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Incyte Acquires Hexagen, Forms Unit To Map and Sequence Human Genome

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PALO ALTO, Calif.--Incyte Pharmaceuticals this month announced the formation of a new pharmacogenetics division, Incyte Genetics, to commercialize proprietary gene mapping, polymorphism discovery, sequencing, and pharmacogenetics technology and programs. Incyte CFO Denise Gilbert told BioInform that the new division will run three integrated programs in mapping, sequencing, and identifying polymorphisms.

The new business unit intends to create a transcript map of the human genome within one year, and to sequence the genome's coding DNA within two years, Gilbert said. "We are sequencing the DNA of genes and the DNA around genes. We are not focusing on noncoding DNA," she explained. Incyte's current database of human genes will be used as a starting point, Gilbert said.

Incyte also aims to identify single nucleotide polymorphisms for every gene within two years. In a move that the company said will enable its new division to accelerate detection of gene variation in thousands of DNA samples quickly, Incyte will acquire, for $5 million cash and 1 million shares of its stock, the UK firm Hexagen. Hexagen, established in 1996, possesses technology for rapid discovery of SNP's that was developed at the Cambridge University laboratory of Peter Goodfellow. Hexagen's 45-person scientific staff will maintain its Cambridge facilities.

Pharmacogenetic products

The result of the new programs will be three new databases to be launched by the genetics division: LifeSeq Atlas, a gene mapping database, the LifeSeq Genome database of human genome sequence, and LifeSNP, a polymorphism database.

While Incyte's current business is focused on RNA and proteins, providing information on what genes are turned on or off, the new division will focus on core DNA, Gilbert explained. Incyte Chief Inform ation Officer Scott Clark told BioInform the new databases will be sold separately but can be integrated with the company's other database products. Incyte's will be the only integrated polymorphism, mapping, and genome sequence programs available, the company claimed.

Incyte said it will invest a total of $200 million in the new business unit in its first two years, including $20-30 million in cash before the end of the year. The remaining balance will come from subscription revenues, related product fees, and investments from partners and the equity markets, the company projected.

Incyte's announcement was portrayed in the media as a direct challenge to Celera Genomics' plan to sequence the human genome in three years. A spokesman for Celera said that officials there were still waiting to find out exactly what Incyte's goal is. Gilbert said the difference between Incyte's project and Celera's is that "Celera wants to sequence the genome about 10 times over, which is statistically necessary" to achieve the entire sequence. Incyte instead will sequence, once within one year and three times within two years, only the coding and nearby DNA regions, she reiterated.

Although Incyte shares dropped to a 52-week low in the days following its August 17 announcement, investment firms BT Alex Brown and Baring Furman Selz raised their ratings of Incyte stock from "buy" to "strong buy" last week.

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