Anyone go to the shareholders meeting?? I did, heres my take.... genetic mapping and disease management chips will increasingly be the future of AFFX:
Refreshments were excellent but modest. Steady progress was reported, and I resolved to double my
AFFX stake.
AFFX is backordered on chips, 3-4 months, not because they have problems but because the demand is
great. Production is up 10 fold from this time last year and should increase 10 fold again by this time next
year. The new plant in West Sacramento is coming on line on schedule. Production and stability of chips
not currently an issue.
In terms of revenues, they are increasing at a good rate -- it is looking like $45mil this year with a loss of
about $20 mil. Next year revenues about $80mil and the loss will be about $10mil. Probably we we will
see profitability in the year 2000 or 2001. But that's not the most important news... for that you have to
look in at recent publications in Science (Lander).
The AFFX collaboration at MIT's Whitehead Institute (E. Lander et al) has produced about 4000 single
nucleotide polymorphisms (SNPs) which can now be used in gene finding. 2000 of these have been put
on a chip, now in beta, to be released to collaborators next month. This chip, called Poly2000-something,
will almost certainly be put to use by most big pharma and many academic efforts to locate important
genes associated with specific diseases.
AFFX has put themselves in an enviable position, and their SNP chip should now become central to many
of the best efforts in gene mapping and functional genomics. Gene-probing 100 families the old fashioned
way (gels, blottinges, etc) used to take 6 months or more, and cost God knows how much, and have
many inaccuracies because of the repetitive hand labor needed -- now this work can now be done in a few
weeks with little manual labor, aside from preparing DNA to put on the chip. Should speed up gene
finding dramatically.
Here, revenues are not the important issue (although there will be revenues in the short term), but finding
the genes, and subsequently putting the important disease susceptibility alleles on an AFFX chip is
important, and increasingly feasible. I dont really see how anyone else (INCY, HGSI, HYSQ) can do this
efficiently, or legally.
On this last issue, a patent (#5,744,305) has just been issued to AFFX covering the most fundamental
uses of DNA arrays with more than 400 features /cm2. I have the impression that AFFX now has the
strongest IP position by far in the DNA chip field, and that they have little to fear from their competitors,
so long as they move as fast as they have been movimg.
As a geneticist, I found the progress on the SNP chip very exciting. A very positive meeting. |
