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Affymetrix, Panomics, Clinical Data, Decode Genetics, CombiMatrix

Affymetrix to Acquire Panomics for $73M
Affymetrix will pay $73 million in cash to acquire Panomics, a maker of assays for low- to mid-plex genetic, protein, and cellular analysis applications, Affy said this week.
Affymetrix said that the acquisition will strengthen its position in the high-growth validation and routine testing markets, and it will enable it to offer a more complete customer workflow that will combine Affy’s whole-genome microarray products with Panomics’ products focused on genes and proteins of interest.
In addition, Affy believes Panomics’ products will complement the liquid array technology that it acquired from True Materials over the summer, enabling the company “to address low- to mid-plex genetic analysis requirements more effectively in the future,” it said in a statement.
True Materials is developing a digitally encoded microparticle technology that the array manufacturer expects will help it enter low to mid-multiplex markets and compete with bead-based platforms [see PGx Reporter 07-30-08].
“As one company, we will be able to serve a much larger customer base around the world with a broader product portfolio that offers a more complete analysis workflow, enabling customers to perform experiments not possible on any other platform,” Affymetrix President Kevin King said in a statement.
The firms expect to close the deal by the end of 2008, subject to customary closing conditions and regulatory approvals. Affy said it would offer more details during its fourth-quarter and year-end conference call.

Clinical Data's PGxHealth to Open Cardiac Databases to the Public
PGxHealth, a division of Clinical Data, announced last week that it plans to make its Familion databases of genetic mutations associated with inherited cardiac conditions open to the public starting in spring 2009.
The data will be available through publicly accessible databases, which will be updated as new genetic information is collected through testing as part of a large-scale database project on inherited cardiac conditions.
Initially, the company plans to release anonymous data on two inherited channelopathies: long QT syndrome and Brugada syndrome. The databases will reportedly contain genetic data on an estimated 2,500 long QT syndrome patients and 200 Brugada syndrome patients, along with a reference population of 700 healthy volunteers.
PGxHealth also announced today that it is launching a new genetic test for arrhythmogenic right ventricular cardiomyopathy, an inherited and sometimes fatal progressive heart condition that affects an estimated one in 5,000 to one in 1,250 people. The test will be the third Familion genetic test launched by PGxHealth in the past 12 months.

Decode Genetics' Q3 Revenues Rise 10 Percent, Loss Narrows as Cash Dwindles
Decode Genetics reported last week that its revenues increased 10 percent and its net loss dropped 26 percent in the third quarter as the firm reduced expenses to preserve its dwindling cash.
The Reykjavik, Iceland-based firm generated revenues of $12 million for the three-month period ended Sept. 30, compared to revenues of $10.9 million for the third quarter of 2007. The company noted that as of the end of the quarter it had $17.7 million in deferred revenue that will be recognized over future reporting periods.
Decode’s net loss fell to $17.9 million from $24.2 million as the firm cut its expenses. The loss includes non-operating expense of $2.9 million related to the revaluation of non-current auction rate security investments held by the firm.
Its R&D costs for the quarter dropped 60 percent to $5.7 million from $14.1 million, and its SG&A spending declined 6 percent to $6.7 million from $7.1 million.
Decode listed $35.5 million in cash and investments as of the end of the quarter, of which $11.8 million is liquid funds available to fund operating activities. The firm said that its third-quarter burn rate was $12 million.
“The company is undertaking a review of its long-term business strategy with the goal of sharpening the focus of its business, selling assets, securing partnerships, and utilizing the resources generated to support product development and marketing efforts in its core business,” Decode said in a statement.
Decode initially informed investors a few weeks ago that it was undertaking the review and would seek to sell non-core assets. In addition, it said that it had elected to utilize a 30-day grace period for the scheduled Oct. 15 interest payment on its outstanding 3.5 percent senior convertible notes due 2011, as it completes the review and considers the sale of those assets.

CombiMatrix's Q3 Revenues Drop 41 Percent
CombiMatrix reported last week that its third-quarter revenues fell 41 percent due to reduced funding from government contracts year over year and a sharp drop in product sales.
The Mukilteo, Wash.-based firm generated total revenues of $1 million for the three-month period ended Sept. 30, compared to revenues of $1.7 million for the third quarter of 2007. Its government contracts revenue declined to $343,000 from $627,000, while its product sales fell to $140,000 from $828,000, and its services revenues increased sharply to $466,000 from $164,000. Revenues from collaboration agreements were flat at $62,000.
CombiMatrix President and CEO Amit Kumar said that the firm’s revenue was “impacted by a slowdown in capital equipment sales as well as a modest decrease in DoD utilization.” He added that the lower revenue from the Department of Defense was due to the completion of two contracts — though the firm announced in July that it had received a new contract worth $923,000 to develop a handheld biochemical detection system.
Kumar noted during the call that one of the firm’s four salespeople left the company at the beginning of the third quarter, which had a negative effect on product sales. He said since that time the company has added three salespeople, bringing its total sales staff to six people, who are focused primarily on diagnostics sales.
“The core focus of our business, diagnostic services, continued to grow and was 226 percent higher than the third quarter of 2007 and 17 percent higher than the second quarter of 2008,” Kumar said in a statement. “We continue to launch new products and plan to meet our commitment of at least one diagnostic product launch per quarter throughout 2007 and 2008.”
The firm plans to launch a prostate cancer assay during the last quarter of this year, he noted.
CombiMatrix posted a third-quarter net loss of $4.2 million up around 26 percent from a loss of $3.4 million for the third quarter of 2007.
The firm’s R&D expenses dropped around 32 percent to $1.3 million from $1.9 million, while its SG&A spending increased around 5 percent to $2.3 million from $2.2 million.
CombiMatrix finished the quarter with $11.1 million in cash, cash equivalents, and available-for-sale investments. During the summer, the company bolstered its balance sheet by raising $10 million in a convertible debt financing.
CombiMatrix is awaiting a payment of around $36 million from a judgment in its favor from US District Court for the Central District of California. That judgment came in May and ordered the National Union Fire Insurance Company to pay CombiMatrix that amount for refusing to defend and indemnify CombiMatrix under its director and officer’s insurance policy.
National Union has since appealed the judgment. Kumar noted during the call that the judgment would continue to collect interest until a final judgment on the appeal. He said that he believes CombiMatrix has enough cash, based on its current burn rate, to sufficiently finance its operations for the next four to five quarters, during which time it hopes to receive the payment from National Union.
“Although the capital markets and global economy are in turmoil, we are extremely fortunate that we do not have a need for any immediate financing,” said Kumar.

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The Scan

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