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New Data Mining Company Is Joint Venture of Incyte, SmithKline Beecham

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SANTA CLARA, Calif.--Two of the biggest names in bioinformatics have struck a $25 million deal to form a new company here that will harness the power of data mining to develop novel molecular products for diagnosing disease.

On September 2, Philadelphia-based SmithKline Beecham and Palo Alto-based Incyte Pharmaceuticals announced that they had formed diaDexus, a joint venture company. Under an agreement that gives each partner a 50 percent share in the new venture, diaDexus becomes the only company with access to two of the world's largest repositories of proprietary genomic databases and bioinformatics tools.

"Diadexus will be rich in bioinformatics," Marian Marra, Incyte's vice-president for R&D ventures, told BioInform. "It will not have to recreate the wheel, however. Instead, it will have access to the premier platforms developed by both partners. Those resources will play an important role in figuring out what the appropriate diagnostic tools are and moving them into development."

As part of the deal, the two parent companies have given diaDexus extensive access to their proprietary bioinformatics and genomics holdings. For example, SmithKline has given diaDexus exclusive rights to base new tests on its own novel molecular targets and genetic alterations identified during drug discovery efforts and from SmithKline's collaboration with Human Genome Sciences. For its part, Incyte will provide diaDexus with nonexclusive access to its human and microbial databases--which include LifeSeq, LifeSeq FL, LifeSeq Atlas, LifeSeq GeneAlbum, and PathoSeq--for diagnostic applications, and to its GeneJet array technology. Both companies have also assigned additional technologies and intellectual property rights in the diagnostic field to the new company.

Initially, diaDexus will focus on developing new molecular agents used in disease detection tests. In particular, it will develop unique diagnostic markers for so-called "homebrew tests" for reference laboratory testing and for license to diagnostic kit manufacturers. Ultimately, diaDexus plans to develop its own capacity to manufacture kits for sale to clinical testing laboratories.

Bioinformatics Plays an Important Role

"Bioinformatics was very important, but not the key to the deal," Mike King, a biotech analyst with Vector Securities in Deerfield, Ill., told BioInform. He called Incyte's "informatics capability as good as it gets in the industry," but believed the union was "more driven by the content of the databases than the bioinformatics. But of course it's hard to realize any utility from the databases without a strong bioinformatics program."

George Poste, chairman of the board of diaDexus and SmithKline's chief scientific and technology officer, said the new company's "unparalleled access to genomic information, technology, and intellectual property" makes it "uniquely situated to be a leader in the discovery of novel, proprietary diagnostics and to drive the evolution of pharmacogenomics to optimize drug treatment selection for patients." Incyte President Randy Scott, also a member of the diaDexus board, predicted that the company will become "a powerful force in the world of diagnostics and molecular medicine."

Joining Poste and Scott on the diaDexus Board of Directors are Tadataka Yamada, president of SmithKline's Healthcare Services, and Roy Whitfield, Incyte's CEO. Other key senior appointments include John Burczak, currently SmithKline's R&D director for molecular diagnostics, to vice-president of R&D for diaDexus; Patrick Plewman, currently SmithKline's director of business development for molecular diagnostics, to diaDexus's vice-president of corporate development; and Janet Nibel, currently Incyte's director of finance and administration, to vice-president and chief financial officer for diaDexus.

The new company has begun the search for a CEO, and Incyte's Marra said it is also looking to hire researchers with a strong understanding of how to apply bioinformatics. "We need people who are biology driven and skilled in using bioinformatics rather than developing new tools," she commented, "but there will be at least a couple of people focused on getting the most we can out of the databases." The company will move into its headquarters here by the end of the year, Marra said, and will have about 30 employees through the first half of 1998, mainly taken from the two parent companies. By the end of next year there should be about 55 employees. Most will be diagnostic development staff who are bioinformatics users, but there might also be a few bioinformaticists, a spokeswoman told BioInform.

Officials said the name of the new company, which has been established as a limited liability company (LLC), is derived from Greek words meaning "presaging good fortune, in anticipation of future discoveries."

--David Malakoff

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