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Bayer Dx Becomes First Disclosed Company to License AstraZeneca s ARMS Tool from DxS

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DxS's disclosure last week that Bayer Diagnostics would license its ARMS genotyping technology was the first deal of its kind the British company has announced since obtaining rights to commercialize the tool from AstraZeneca nearly 16 months ago.

The deal, which is a three-way agreement between Bayer Diagnostics, DxS, and British patent enforcer BTG, gives Bayer the right to use the mutation-detection tool to develop certain undisclosed assays.

The license also helps justify AstraZeneca's March 2004 decision to tap DxS to re-launch the well-known technology, a step it took in order to crack down on illegal uses and help drive additional revenue. "It's taken a little while to get to this point, but I think we expect to see quite an increase in activity over the next 12 months," Andrew Webb, director for sales and marketing at DxS, told Pharmacogenomics Reporter this week.

Bayer is DxS' second ARMS customer, though the first one the company would disclose. Webb declined to discuss specifics of the either agreement. AstraZeneca, which still owns the patents to the ARMS technology, had signed on 11 licensees before enlisting DxS.

Several years ago, the British drug maker, still called Zeneca, developed ARMS and began licensing it to different life-science companies through its diagnostics division, David Whitcombe, COO and co-founder of DxS and a former Zeneca researcher, told Pharmacogenomics Reporter last year.


"It's taken a little while to get to this point, but I think we expect to see quite an increase in activity over the next 12 months."

However, that licensing activity ceased after the company became AstraZeneca in 2001 and "decided that the nucleic acid diagnostics business was not needed," said Whitcombe. Consequently, many drug makers, diagnostics companies, and SNP-genotyping shops have been using the technology without a license.

"There probably isn't a drug company in the world that isn't using ARMS at least to some degree in their genetics and genotyping operations," Whitcombe said at the time. (In a telephone interview this week, Webb said that, to his knowledge, Bayer had not been using the ARMS platform since obtaining a license. Officials from Bayer did not return a telephone call seeking comment.)

By March 2004, sensing it was leaving money on the table, AstraZeneca hired DxS and BTG to track down companies using the popular tool and suggesting they begin formally licensing it. The drug maker also bet that DxS would make improvements to the technology while BTG lined up additional customers.

ARMS Dealing

As a genotyping platform, the ARMS technology has some advantages over rivals, according to researchers. "It's a strong alternative to the TaqMan and allele-specific hybridization approaches that are currently widely used," Whitcombe said at the time. "A single mismatch in the center of a 20-mer ASH probe can give some discrimination."

"The role of the probe is to both detect target and discriminate the match/mismatch. … In this approach, the absolute maximum signal ratio of match:mismatch is ~20:1.

"With ARMS, the enzyme 'sees' the local match/mismatch structure at the 3'-end of the primer with much greater resolution," Whitcombe went on. "Taq polymerase extends the fully matched template/primer hybrid much more efficiently than it would a mismatched template/primer hybrid. This ratio of efficiency can be as great as 106:1." A spokeswoman for ABI, which sells the TaqMan product line, did not return a call seeking comment.

Whitcombe said researchers can "specifically amplify matched templates in the presence of a million-fold excess of mismatch target. The job of the probe now is purely to detect the presence or absence of product, so high Tm probes are entirely appropriate."

The founders of DxS, who along with Whitcombe include CEO Stephen Little and chief financial officer Shalni Arora, are former researchers in Zeneca's diagnostics division who "have worked extensively with the technology" before the drug maker disbanded the unit five years ago. For his part, Webb, who has been director for sales and marketing at DxS since 2001, had AstraZeneca as an account while he was European sales director at Amersham Pharmacia.

"AstraZeneca probably correctly decided it didn't want to be in molecular diagnostics as a business," Whitcombe said.

It was during that time that Whitcombe and his AstraZeneca colleagues "expressed interest" in acquiring the ARMS technology. "Negotiations have been on and off to various degrees of coolness or enthusiasm over the last two or three years," he said.

But over the last few months, AstraZeneca "decided that they weren't exploiting it for themselves," and that somebody else might do a better job at getting it into the market, Whitcombe said.

AstraZeneca had always considered the technology a "strategic asset," but last year wanted to start attracting new licensing deals, said Whitcombe. He said AstraZeneca hired DxS because of its professional pedigree and because of the company's experience and success marketing Zeneca's Scorpions platform. [See PGx Reporter 2/7/03]

— Kirell Lakhman ([email protected])

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