For the microarray industry, the first quarter of the financial year 2004 was one marked by an apparent easing of access to financial capital as companies such as Nanogen, Lynx, and Zyomyx took in some $49.5 million in new capital. Nanogen secured a private placement of $30 million (see BAN 3/10/2004), while Lynx completed two private placements of $4 million each. Meanwhile, on the private equity side, six-year-old protein-microarray developer Zyomyx closed on a $10 million sixth round of funding in February (see BAN 2/18/2004). The company has thus far received some $100 million in venture capital investment.
Additionally, Netherlands-based Agendia announced an undisclosed early-stage private equity investment. Agendia was founded by scientists from the Netherlands Cancer Institute in Amsterdam who have developed a microarray-based diagnostic test to predict the aggressiveness of breast cancer tumors based on the expression levels of key genes.
BioTrove of Woburn, Mass., also reaped new capital, raising an additional $10.9 million tacked onto a $5.9 million Series B round announced in August.
But the microarray world will have to wait until April 21, when Affymetrix reports its first-quarter earnings, to get its first concrete indication of how the just-completed first quarter of the calendar year transpired.
Affymetrix, the bellwether of the industry and the leader of the pre-printed microarray market, earlier in the quarter provided guidance figures of total revenues of $77 million and product and product-related revenues of $73 million for the first quarter (see BAN 2/4/2004), en route to an 18- to 20-percent increase in product and product-related revenue for 2004. The company said it is targeting total revenues of $345 million to $350 million for FY `04, and product and product-related revenues of $330 million to $335 million. To reach those goals, the company will have to average total revenues of $86 million per quarter, and product and product-related revenues of $82.5 million per quarter.
The company will be the second of the publicly traded microarray companies to report, following Illumina, which is slated for April 16 (see chart, page 4).
The uptick in capital last quarter coincided with, and in some cases, led to acquisitions.
Nanogen, the San Diego-based developer of the NanoChip platform, earlier in the quarter announced a $16.3 million all-stock transaction for the purchase of Syn X Pharma of Toronto.
Also, Lynx partnered with Solexa to jointly acquire DNA clustering technology from Switzerland-based Manteia for an undisclosed amount. Meanwhile, the Hayward, Calif.-based company, which is commercializing a technology based on the work of Nobel laureate Sydney Brenner, laid off 15 percent of its workforce.
The largest transaction of the quarter was Molecular Devices' announcement of its plans to purchase the leading manufacturer of microarray scanning instrumentation, Axon Instruments, for $140 million in cash and stock. The deal is expected to close at the end of the second quarter (see BAN 3/24/2004).
But there were others, including Madison, Wisc.-based NimbleGen's purchase of the assets of Light Biology of Dallas for an undisclosed amount (see BAN 3/17/2004).
In another move based on gaining access to capital markets, CombiMatrix, Acacia Research's life sciences subsidiary, announced a move to the Nasdaq big board from its small cap market. The move was described as a necessary step to clear a hurdle for institutional investors (see BAN 3/17/2004).
Illumina began the quarter by launching its BeadChip platform, in which its arrays are laid out on 1x3 microarray slides. One of these products is a chip that includes probes for six copies of the whole human genome. The products are in beta testing and are expected to be available commercially at the middle of the year, company representatives told BioArray News (see BAN 1/21/2004).
Meanwhile, Agilent's whole-human-genome single microarray reached full commercial availability in February after its initial introduction to the market last summer, bringing to at least three the number of catalog arrays on the market that offer complete coverage of the whole human genome on one chip (Affymetrix, Illumina, and Agilent). Applied Biosystems and Amersham subsequently launched their whole-genome products early in the second calendar quarter.
Affymetrix followed its whole-human-genome single chip array with one-chip products for rat, Drosophila, Zebrafish, and Xenopus laevis, as well as specialty arrays including genomes of a Malaria host mosquito, Anopheles gambiae, and the major malaria parasite, Plasmodium falciparum. Additionally, the company introduced a seven-set array of chips for the rapid resequencing of the smallpox genome.
Additionally, Affymetrix announced a plan to underwrite costly design fees so that consortia could save costs on getting GeneChip arrays customed manufactured containing genomes of interest with vitis vinifera, grape, being the first of a dozen such arrays to come out of the company's Sacramento, Calif., production facility.
While Affymetrix was working the high- and low-density ends of the pre-printed microarray spectrum, CombiMatrix launched its own designer microarray line, the CustomArray 902 chip, a completely customizable 1x3 chip with 1,000 sites for in situ synthesized oligonucleotides, which will sell for approximately $400 (see BAN 3/3/2004). The company said it will follow the introduction of this first product with a 13,000-site custom array, followed by a benchtop machine for the manufacture of the arrays.
The Mulkiteo, Wash.-based company also announced custom design microarray products targeting the H5NI "Bird Flu" influenza A virus.
New entries into the marketplace included BioTrove and BioForce Nanosciences.
BioTrove, with former Affymetrix executive vice president Bob Ellis at the helm, introduced the Living Chip, a nanofluidics system for parallel biological analysis that can genotype over 3,000 SNPs at a time, the company says.
BioForce Nanosciences, of Ames, Iowa, saw its developmental product, the ViriChip, published in the Jan. 19, 2004 edition of the Institute of Physics journal, Nanotechnology. The ViriChip is a 4-mm x 4-mm silicon chip with antibodies printed on the surface. It is expected to hit the market in 2005 (see BAN 1/28/2004).
Thus far, there is no single platform emerging as the "right" platform, according to a presentation made at the Association of Biomolecular Resource Facilities meeting in Portland, Ore., in early March. In this presentation, researchers presented results from an ambitious, broad study of microarray platforms conducted by a consortium sponsored by the National Institute of Neurological Disorders and Stroke and the National Institute of Mental Health. The conclusion? No single platform emerged as superior, but more questions were raised about how to quantify and objectively compare the accuracy, reliability, sensitivity, and reproducibility of the leading microarray technologies (see BAN 3/3/2004).
Industry giants Affymetrix and Agilent were not showing in the exhibit hall ofthe Lab Automation trade show in San Jose in late January, so the second- and third-tier players in microarraying had the tradeshow show to themselves. There, the feeling emerged that the home-brew side of the industry equation is far from giving up the majority share of the market to the giants, and there was continued confidence in the notion that commercially made spotting robots can create custom chips at price points that researchers will continue to find compelling and competitive. (See BAN 2/11/2004.) Agilent had its focus elsewhere: the company targeted the Asia market for its gene-expression platform, planning with two separate trips with stops in Guangzhou, and Shanghai, China, then heading to Taiwan and Singapore, before finishing in Melbourne and Brisbane, Australia.
Needed: New Tools
In March, the American Association for Cancer Research meeting in Orlando, Fla., brought together cancer researchers who, as a group, have been early adopters of microarray technology. They were clamoring for new tools to build on nearly a decade of gene-expression profiling using microarrays. [See BAN 3/31/04.]
A feeling of restlessness for improvements in tools for integrative biology could also be heard at the annual meeting of the Association of Biomolecular Resource Facilities. Ed Southern, the Oxford biochemist regarded as the figurative father of this field, and certainly the holder of the intellectual property underpinnings of microarray techniques, spoke in a plenary address of such needed improvements..His list included: increased flexibility in manufacturing for more adaptable custom arrays, better quality arrays, greater reproducibility, increased sensitivity, and less expensive products.
Meanwhile, Oxford Gene Technology, the Oxford University spinoff that manages Ed Southern's microarray-related intellectual property, is preparing the launch of a new microarray manufacturing company, based on a novel electrochemical technique (see BAN 2/18/2004).
Martin Verhoef, senior vice president for sales, marketing, and operations, became president of Ciphergen's new Biosystems division, as well as executive vice president of the company. Verhoef, who has been with Ciphergen since April 2000, will lead the company's research products group -- which sells the company's ProteinChip systems, arrays, and services -- and the bioprocess products groups. Previously, Verhoef was with the liquid chromatography division and the DNA microarray business of Hewlett Packard/Agilent Technologies.
Woburn, Mass.-based GeneXP named a seven-person scientific advisory board including: David Evans, head of drug discovery for the Translational Genomics Research Institute; Geoff Ginsburg, vice president, molecular medicine and research strategy, Millennium Pharmaceuticals; Glenn Hoke, president and chief science officer, Dyad Pharmaceuticals and former vice president of research and development, Gene Logic; Josh LaBaer, director, Harvard Institute of Proteomics, Harvard Medical School; John Quackenbush, investigator, The Institute for Genomic Research; and Ray Stoll, former director of toxicology and safety assessment, Boehringer Ingelheim.
Mark Modzelewski, founder and executive director of the Nanobusiness Alliance and a member of the Nanotechnology Technical Advisory Group of President George W. Bush's Council of Advisors on Science and Technology, joined the scientific advisory board of CombiMatrix.
Ben Bronstein, managing director at Zero Stage Capital, joins the board of directors of BioTrove of Woburn, Mass. Previously, he served as interim CEO for Spherics; co-founder, president and CEO of Peptimmune; and vice president of medical affairs and medical director of BioSurface Technology, which was acquired by Genzyme shortly after its initial public offering.
Daniel Bradbury, the chief operating officer of Amylin Pharmaceuticals and a director of Peninsula Pharmaceuticals, joined the board of directors of Illumina.
Bertrand Jordan, Daniel Chan, Herb Heyneker, and Peter Lockey joined the scientific advisory board of Den Bosch, Netherlands, microarray company PamGene.