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Affymetrix's Q1 Revenues Rise on CytoScan Adoption, Biobank Opportunities, Ag-bio Growth

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NEW YORK (GenomeWeb) – Sales of Affymetrix's CytoScan offering for chromosomal microarray analysis helped lift the vendor's first quarter revenues by 7 percent, the company said last week. During an earnings call with investors, Affymetrix executives provided an update on the firm's flagship product as well as opportunities in agricultural biotechnology, biobank screening, and oncology research.

For the three months ended March 31, Affymetrix reported revenues of $83 million compared to $77.9 in the prior year period. CEO Frank Witney attributed the spike in revenues to a 25 percent year-over-year jump in CytoScan sales. By the end of Q1, Witney noted, CytoScan sales accounted for an eighth of Affymetrix's total revenues.

"The growth in this product line is being driven by expanding our customer base in all geographies, increasing our sales in existing accounts, and expanding our base of research-use-only applications in reproductive health and oncology," Witney said.

The majority of arrays used in CMA today are sold for research use only, and offered as components of laboratory-developed tests by CLIA-compliant laboratories. However, in January, the US Food and Drug Administration cleared Affymetrix's CytoScan DX Assay, enabling it to market the test as an in vitro diagnostic to end users.

Though Illumina has filed its assay for CMA with the agency and Agilent Technologies is preparing a submission, Affymetrix is the sole microarray vendor at this time to have an FDA-cleared test for constitutional cytogenetic testing on the market. In addition, Witney noted that Affymetrix last month achieved a CE-IVD marking for the CytoScan Dx Assay, which will allow it to sell the test to clinical laboratories in Europe.

"We believe that both of these clearances strengthen our competitive advantage, will help us to convert new accounts, and take market share from the competition," Witney said. "We also expect these approvals to help drive increased demand for instruments as more labs and hospitals add CytoScan Dx to their offerings."

According to Witney, Affymetrix expects to begin shipping the CytoScan Dx Assay over the next few quarters and remains "optimistic about the long-term growth prospects of this product line."

During the call, an analyst asked Affymetrix's team about PerkinElmer's recent decision to close its Signature Genomics CMA service business and any risks associated with CytoScan's uptake in the reproductive health market. PerkinElmer had cited a tough reimbursement environment, as well as competition from next-generation sequencing-based non-invasive prenatal testing as reasons for the move.

"I don't think there's risk," COO Andy Last responded, noting that he had read PerkinElmer's statements. "I don't think we're seeing any major shifts in buying patterns or trends from our business point of view."

Last said in response to another question that the FDA clearance of the CytoScan Dx Assay may help it on the reimbursement front. "We're seeing signs of it increasing coverage from payors as a consequence of the clearance and so we expect that to continue," he said. He also characterized the reimbursement environment for CMA as "very competitive and strange right now."

Biobanks and ag-bio

Including cytogenetics, Affymetrix saw its genotyping products and services business grow by nearly a third in Q1, driven by adoption of its Axiom platform by biobank and ag-bio customers.

A year ago, Affymetrix inked an agreement with the UK Biobank to genotype its 500,000-sample repository using a custom designed array, and commenced genotyping the samples late last year. Witney said that Affymetrix delivered the first installment of data to UKBB in Q1, and CFO Gavin Wood said that the company expects to recognize the majority of UKBB-related revenue in 2014.

Affymetrix's arrays will be used to genotype roughly 200,000 samples as part of the US Department of Veteran Affairs' Million Veterans Program, and Witney said that Affymetrix has been selected as the "platform of choice for other new biobanking projects in China, Brazil, Taiwan, and other countries," though he did not elaborate.

Another genotyping opportunity for Affymetrix is in ag-bio. Witney estimated the annual addressable market size as about $500 million and growing rapidly.

"This is a market in the early stages of adoption with significant long-term growth potential across a broad range of customers for both project-based and routine-use applications," Witney said. He cited recent contracts with an unnamed European customer to genotype a number of plant species, and a collaboration with Chinese researchers to develop an array for maize research as examples of this market trend.

Witney credited the company's Axiom-384HT product, offered in a 384-sample, multi-well format, with the firm's gains, stating that the ag-bio market is "attracted by the data quality, high throughput, and cost-effectiveness on the platform."

Later this quarter, Affymetrix will launch its first catalog Axiom-384HT product, which it designed together with partners at the University of Bristol in the UK for genotyping wheat. Wood said that ag-bio is a "very fast-growing part of our business" and that Affymetrix believes "there's a significant pipeline of ag customers out there for us to gain."

OncoScan uptake

Another contributor to Affymetrix's genotyping momentum is its OncoScan FFPE Assay Kit, which allows users to obtain copy number information on about 900 cancer genes from formalin-fixed, paraffin-embedded tumor samples.

"We're seeing interest in both cancer centers as well as in biopharma and pharma, as people start to understand the importance of copy number variation, whether it's as biomarker signatures or as translational markers in diagnostics," Witney said of the new product's adoption.

He said there are now "numerous accounts assessing the product or running projects across a broad range of solid tumor types" and that "early feedback supports [Affymetrix's] belief that OncoScan is the product of choice for accurate genome-wide structural analysis from retrospective or prospective tumor biopsies."

Last month, Affymetrix entered into an agreement with CollabRx that enables clinical research labs to interpret OncoScan, as well as CytoScan, microarray data within the architecture of CollabRx's Gene Variant Annotation Service, allowing labs to "leverage copy number variation data from OncoScan to augment the somatic mutations being identified by sequencing," Witney said.

He portrayed OncoScan as being "highly complementary to NGS," and said that there is a "growing body of evidence that clinical oncologists can achieve a more comprehensive understanding of cancer by characterizing both somatic mutations and copy number variation in tumor samples."

Gavin Gordon, CollabRx's vice president of business development and strategic alliances, told BioArray News at the time the deal was announced that CollabRx's customers are "either already working with Affymetrix or they are looking at moving to its platform for copy number."

Affymetrix believes this trend will "help fuel the broader adoption of OncoScan as the industry-leading platform for the analysis of copy number and oncology," Witney said last week.

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