Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : AFFYMETRIX (AFFX) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Haugland who wrote (675)	5/3/1998 2:50:00 AM
From: JF Quinnelly	Respond to of 1728

redherring.com "...Why buy when you can license? Biotechnology has taken some steps toward consolidating, mostly through cross-licensing arrangements. For example, Affymetrix, one of The Herring's top 50 public companies of 1997, and its Silicon Valley neighbor Molecular Dynamics had independently developed two different but complementary array technologies (the analysis of gene expression using thousands of DNA samples contained on a chip). Last December Affymetrix announced it had signed a nonexclusive licensing agreement granting Molecular Dynamics the rights to certain Affymetrix technologies in order to commercialize them. In exchange, Affymetrix gets royalties. Licensing agreements appeal to biotech companies because they allow the companies to retain their technology platforms while generating a revenue stream that can sustain more research. SRI International consultant Felicia Gentile likens such agreements to what has happened in the semiconductor industry. "Biotech is increasingly moving toward a share-and-share-alike mind-set where people just cross-license at a reasonable fee," she says. Licensing agreements also are the preferred way that major pharmaceutical companies work with smaller biotech companies. "If a big company likes the products in a startup's pipeline," Mr. Alsenas says, "they'll simply license them instead of absorbing the whole entity." The typical royalty rate is 10 percent, he says...