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Molecular Mining, LabCorp, Bush administration, Illumina


Molecular Mining Calls It Quits After Soaring Debts Surpass Sales Hopes

Bruised by deteriorating sales and swelling debts, gene expression-analysis software firm Molecular Mining has gone out of business, the Canadian company said this week.

Molecular Mining, which sold a line of microarray-analysis software called GeneLinker, has shut its doors and is currently considering options for liquidating its assets, said John Molloy, president and CEO of PARTEQ Innovations, the technology-commercialization agency for Queen’s University in Kingston. Molloy helped launch Molecular Mining in 1997, and is also on the company’s board of directors.

As of last December, the Kingston, Ontario-based company had more than 40 employees between its Kingston headquarters and a sales office in Cambridge, Mass. Layoffs began in January, when it discontinued its in-house drug-discovery projects. At the time, Molecular Mining CEO Evan Steeg told SNPTech Reporter’s sister publication BioInform that the company was focusing its efforts on software sales to generate short-term revenues.

Molecular Mining had raised more than US$10 million in financing and claimed to have more than 100 users for its GeneLinker Gold and GeneLinker Platinum software products.

While the future of the company’s intellectual property and other assets is “still up in the air,” the board of directors intends to have a clearer picture of how these assets will be handled “in the next week or so,” Molloy said.

Molloy added that the board intends to keep the technology available in some form. “We are going to make an effort to try and keep all of the technology packaged together to be able to maintain momentum that has been built up for the product ... whether it’s a restart, or a consulting organization, or whatever kind of organization gets put together to try to move the technology forward.”

Buoyed By Genetic Tests, LabCorp to Boost Molecular-Dx Offerings; Seeks New Partners

LabCorp has attributed a surge in sales last year to strong demand for genetic testing. This demand, and the weight it adds to LabCorp’s top line, has caused the giant reference lab to create an office that deals specifically with new licensing agreements with potential tool and data vendors.

“A very important element of LabCorp’s strategic plan … is to do licensing arrangements and partnerships with genomic companies,” according to LabCorp spokeswoman Pamela Sherry. “That is very core to our strategy. And that will be increasing.”

To that end, the company last year developed a department whose chief purpose is to foster licensing relationships with tool and data vendors. The division is overseen by Brad Smith, executive vice president of licensing. Sherry said Smith’s department is a component of SG&A spending, which grew to $585 million in 2002 from $516.5 million in 2001. She would not quantify the rate at which Smith’s departmental budget will increase in 2003.

Late last month, LabCorp said fourth-quarter financial results were “fueled” by genomic testing. The company said total testing volume rose 13 percent, while prices inched up 2.3 percent from fourth quarter 2001. What’s more, LabCorp said it views gene-based cancer testing as one of the most important growth opportunities over the next three to five years.

“We have seen continuing growth in our molecular-based testing; that is a core strategy we’re focusing on,” Sherry told SNPtech Reporter. Later this year, LabCorp plans to introduce a colorectal cancer-screening test made by Exact Sciences. After that the reference lab will bring on board a test made by Correlogic Systems that detects early-stage ovarian cancer. “We are also seeking other partnerships,” Sherry said.


Bush Administration Seeks to Infuse $1 Billion into Forensics Efforts

US President George W. Bush this week said he wants to invest $1 billion into DNA testing in the United States over the next five years in the hopes of helping investigators whittle away at a swelling backlog of criminal genetic evidence.

US Attorney General John Ashcroft said he would also set aside federal money so that convicted felons who claim to be innocent can obtain DNA testing. “DNA evidence can breathe new life into long-dormant investigations,” Ashcroft was quoted in the media as saying on Tuesday.

The US Justice Department wants to spend $232 million in fiscal 2004 on DNA programs, an increase of 77 percent. That would be the first step in a five-year plan to increase funds by a total of $1 billion. It was not immediately clear how much of that funding would go toward developing or purchasing new technologies.

In prepared remarks to reporters at the Justice Department, Ashcroft said he met with President Bush earlier this week “to discuss the president’s new DNA Initiative, entitled ‘Advancing Justice Through DNA Technology,’” United Press International reported Ashcroft as saying. “The president is committed to realizing the full potential of DNA technology to solve crime and protect the innocent.”

“Under the president’s initiative, we will improve the use of DNA technology in the criminal justice system — especially in federal, state, and local forensic laboratories — by providing funds, training and assistance,” he added.

Ashcroft said the initiative, which must be approved by the Congress, will allow law-enforcement agencies to analyze rape kits and other cold-case evidence that has gone unexamined; conduct DNA analysis of more offender samples; identify missing persons through enhanced DNA-testing methods; and help exonerate individuals wrongly accused or convicted of crimes, according to UPI.

Such a broad statement of support would be welcome news to companies like Orchid Biosciences, for whom forensics represents a main pillar of growth.

Justice Department officials estimate that states have a backlog of 350,000 untested samples from rape and homicide cases. What’s more, roughly 200,000 to 300,000 samples taken from convicted offenders for possible matches have also gone untested.

The national Combined DNA Index System has 1.4 million DNA profiles of convicted offenders. Moreover, there are more than 130 public crime labs in the United States that can conduct DNA testing, but fewer than 10 percent have the automated facilities needed to conduct efficient testing, the attorney general told reporters.

Ashcroft told reporters that the president has told the department to eliminate the backlogs completely within five years, “and we will do so.”


Illumina Names Friend of Flatley to Oversee Japanese Subsidiary

Illumina has hired a Clontech veteran and former colleague of CEO Jay Flatley to run the company’s newly established Japanese subsidiary, SNPtech Reporter has learned.

In his new position, Junya Tominaga will oversee four staffers who will sell Illumina’s oligos and genotyping platforms, Flatley said. He comes to Illumina from Clontech, which was acquired by Becton Dickinson. Flatley had originally hired Tominaga at Molecular Dynamics in the early 1990s. Tominaga worked there until the company was acquired by Amersham.

Flatley also said that plans for the European market are on track: Illumina now has divisions in Germany and in the UK. Sandy McBean covers the northern European market in the UK, and Armin Winands oversees southern Europe. They share the title of regional business manager.

“We have a plan to hire three or four additional people for the European market before the end of the year,” said Flatley. Beside McBean and Winands, Illumina currently employs one other individual in Europe, a support person based in the UK.


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