MADISON, Wis.—In early October, NimbleGen Systems Inc. announced it reached a non-exclusive worldwide license deal with microarray specialist Affymetrix Inc. encompassing the manufacture, use and sale of nucleic acid microarrays, related products and services aimed at the life sciences. Neither the financial terms nor the exact IP licensed to NimbleGen were released.
For NimbleGen, access to the patents marks a watershed moment for the company as it looks to diversify from its current service model.
"We are fundamentally changing our business model and obtaining these licenses represents a major milestone for the company," says Stan Rose, president and CEO of NimbleGen. "We have primarily been a ser vice provider. We have a unique way of making arrays that are of interest for a wide variety of applications in genome analysis that we believe are going to become mainstream research tools.
"As we've grown from our roots as a reference lab and leveraged the trend in the industry of outsourcing, interest in our technology in the research community has grown and there has been more and more demand from customers who would like to receive our arrays."
While NimbleGen has provided arrays on a limited basis to a handful of its customers, this agreement allows it to launch a full-scale effort to develop microarrays that it can brand and market in emerging research areas. These include chip-on-chip immunoassays, copy number analysis and comparative genomic hybridization (CGH) and DNA methylation. "In the past, we were comfortable providing arrays that had the look and feel of a prototype or a beta product, but when you are dealing with the mainstream research community you need to do things in terms of packaging and documentation and support and that is how we are moving forward."
For Affymetrix, the deal with NimbleGen is further evidence of its growing dominance in the microarray market and the success of a licensing program it broadened in early 2004. "This licensing agreement with NimbleGen follows from a commercial relationship and enables both companies to better serve customers within the growing microarray market," says Alan Sherr, VP and chief counsel for licensing at Affymetrix, in a statement announcing the deal.
While NimbleGen is targeting areas it anticipates will be high growth, Rose says the company also has a technological advantage.
In particular, he points to its long oligo probes as a competitive advantage in terms of data integrity, while touting the coming increases in array density it expects through the implementation of digital light processing (DLP) technology from Texas Instruments.
"We offer just over 400,000 features in a typical array today and are in the transition to 1.2 million features in January," he says. By the end of next year, Rose expects his company's arrays to boast 4 million features, a ten-fold increase in less than a year.
While the company anticipates its array business will eventually outstrip it services division, there are no plans to move away from its original area of business.