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Roche Applied Science Revenue Rises 8 Percent in H1 on Strong Array, Sequencer Sales

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By Justin Petrone

Demand for NimbleGen microarrays and 454 Life Sciences sequencers helped Roche Applied Science's sales rise 8 percent in the first half of this year, Roche said last week.

Roche Diagnostics' Applied Science business, which includes the two firms, posted CHF 403 million ($376 million) in sales for the first half of 2009.

Roche's net income for the six months ended June 30 totaled CHF 4.1 billion, down 29 percent compared to the same period last year. Roche attributed the decrease to "exceptional operating expenses" related to its purchase and integration of Genentech, which it acquired earlier this year.

Roche's Diagnostics Division, of which Applied Sciences is a part, performed better, reporting H1 '09 sales of CHF 4.9 billion, up 3 percent over the same period of 2008.

In a statement, Roche said its Diagnostics sales were "driven primarily" by its Professional Diagnostics and Tissue Diagnostics businesses, while its Applied Science business contributed 8 percent of the division's sales, driven by sales of its genomic tools portfolio.

"DNA sequencing systems and microarrays continued to drive growth, delivering robust double-digit sales increases," Roche said in a statement. "Despite competitive price erosion and the impact of the economic downturn on government research spending," Applied Science sales grew 11 percent during H1 '09, compared with the same period last year, Roche said.

Additionally, placements of the firm's xCELLigence cell-analysis systems, launched last year, "contributed significantly to growth," Roche said. During Q2, Applied Science also launched its LightCycler 1536 system for high-throughput RT-PCR-based DNA-RNA analysis, though the firm did not say how the system contributed to sales during the period.

'Across All Segments'

Roche does not break out its NimbleGen revenues separately from Applied Science. However, Roche NimbleGen spokesperson Kary Staples told BioArray News this week the business unit achieved "significant growth" in the first half of 2009.

He said that the growth was not due to any particular customer group, such as academics or agricultural biotechnology firms, but that the firm saw sales increase "across all segments."

NimbleGen Systems had filed for an initial public offering with the US Securities and Exchange Commission prior to its $272.5 million acquisition by Roche in 2007. According to its SEC filing, the last financial data available for the company, it earned $13.5 million in 2006, up 42 percent over 2005 sales (see BAN 6/19/2007).

In its 2008 annual report, Roche similarly said that sequential quarterly sales growth for its array products has been "steady and strong" since it acquired NimbleGen.

While Staples declined to provide more detail on Roche NimbleGen's financials, he said its sales growth could be attributed to the launch of more applications on its 2.1-million feature HD2 array platform as well as its introduction of a complete microarray workflow, including instrumentation, reagents, and kits.

Most recently the company launched its MS 200 Scanner, which includes an autoloader, an integrated barcode reader, ozone-control, and on-demand calibration combine with adjustable 2 or 5 micron pixel resolution (see BAN 1/6/2009).

In terms of specific applications, Staples said that two of "key array products" that have driven NimbleGen's growth this year are its sequence capture chips and comparative genomic hybridization and copy number variation arrays.

Markets for both applications are competitive. The sequence capture or target enrichment market includes such players as Agilent Technologies, Febit, Fluidigm, and others. The CGH/CNV market is similarly crowded, with Affymetrix, Illumina, Agilent, Oxford Gene Technologies, and a host of other firms all competing for market share.

In sequence capture, where NimbleGen arrays are used to capture researcher-specified genomic regions for subsequent sequencing on next-gen instruments, the company's application is often paired with 454 Life Sciences' Genome Sequencer FLX. For example, this year French agricultural biotechnology firm BioGemma and the EU-funded Neuromuscular Disease Group announced research projects that use both technologies (see BAN 1/13/2009, BAN 3/10/2009).

In the CGH/CNV arena, Staples said that some of the firm's sales "fall in line with the rapid adoption of CGH to replace karyotyping of pathogenic copy number variations." Both companies and customers have similarly predicted that molecular cytogeneticists will swap older technologies for arrays (see BAN 3/24/2009).

Beyond the replacement market, researchers are also using NimbleGen's chips to better understand how CNVs impact human disease. Most recently, researchers from the Korean Centers for Disease Control and Prevention and Macrogen, a Seoul-based genomic tool and service provider, partnered with NimbleGen to use its arrays in a CNV association study (see BAN 7/9/2009).

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Pharma Adoption

In addition to sales of sequence-capture and CGH/CNV arrays, Roche has worked to better integrate the genomics tools in its Applied Science unit with larger Pharmaceuticals Division projects.

In its 2008 report, for instance, Roche said that scientists from Applied Science and Pharma are pursuing projects "aimed at discovering and validating biomarkers which may facilitate drug development or have potential diagnostic applications, particularly in the areas of oncology and inflammatory disease." The company added that "potential uses for microarrays and genome sequencing are being investigated across all of the Pharmaceuticals Division’s major research areas of interest."

Roche NimbleGen CEO Gerd Maass told BioArray News earlier this month that the integration of arrays and sequencing into its personal healthcare projects is a goal of the company.

"We came up with a landscape where we decided what technologies we needed to be really competitive in Roche and developed or acquired them," Maass said. "Now we have most of the important diagnostic technologies under one roof. We can incorporate everything" (see BAN 7/14/2009).

According to Maass, Roche NimbleGen's arrays are currently used as a "fishing tool" and play an "important part" in discovery and early development. In the future, though, Roche may use its array technology in diagnostics based on "methylation patterns or gene expression profiling or, in the future, hopefully, peptide screening," he said.

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