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Complete Genomics, Affymetrix Make Their Pitch to Investors at Jefferies Conference

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – The Jefferies 2011 Healthcare Conference kicked off today in New York City. Below are highlights from companies in the life science tools space that presented earlier in the day.

Complete Genomics

Following the resumption of coverage of Complete Genomics by Jefferies today, company President and CEO Clifford Reid reiterated his firm's pricing expectations and technology goals. He also pointed to the company's clinical sequencing aspirations and planned expanded reach into global markets during his presentation.

Reid said that as of the end of the first quarter, March 31, the firm had an order backlog of more than 2,000 genomes, which represent about $15 million in revenues. By the end of 2011, the firm expects to have shipped more than 4,000 genomes.

Reid said that during the second half of 2011, the price to sequence a genome would fall into the $4,000 to $5,000 range, and the average turnaround time to sequence a complete genome would be less than 60 days, compared to the current 70-day time period. By the end of next year, the price could fall to about $3,000, Reid said.

As the build-out of its technology continues, Reid said that by the second half of 2012, Complete Genomics would be able to crank out 10 genomes per day, compared to the one genome per day that was possible during the first half of this year and the 1.5 genome to two genomes per day that is currently possible.

In addition to further reducing the price of its service and the time required to have a genome sequenced, Reid said that moving ahead Complete Genomics will be looking to build additional facilities across the globe and in the "next few years," the company plans to have 10 facilities. In particular, he cited an interest in building sequencing facilities in Asia.

Lastly, Reid talked up the company's plans to offer long-fragment sequencing services, which would result in the sequencing of separate maternal and paternal chromosomes. As Complete Genomics moves into the clinical sequencing realm, this service will be a "critical differentiator" for the firm, Reid said.

Affymetrix

Last week, the microarray company announced the appointment of Frank Witney as its new president and CEO starting in July, replacing Kevin King. No further details of the change or the reasoning behind it were mentioned during CFO Tim Barabe's presentation.

Instead, he spoke about the market opportunities Affy is targeting moving forward and its shift from its old business model focused on discovery exploration to validation and clinical testing. The main market opportunities it has identified are targeted by its Cytoscan cytogenetics product, as well as the OncoScan FFPE product; the Quantigene View kits; and the Powered by Affymetrix program.

According to Barabe, cytogenetics currently represents a $200 million market, evenly split between microarray and karyotyping technologies. He reiterated that Cytoscan is targeted for a third-quarter launch for research-use only and eventually would be submitted to the US Food and Drug Administration for regulatory approval.

He also said that the company is working to build critical mass in the diagnostics space and noted that Affy has the only FDA-approved microarray-based IVD platform. The company has more than 200 systems installed with more than 60 tests in development. In line with that is its Powered by Affymetrix program, under which the company has partnered with firms such as Roche and Pathwork Diagnostics.

Barabe also cited a test developed by Skyline Diagnostics and Affy for acute myeloid leukemia that is CE-marked and which will be filed for FDA clearance. It is the third test developed as part of Powered by Affymetrix to receive regulatory approval, he said.

Over the past few quarters, Affy has seen flat revenues quarter-over-quarter, and the company has stated that part of its strategy to correct that will be to move away from discovery exploration as a business model to one targeting validation and testing.

Barabe said that during 2010 discovery exploration comprised about 65 percent of Affy's business. The goal will be to shrink that to 45 percent by 2014. Validation and testing made up 20 percent of Affy's revenues last year and is expected to make up 25 percent this year. By 2014, it is expected to comprise 45 percent of the firm's business, Barabe said.

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