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MAG is Dissolved, Key Technologies And Staff Go to Affymetrix and Celera

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ALO ALTO, Calif.--Molecular Applications Group’s internet homepage vanished from cyberspace and furniture was being removed from its offices here last month as executives concluded negotiations to sell ownership of the company’s key bioinformatics technologies, Stingray and Panther, to Affymetrix and Celera Genomics, respectively. CEO Debra Yu, who is a partner with the venture firm Bay City Capital, told BioInform that Molecular Applications’ Look and GeneMine technology were also sold in deals that she said were "not disclosable." Although Yu said that the web site was down due to a deliberate power outage during the holidays, and that it would be maintained to support Molecular Applications’ existing customers, she acknoweldged that the company has been dissolved.

The fate of the six-year-old bioinformatics company had been in question for at least the past year, since an organizational overhaul resulted in the replacement of CEO Myra Williams with board member and investor Yu. In April, Yu told BioInform that the "negative buzz" surrounding the company was undeserved and that a revamped business plan called for continued product marketing and software development. In June, Yu dispelled rumors that she was seeking a buyer for the company, noting that she was planning an additional financing round and conducting a CEO search. But her remark then that "most companies in our space will either die or merge" has turned out to be the more accurate prediction.

"Molecular Applications will be officially dissolved as a standalone company, and we are happy with the outcome," Yu told BioInform last week. "We have gotten our technology into the hands of powerful partners who will take the technology further, apply it in ways that will be beneficial to them, and have the distribution scale to disseminate them." Yu added that all employees had been taken care of in the various deals. No financial terms were disclosed.

In early December, Molecular Applications announced that it had sold ownership of its proprietary gene expression analysis software, Stingray, to Affymetrix. The product, which Molecular Applications launched last summer, was developed jointly by the companies for use analyzing data generated by Affymetrix’s GeneChip. Sources said that Affymetrix also hired several Molecular Applications software developers.

Dale Richardson, program manager for product marketing at Affymetrix, said that the GATC (Genetic Analysis Technology Consortium)-compliant software would "accelerate the use and understanding of expression data and the adoption of the GATC database standard."

Later last month, Yu finalized the sale of Molecular Applications’ gene- and protein-function determination software, Panther, to Celera. Celera also negotiated the hire of the entire Panther development team. Between 12 and 14 former Molecular Applications scientists, including senior scientists Kimmen Sjolander and Paul Thomas, will report to Gene Myers at Celera’s facility in Foster City, Calif. Tony Kerlavage, Celera’s senior director of bioinformatics, told BioInform the deal was "a great opportunity to bring in some very talented people who have been thinking about this problem for a year or more. It’s a strong core of scientists to expand on our algorithm development."

Kerlavage added that Celera intends to deploy Panther to enhance its own annotation efforts and to offer it as a service to customers for identifying orphan proteins. He explained, "If somebody finds a new neurotransmitter receptor, Panther narrows down the subfamily to which it belongs."

--Adrienne Burke

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