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No Love Lost? As Acquisition Nears, Hyseq Ponders Future of Variagenics Technology


Two months after announcing its intent to acquire Variagenics for its cash, Hyseq said it is close to deciding which technologies it will keep and which it will abandon. At this point, Variagenics’ SNP database appears to have the edge and will likely have a home when the two companies tie the knot at the end of this month.

In December, results of a review committee prompted Hyseq to lay off 65 employees at its Sunnyvale, Calif., headquarters; some of the 80 staffers who work at the company’s Boston space are now under review and may face a similar fate.

“Obviously that number will not remain at 80 … after the integration is complete,” said Ted Love, Hyseq’s president. He reaffirmed that the new company, which does not yet have a name, intends to employ between 100 and 110 people. The companies currently employ roughly 135 people.

Although the fate of Variagenics’ NuCleave SNP and haplotype platforms appeared dim when Hyseq said it was buying the firm to fortify its own depleted bank balance, Hyseq said it is reviewing options for Variagenics’ assets and suggested it will likely hold on to its SNP database.

“Variagenics’ knowledge of SNPs and what those SNPs can do in terms of clinical outcome means we might be able to integrate it with some of our” IP for clinical trials, explained Love.

What’s more, Variagenics’ technology has already made Hyseq a more attractive partner: On Jan. 14, Variagenics licensed to Celera Diagnostics the patent rights to a human gene, methylenetetrahydrofolate reductase, that may play a role in the development of stroke, myocardial infarction, and certain CNS disorders.

“The breadth of discussions for Hyseq and Variagenics, in terms of partners, has increased,” said Love. “We think that as a new company we will be able to do broader and deeper deals.”

However, other Variagenics assets will not share that fate. “I think there will likely be something that we decide are not priorities going forward, and those things will be divested, if that makes sense for us,” said Love. He declined to disclose which Variagenics assets are destined for the auction block or the rubbish heap.

Looking ahead, Love hinted Hyseq’s next conquest will be a product company rather than a tool vendor.

— KL

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