NimbleGen signs license deal with Affymetrix

NimbleGen looking to diversify from its current service model.

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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.
"It's not a matter of tossing the service business aside," Rose says. "Quite frankly, part of what has put us in this position is that we've had great success with the service business. There is still a significant portion of the research market that would prefer to outsource experiments and we have a capa­ble group of people, a great reputation and an efficient operation, so we have no inten­tion of giving that up."

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