycled through thousands of microarrays in a career that saw him manage Millennium Pharmaceu-ticals’ microarray technologies, followed by a stint as director of commercial technology for Corning’s short-lived effort in microarray manufacturing, and a position as a visiting scientist at the Whitehead Institute, where he evaluated genomic technologies.
The company requires 20 micrograms of total RNA per sample. As an introductory offer and for a limited time — until Dec. 31— the company is offering to perform 350,000 signatures for $10,000. (Each signature quantitates the absolute level of a unique gene transcript in the sample). In January, the cost will be $12,000 for 250,000 signatures, $25,000 for 1 million signatures per sample, and $40,000 for 2 million signatures per sample.
Previously, the company offered a commercial rate of $40,000 a sample for a million-signature sequence sample, with a 25 percent academic discount available.
The company’s current collaborators, customers, and licensees for MPSS include Takara Bio, DuPont, BASF, Bayer CropScience, and Geron. Additionally, the company this year has added a number of new customers for its services including: Pfizer, Millennium Pharmaceuticals, IBM, the Institute for Systems Biology, the National Institute on Aging, the Genome Institute of Singapore, the University of Delaware, Northeastern University, and the International Livestock Research Institute.
Benefits for Lynx
The price cutting announcement follows the release of Lynx’s third-quarter financials, where the company, which has operated at a loss since its inception in 1992, edged into the black with a net income of $1.8 million for the third quarter, compared to a net loss of $3.3 million for the third quarter of 2002, on revenues of $8.3 million, compared to $4.3 million for the same period last year. The company, as of September 30, 2003, had cash and cash equivalents of $5.4 million, compared to $11.7 million for the period ending Dec. 31, 2002.
In its third quarter 10-Q statement filed with the Securities and Exchange Commission, the company said that it will need additional funding to continue its business activities in 2004, but it believes that it will be able to secure sufficient funding through equity financing or additional collaborations.
The company has approxim-ately 90 employees after cutting its workforce by 30 percent (45 people) in January, a layoff primarily in its research and development and proteomics groups and one that the company said was made to focus on further commercializing its MPSS technology.
The price savings, Vasicek said, are a result of the company’s increasing efficiency.
“It’s a reflection partly due to our volume increases – the more units we pass through, the lower our cost,” he said.