Incyte Genomics Getting Out of Crowded Genomics Tools
Business
By Paul Elias The Associated Press
Published: Oct 31, 2001
SAN FRANCISCO (AP) - Preferring pharmaceuticals instead of genomics, Incyte Genomics Inc. laid off 400 workers and shifted the focus of its business.
The Palo, Alto-based company said Tuesday it's getting out of the genomics tools business and will refashion itself as a drug maker.
Once a maker of microarray chips, which are about the size of a microscope slide and contain specific fragments of specially chosen DNA used by drug companies to understand what effects experimental compounds have on genes, Incyte said the field has gotten too crowded.
"The tools business is much more competitive and the buyer is in the business seat," said chief executive Roy Whitfield said.
Two companies not associated with life sciences - Motorola Inc. and Agilent Technologies Inc. - are now marketing microarray chips.
"I think it's a good strategic move," said Deutsche Banc Alex. Brown analyst Dennis Harp, who nonetheless cut his rating on the company from "strong buy" to "buy."
Harp downgraded the company because it has failed in its promise to hire a new president to guide the restructuring.
Incyte laid off 36 percent of its 1,100 employees in Berkeley, Fremont and St. Louis while closing its Berkeley chip-shipping operation. The company announced the restructuring last week, when it released its financial results for the third quarter.
The company lost $17.8 million on revenue of $57.3 million, compared to a $7.6 million loss on $52 million in revenue for the comparable quarter in 2000.
Incyte is the latest gene-delivery company to jump into the pharmaceutical business. Harp said Wednesday that genomic pioneers such as Human Genome Sciences Inc., Millenium Pharmaceuticals and even Celera Genomics - which played an integral role in the mapping of the human genome - have turned to drug manufacturing.
To that end, Incyte announced it has signed drug-making deals with two large biotechnology companies.
Incyte agreed to license its patents to four disease-fighting antibodies to Genentech Inc. for potential drug development. Incyte has received undisclosed licensing fees and will earn "milestone" payments from Genentech as the South San Francisco biotech giant progresses with drug development.
Incyte, meanwhile, has signed a collaborative agreement with Medarex Inc. of Princeton, N.J., to co-develop a drug. The two companies will share royalties equally if the undisclosed drug ever reaches market.
ap.tbo.com |
