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Applied Microarrays, Expression Analysis Plan to Expand as Demand for Outsourcing Grows

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Applied Microarrays and Expression Analysis last week separately announced plans to expand the scope of their respective businesses in response to what they said is increased desire from pharmaceutical and biotechnology companies to outsource their array production and array-based research projects.

Tempe, Ariz.-based AMI, which in 2007 bought all of GE Healthcare’s Codelink bioarray assets other than its slide chemistry, has already hired additional scientists and logistics personnel and this year plans to expand its manufacturing space and add additional OEM capabilities (see BAN 5/8/2007).

Meantime, Durham, NC-based genomic-services company Expression Analysis is also set to expand in response to what it calls an increased preference among drug makers to outsource array research. EA is a certified services provider for the Affymetrix and Illumina microarray platforms. Its clients include Wyeth and GlaxoSmithKline.

AMI

Applied Microarrays CEO Alastair Malcolm told BioArray News last week that demand for the company’s OEM services business, which now generates around 90 percent of its revenues, has experienced an increase in demand over the past year. Sales of catalog Codelink bioarrays make up the remaining 10 percent of revenue. Malcolm declined to provide more exact revenue figures for the privately held firm.

"The reason people are coming to us is the general economic environment," said Malcolm. "Companies are strapped for cash; it is difficult to raise money, and so we find that companies starting up with particular bioassays are interested in outsourcing.

“Regardless of our customers’ size, there has been a common need to preserve capital," he added.

As part of its expansion plans, the company intends to add lab space; integrate new components to its biojet array printers to expand its printing capabilities; and introduce a non-array small volume dispensing service, Stacey Stewart, AMI's new vice president of commercial operations, told BioArray News this week.

"We will create packages [[for OEM clients], add labels, and send it to their customers if they want," Stewart said.

AMI still supports the Codelink human, mouse, and rat whole-genome expression arrays. Stewart said the company's customer base for these products is "loyal." He added that AMI is not seeking out new Codelink customers and does not plan to add any products to the Codelink portfolio due to concerns of "potentially leading to competition" with AMI's OEM clients.

Malcolm said another factor contributing to the growth of its OEM business is the increased interest by researchers to go directly to protein studies, which is another AMI service.

"The application of protein arrays and the availability of good, well-characterized antibodies is making that more interesting," said Malcolm. "If you are really interested in protein these days you go straight to the proteins instead of inferring the protein of the genes.”

Malcolm added that AMI has seen demand grow for forward- and reverse-phase protein arrays; bacterial artificial chromosome arrays; and bacteria and mammalian cell-capture assays.

Because of the increasing variety of arrays it is expected to produce, AMI has also had to bring in personnel with expertise in assay development. "Over the last three months we have added more engineers and scientists to the operation," said Malcolm, without elaborating. "We have brought in people who have come to us with eight to 10 years experience in surface chemistries and adapted particularly well to proteins," he said.

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AMI is also seeking to outsource "some custom automation for some special projects" to handle its increased workload. "Our customers are beginning to ask us to bundle reagents with our arrays and we are adding space for custom spotting with [our] reagents business," he said. "We do the final formulation and final packaging." It was not immediately clear when, for what projects, or to whom it will commission such tasks.

Malcolm said that AMI has decided to focus on its OEM business rather than looking at other markets in which it can expand the Codelink platform because the "market for high-density arrays is crowded.”

Rather, AMI "decided to focus on markets that are not as well served by the four major [array] companies" — Affymetrix, Agilent Technologies, Illumina, and Roche NimbleGen, he said. "We changed the business model to being contract developer and manufacturer."

Expression Analysis

Karen Michailo, director of marketing at privately held Expression Analysis, told BioArray News this week that the company has experienced a recent uptick in growth and is adding personnel and branching out into foreign markets to reach more customers. She did not disclose annual revenues.

"I think everybody in our area of expertise is experiencing a growth because, unfortunately, of layoffs at pharmas," Michailo said. "Our business is also growing on the biotech end and we are receiving a lot of new referral business."

She said the company recently hired an IT expert, a bioinformatics expert, and a sales-support expert, and is looking for two more lab personnel: one PhD and one non-PhD researcher. EA currently employs 35 people, Michailo said. Two years ago, it employed 15.

EA said last week that it is partnering with Complement Genomics of Sunderland, UK, to offer its genomic services in the UK and Ireland. The firm currently sells products only in the US.

Complement Genomics offers a range of services through its Geneblitz unit, including genotyping, DNA sequencing, forensic testing, toxicology, and drug-analysis protocols.

The companies plan to focus the partnership on genome-wide association studies, which EA said have become an "increasingly larger part" of its business, Michailo said.

When asked if EA will soon expand to other foreign markets, she said the company is "looking at all of its options."

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