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Affy Warns that Low Manufacturing Yields Will Lead to $10M-12M Shortfall in Q3 Revenues

Affymetrix said this week that "low initial-production yields" of its 500K Mapping Array Set will result in a revenue shortfall of $10 million to $12 million for the quarter ended Sept. 30, or as much as 13 percent below its previous guidance of $92 million in product-related revenues for the quarter.

In a conference call following the announcement, Greg Schiffman, senior vice president and CFO, said the company had a "little bit of a hiccup with our ability to ramp production and get yields to where we need to have them" during the quarter. He said that the manufacturing issue affected only the 500K chip.

"While we have recently seen improving yields, these improvements occurred late in the quarter and we now project that we will be unable to manufacture enough product to meet our revenue target," CEO Stephen Fodor said in a statement.

Affymetrix officials said during the conference call that they plan to expand the company's manufacturing plant in Sacramento, Calif., by 60 percent through 2006, and that they also plan to open a new plant in Singapore next year.


NIH to Fund 12 Groups with $150M in Total As Part of Renewed PGx Research Network

The National Institutes of Health will fund 12 groups with more than $150 million over five years in total under its renewed Pharmacogenetics Research Network, the NIH said this week.

Originally, the initiative, led by the National Institute of General Medical Sciences and eight other NIH institutes, was funded from 2000 to 2005.

The following groups will receive funding:

  • The Pharmacogenetics and Pharmacogenomics Knowledge Base, headed by Russ Altman at Standford University School of Medicine, will receive $13.7 million;
  • Pharmacogenetics of Nicotine Addiction and Treatment, headed by Neal Benowitz at UCSF, will receive $10 million;
  • The Consortium on Breast Cancer Pharmacogenomics, headed by David Flockhart at Indiana University School of Medicine, will receive $11.6 million;
  • Pharmacogenetics of Membrane Transporters, headed by Kathleen Giacomini at UCSF, will receive $15 million;
  • Pharmacogenomic Evaluation of Antihypertensive Responses, headed by Julie Johnson at the University of Florida, Gainesville, will receive $11.1 million;
  • Pharmacogenetics and Risk of Cardiovascular Disease, headed by Ronald Krauss at UC Berkeley/Lawrence Berkeley National Laboratory, will receive $14.8 million;
  • Functional Polymorphism Analysis in Drug Pathways, headed by Howard McLeod at Washington University, will receive $10.5 million;
  • Pharmacogenetics of Anticancer Agents, headed by Mark Ratain at the University of Chicago and Mary Relling at St. Jude Children's Hospital, will receive $14.9 million;
  • Pharmacogenomics of Arrhythmia Therapy, headed by Dan Roden at Vanderbilt University, will receive $14 million;
  • The Amish Pharmacogenomics of Antiplatelet Intervention Study, headed by Alan Shuldiner at the University of Maryland School of Medicine, will receive $7.5 million;
  • Pharmacogenetics of Phase II Drug Metabolizing Enzymes, headed by Richard Weinshilboum at the Mayo Clinic College of Medicine, will receive $12.6 million;
  • Pharmacogenetics of Asthma Treatment, headed by Scott Weiss at Brigham and Women's Hospital and Harvard Medical School, will receive $16.8 million.

Illumina to Develop Custom SNP BeadChip for Wellcome Trust Sanger Institute

Illumina will develop a custom SNP-genotyping BeadChip for the Wellcome Trust Sanger Institute and the Wellcome Trust Case-Control Consortium, the company said this week.

The custom Sentrix BeadChip will analyze so-called non-synonymous SNPs that cause amino acid changes in proteins. The chip, to be called cSNP-6 BeadChip, will allow researchers to study 15,000 SNPs on six samples simultaneously, using Illumina's Infinium assay. Its content will be derived from the HapMap project, of which Illumina and the WTSI are participants.

Researchers at the WTSI plan to use the chips to genotype more than 5,000 samples by the end of the year to study four common disease phenotypes. Following this project, Illumina intends to commercialize the microarray and will make its content available at that time.


CombiMatrix Wins $338K from US Air Force to Develop Arrays to Detect Pathogens

CombiMatrix has won a one-year, $338,000 contract from the US Air Force to develop and produce microarrays that detect pathogens, its parent company, Acacia Research, said this week.

Under the agreement, CombiMatrix will develop microarrays to detect pathogens that cause upper respiratory infections and that infect wounds. The first array will identify upper respiratory infections that can cause pneumonia, bird flu, and SARS. The Air Force Institute of Occupational Health has committed to purchasing the arrays for evaluation and use. CombiMatrix will be able to make them commercially available to other users as well.

The contract results from a prior collaboration with the AFIOH that led to the development of a microarray to identify different serotypes of influenza A.


CeMines' Estonian Subsidiary Seeks EU Clearance for Lung Cancer Dx

CeMines said this week that its Estonian subsidiary has filed for CE Mark registration for its gene expression-based lung cancer diagnostic.

CeMines filed for clearance through a Swedish business partner, Trial Form Support AB.

Golden, Colo.-based CeMines seeks EU clearance for clinical use of CellCorrect Lab test kits, which use a combination of its CellCorrect gene-expression-based auto-antibody detection technology, Molecular FingerPrinting statistical analysis platform, and a proprietary library of lung cancer biomarkers.


Gene Logic to Test Stalled Pfizer Drug Candidates for New Indications

Gene Logic will help Pfizer find new therapeutic indications for a number of its stalled drug candidates, Gene Logic said this week.

Under the "drug repositioning program," Gene Logic will test drug candidates from Pfizer that are no longer in development for their potential use across a wide spectrum of diseases areas, using its genomics and in silico technologies as well as technologies it acquired from Millennium Pharmaceuticals last year. Gene Logic is eligible for milestone payments and royalties on drugs that are commercialized as a result of the program.

The companies did not disclose other terms of the agreement.


Gene Logic Says Value of Assets from TherImmune Acquisition is Impaired, Lowers Revenue Expectations for Unit

Gene Logic said this week that the value of the goodwill asset from its 2003 acquisition of TherImmune Research is impaired.

The company will announce the amount of the impairment by Nov. 9 after completing its review with a third-party valuation specialist.

Prior to the impairment, the goodwill asset for TherImmune, Gene Logic's nonclinical services subsidiary that is now called Gene Logic Laboratories, was valued at $43 million. Gene Logic acquired TherImmune in April 2003 for $52 million in cash and stock. The company said that it does not expect this "potentially substantial impairment charge" to lead to any future cash expenditures.

Gene Logic also said it has reduced its revenue growth and financial performance assumptions for the Gene Logic Laboratories business due to "customer reaction to issues raised earlier by the FDA", which it has since addressed, and because the laboratories' capacity is underused.

As a result, Gene Logic will update its financial guidance for 2005 in its next quarterly earnings report in late October.

Nonclinical contract research services contributed $5.82 million to Gene Logic's total revenues of $20.1 million during the second quarter of 2005. In the same period of 2004, the unit contributed $6.0 million to the company's total rvenues of $18.6 million.


Transgenomic to Close $15M Private Placement of Common Stock

Transgenomic has received commitments from institutional investors for a $15 million private placement of common stock, the company said last week.

The investors, led by Lehman Brothers, have committed to purchase 15 million shares of Transgenomic's common stock priced at $1.01 per share. In addition, they will receive warrants to purchase another six million shares. The transaction, which is subject to shareholder approval and other conditions, is expected to close by the end of October.

Transgenomic said it will use net proceeds from the offering to repay its debt of approximately $9 million with Laurus Masters and for "general working capital needs."

"This private placement strengthens our balance sheet and better positions us to pursue the opportunities we've identified within our BioSystems business," said Transgenomic CEO Collion D'Silva in a company statement.

Earlier this week, Transgenomic escaped delisting on the Nasdaq exchange after its share price closed at or above $1 for 10 consecutive business days.


Applied Biosystems and Promega Settle Litigation Over PCR Technology

Applied Biosystems has settled its litigation with Promega over PCR technology, the company said this week.

Promega originally sued Hoffman-La Roche and Applera in the US District Court for the Eastern District of Virginia on behalf of the US government but the court dismissed the company's amended complaint with prejudice a year ago. Both Promega and Applera filed appeals at the time, which they have now withdrawn.

Promega's suit was based on the False Claims Act, also known as the Informer's Act or the Qui Tam Statute, which allows a private person to sue a person or company that knowingly submits false bills to the federal government.

Following the settlement, Promega can now negotiate a license to Roche's PCR patents with ABI, the exclusive licensor of the patents for life science research and applied fields, according to ABI.

Earlier in the month, Promega settled its PCR-related litigation with Roche.


Qiagen to Acquire PCR-Based Molecular Dx Maker Shenzhen PG Biotech of China for $14.5M

Qiagen plans to acquire Chinese molecular diagnostics company Shenzhen PG Biotech for $14.5 million in cash, Qiagen said this week.

Under the terms of the agreement, which is pending Chinese government approval and subject to certain closing conditions, Qiagen will acquire all outstanding shares of Shenzhen-based PG Biotech. More than half of the company's shares are currently held by state-owned institutions. Depending on the date of the closing, Qiagen expects the acquisition to contribute $6 million to $7 million in sales over 12 months.

PG Biotech, which has a staff of 120, with a "substantial number" in research and development, according to Qiagen, provides PCR-based molecular diagnostic assays in China. The company has more than 10 assays approved by the Chinese State Food and Drug Administration, including assays for pathogens such as SARS, HBV, HPV, Mycobacterium tuberculosis, Neisseria, and Chlamydia. In addition, PG Biotech provides assays for import/export controls and quarantine testing, and is developing panels for disease profiles. Qiagen said PG Biotech's business profile is "comparable" to that of Artus, which the company acquired earlier this year.

This is not Qiagen's first foray in to the Chinese market: in June, the company acquired nucleic acid reagent provider Tianwei Times. Qiagen also opened an office in Shanghai this year and strengthened its distribution channels with Gene Company.


Genome Canada Awards $2.8M to Atlantic Medical Genetics and Genome Initiative

Genome Canada will fund the Atlantic Medical Genetics and Genome Initiative, a Canadian disease genotyping project, with CA$3.2 million ($2.8 million), Genome Atlantic, a regional Genome Canada affiliate, said last week in a statement.

The initiative is a joint project that involves Memorial University and Dalhousie University, along with Genome Atlantic and The Atlantic Genome Center, the company said. The balance of the project's total funding of CA$9.2 ($7.9 million) will come from a "range of regional innovation and health research partners, Genome Atlantic said.

"Our research will pinpoint the genes that are the root causes of over 25 genetic diseases that affect Atlantic Canadians, and contribute to our overall understanding of the function of the 25,000 genes in the human genome," said Mark Samuels, a molecular researcher at Dalhousie University and co-principal investigator of AMGGI.

"This research will lead to improved methods for the early diagnosis of genetic diseases," including new genetic tests, said Pat Parfrey, clinical researcher at Memorial University and AMGGI investigator.


Illumina to Provide Multi-Year Genotyping Services to GlaxoSmithKline

Illumina will provide further genotyping services for GlaxoSmithKline, the company said last week.

Under the multi-year agreement, Illumina will use its Sentrix arrays as well as its GoldenGate and Infinium assays to analyze several thousand samples provided by GSK, which are part of several projects.

Illumina, which did not provide further details on the agreement, has already been providing genetic analyses for GSK since June 2001.

Filed under

The Scan

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LiveScience reports that Parabon NanoLabs researchers have reconstructed how three Egyptian mummies may have looked.

Study on Hold

The Spectrum 10K study has been put on hold due to a backlash, leading the researchers to conduct consultations with the autism community, Nature News reports.

Others Out There Already

Reuters reports that Sanofi is no longer developing an mRNA-based vaccine for SARS-CoV-2.

PNAS Papers on GWAS False Discovery, PRAMEF2 Role in Tumorigenesis, RNA Virus Reverse Genetics

In PNAS this week: strategy to account for GWAS false-discovery rates, role of PRAMEF2 in cancer development, and more.