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GE s New Growth Strategy May Complement CodeLink s Lengthy Developmental Horizon

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If General Electric’s bid to acquire Amersham is approved, the giant conglomerate will inherit an as-yet-unprofitable microarray platform in an emerging market that occupies a modest, if growing, revenue base.

Considering that GE has set its sites on buying the British life science-technology company with the aim of reviving battered net earnings, it may be tough to see where Amersham’s personalized medicine play, in the form of its nascent CodeLink product line, can help drive short-term revenue.

To be fair, a main target of GE’s acquisition bid is Amersham’s unique imaging chemistries, which would complement GE’s imaging platforms. Yet executives in both companies dropped hints last week that personalized medicine — and by extension the CodeLink platform — will become a focal point of GE’s health-care goals.

In the short term, then, GE will likely have to wait for the long term. And if that sounds like a contradiction in terms for a lumbering global conglomerate with 13 business divisions and $33 billion in revenues, think again. Difficult times — GE had an 11-percent drop in net earnings during the recent quarter — call for creative strategies. And for GE, a component of its new strategy might mean investing in new, and largely unproven, technologies with the aim of regaining strong growth over a longer horizon.

“We’re closing the door on a decade that was about capital markets and acquiring things, and opening the door on a new period that’s more about developing things,” GE CEO and chairman Jeffrey Immelt told MIT’s Technology Review magazine this month. “The companies that know how to develop things are ultimately going to create the most shareholder value.

“We are investing more R&D dollars on longer-range programs,” he said.

In that context, then, the Amersham acquisition, and the CodeLink product line, makes all the sense in the world.

The microarray space has become somewhat the belle of the biotechnology ball. The use of gene chips in pre-clinical drug-discovery labs together with their potential promise as key components of pharmacogenomics — especially with the recent launch of Roche’s and Amersham’s drug-metabolism chip offerings — has given microarrays new legs.

“Is this the right time to enter into the microarray business? I would say that it’s early, but the timing is probably right,” Mike Murphy, president and CEO of pharmacogenomics company Gentris, told SNPtech Reporter this week. He cited the impending US Food and Drug Administration guidance document that will define the use of microarrays as analyte-specific reagents used in clinical labs [See 7/19/03 SNPtech Reporter ]. “If GE is paying attention, and they see that not only as a challenge, but also as an opportunity, then I think the timing is right,” he said.

Researchers also believe that microarrays are beginning to mature. For example, last month at the annual Genome Sequencing and Analysis Conference — which has traditionally focused on gene-sequencing technologies — microarrays were topics of discussion in at least 12 of 34 talks. Rick Wilson, of the Washington University Genome Sequencing Center, discussed how his group is using comparative genomic hybridization on microarrays that contain sequence from BAC clones tiled onto the array, to compare genomic DNA from patient and control samples in studies of genetic mutations in prostate cancer, non-small cell lung cancer, AML, and other diseases, according to a report in last week’s Bioarray News, SNPtech Reporter’s sister publication.

Stephen Chanock, of the National Cancer Institute also spoke at GSAC on how microarray data provides a springboard for further study on gene expression, SNPs, and cancer. As part of the Cancer Genome Anatomy Project, Chanock has begun resequencing genes that were implicated in a 2000 Nature paper as differentially expressed in different subtypes of breast cancer. “We’ve taken these particular genes which fall out of microarray analysis,” and are resequencing them across the 5’ upstream region, the entire coding region, intronic segments with high similarity to other species such as mouse, and the 3’ region, he said.

The team resequenced these genes in tumor DNA from 92 Norwegian breast cancer patients, along with 100 controls from the same population, looked at the SNPs to establish linkage disequilibrium and haplotype structure, and are currently comparing these data with expression-array data in the hopes of getting a better picture of the way genetic variation and gene expression interact in breast cancer. “I feel strongly we need to bring the world of haplotypes and SNPs” to expression arrays, he said.

Joseph Nevins, a researcher at Duke University’s department of molecular genetics and microbiology, detailed how gene expression profiles of breast cancer subtypes derived from microarray experiments are being used in a clinical setting as “clinico-genomic predictors of disease recurrence” to aid in treatment decisions. Nevins stressed that applying these data to the clinical setting is only possible when “the higher ups” believe it is important. “Once it’s seen that [microarrays have] an impact and will change clinical decision making, then people will do it.”

“There’s a lot of work that needs to be done in the microarray area, but of course GE has a war chest of cash that they can put at it,” agreed Gentris’ Murphy, whose company uses the Nanogen Nanochip technology. But Amersham’s CodeLink, he said, “is a platform technology that will enable the rest of the asset estate that [GE is] purchasing. I think GE will hold onto it.”

— KL

 

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