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DoubleTwist Reveals Sizable Customer Base as it Emerges from Quiet Period

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Contrary to the appearance of financial trouble suggested by its recent layoffs and the withdrawal of its IPO, DoubleTwist said last week that it has experienced consistent growth since launching its annotated human database last summer.

DoubleTwist, based in Oakland, Calif., announced it signed on over 20 new subscribers to its online suite of genomic data and analysis tools in the first quarter of 2001. It also announced that Rigel Pharmaceuticals of South San Francisco, Calif., had licensed its Clustering and Alignment Tools (CAT) for organizing expressed sequence tags and mRNA sequences into full-length gene sequences.

But these are just a fraction of the customers DoubleTwist has gained since it began commercially licensing its proprietary genomic data, according to spokeswoman Nicole Litchfield.

Litchfield said that because the launch of its database corresponded with the beginning of the company’s quiet period, “we were selective about which accounts we announced.”

One exception, Litchfield noted, was DoubleTwist’s deal with Merck, which the company announced in November.

New subscribers that DoubleTwist signed on in the first quarter of 2001 include Affibody, Beth Israel Deaconess Medical Center, Taiwan’s Biomedical Engineering Center, Boystown National Research Hospital, Celgene, Cureon, Evotec, Ferring Research Institute, GPC Biotech, ImClone Systems, Immusol, H. Lundbeck, Neurogenetics, ONO Pharmaceutical, OSI Pharmaceuticals, PPD Discovery, Hoffmann-La Roche, the University of Minnesota, the University of Tokyo, Xenoport, and an unnamed European pharmaceutical company.

Litchfield said that these organizations are among a total of 100 database license agreements, many of which went unannounced due to the quiet period. Other subscribers include Allergan, Baylor College of Medicine, Boehringer Ingelheim, Cephalon, Chiron Corporation, Cocencys, Elan Pharmaceuticals, Genaissance Pharmaceuticals, Grupo Estudios Multicentricos en Argentina (GEMA), Harvard University, Howard Hughes Medical Institute, the University of California San Francisco, and the University of Texas.

This number includes both Gold or Silver subscriptions to DoubleTwist.com and subscriptions to the company’s Prophecy suite, an installed version of the annotated human database along with software for data visualization and interpretation.

The “vast majority” of the new subscriptions are at the Gold level, Litchfield said, but a further breakdown was not provided.

“This subscription activity is consistent with the company’s growth over the past year,” said Robert Williamson, DoubleTwist president. “You will be hearing more good news from us.”

The good news also includes additional corporate customers for its Clustering and Alignment Tools, but DoubleTwist said it could not disclose the identity of these companies due to confidentiality clauses in their contracts.

Currently, over 25 companies subscribe to CAT, including Millennium Pharmaceuticals, Affymetrix, and Bristol-Myers Squibb. The CAT technology is also used in the creation of DoubleTwist’s Gene Index databases.

CAT arranges EST and mRNA sequence information into full-length genes, isolates and analyzes alternative splice forms, and uses statistics to correct sequencing and cloning errors.

Raul Rodriguez, vice president of business development at Rigel, said the company considered several other products before deciding on DoubleTwist’s CAT. “This was a product that was well established, that was well supported,” Rodriguez said. “Generally, it did what it said it did, so it seemed to be the right product to buy.”

Rigel intends to use the package to analyze sequence data it derives in its search for novel targets. Rodriguez said that Rigel first infects millions of cells with pieces of genetic material whose sequence is unknown. By tracking how the infected cells react to certain stimuli, Rigel is able to locate cells that exhibit desired functions so it can focus on those sequences that caused cells to behave a certain way.

“Once we know what the sequence is we then do a bioinformatics analysis of that sequence and that’s where [CAT] will be useful,” said Rodriguez.

The disclosure of DoubleTwist’s subscriber base should help quell the rumor mill buzz about the company’s imminent demise. Indeed, the prognosis wasn’t a healthy one in March, when the company cancelled its initial public offering and laid off 20 employees, or about 10 percent of its staff, in a move to streamline its operations. As of September, the company had just $24 million in cash.

“Any rumors that our company was facing a demise are unsubstantiated,” said Williamson.

The deals should be a healthy source of revenue for the company. Litchfield said that a typical commercial installation of Prophecy is “generally a seven-figure solution of data and associated tools.”

Commercial prices for online access to the company’s proprietary data via DoubleTwist.com range from $1,800 per person/per year for access to the Gene Index databases to $10,800 per person/ per year for access to the online annotated human genome database and Gene Index databases, Litchfield said.

Williamson noted, “Since we launched the first annotated human genome database last summer, we have been pleased with the continued momentum we have experienced with organizations wishing to license access to our data either through our online or onsite solution. And, we are continuing to add to our initial offering to make these products even more valuable to our customers.”

— BT and MMJ

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