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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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JANUARY 21, 2004
The Healthy Promise of Biochips Tracking the human genome was just the beginning. Now, biochips can be used to study many genetic aspects of a disease -- and possibly a cure Though it accounts for just a tiny percentage of overall chip sales, a thumbnail-size glass plate on which intricate patterns are printed is a tool with the power to transform drug research and improve the health of millions of people. It's called a biochip, and the patterns hold tens of thousands of "probes" -- segments of DNA that represent genes. In a typical experiment, a drug researcher places a sample of diseased tissue that has been tagged with a fluorescent dye onto a gene-laden chip. A scanner then reads the chip, and if the DNA in the sample matches any of the genes on the chip, that part of the chip lights up. Matches that occur over and over provide invaluable clues about the role of that specific gene in cancer, AIDs, and other diseases. With the introduction of the first biochip in the late 1980s by Affymetrix (AFFX ) in Santa Clara, Calif., drug researchers have been able to dramatically speed their pace of investigation. And as researchers' interests have become more varied and nuanced, chipmakers have come up with new iterations of biochips. GENOME ON A CHIP. Today, some chips help scientists see which genes contribute to a particular disease and to what extent. Others help track the tiniest mutations between the same gene sequences -- or strands of DNA -- in people with the same disease. Still other chips aim to illuminate the activity of proteins -- the hormones, enzymes, and antibodies that are the foot soldiers of disease and a body's defenses against it. Over the past decade, the power of these chips has multiplied. Nowadays, a single chip can hold the contents of an entire human genome -- 30,000 to 100,000 genes, depending on who's counting. Just two years ago, it took two chips to hold that amount of data, and a decade ago it took five. Labs at drug companies and universities can't get enough of the latest versions. Though they get cheaper every year, just like their cousins in computers and electronics, dollar-sales figures continue to rise -- as much as 50% in 2003, to perhaps $500 million, says Aaron Geist, an analyst at Robert W. Baird in Milwaukee. Attracted by this trend, more competitors are entering the market -- including General Electric (GE ), which acquired British biochip maker Amersham in 2003. GE, plus No. 2 Agilent Technologies (A ) and more recent entrants, such as Illumina (ILMN ) and Applied Biosystems (ABI ), are stepping up their efforts to grab chunks of Affymetrix' estimated 70% market share by attacking it high and low. FALLING SHARE? Illumina has beat the market leader to the punch with biochips that hold up to six human genomes. At the same time, plenty of small competitors are vying to sell chips that are focused on limited groups of specific genes. Affymetrix, meanwhile, is looking beyond customers that do pure research to those that do diagnostic tests -- a market it expects will be robust. Opening new markets is becoming an imperative for Affymetrix. Though it remains the biggest biochip maker by a wide margin, its sales have been flat or declining over the last three quarters, says Paul Knight, an analyst at Thomas Weisel Partners in New York. "I think Affymetrix' share could fall to 60% as others come into this market over the next 24 months," he says. Much of the new demand for chips, Knight adds, is for those more customized than Affymetrix makes. Once the mapping of the human genome was completed in 2001, researchers quickly turned up a vast number of possible "targets" for potential drugs -- often a protein that counteracts disease-causing genes. Now, the need is to narrow the field by validating which targets deserve further study. This new mission requires chips whose focus is small groups of specific genes or the genetic makeup of obscure organisms. "Now that you have a better idea of what gene you're interested in, that creates demand for more customizable chips," Knight says. "MORE ADAPTABLE." Agilent, No. 2 in the industry, is benefiting from this trend. It estimates that its share of the biochip market rose to 15% in 2003, up from what analysts say was single digits previously. That growth, says Mel Kronick, Agilent's chief scientist for bioresearch solutions, came from sales of "catalog chips" -- which contain the genetic maps of organisms widely used in research, such as human, rat, and mouse -- and from sales of customized chips. Customization may be Agilent's primary edge. It uses an ink-jet manufacturing process for its chips that is "much more adaptable to customization" than the photolithography process that Affymetrix uses, Kronick claims. Agilent has plenty of company. Emile Nuwaysir, vice-president for business development at NimbleGen in Madison, Wis., says his company makes chips to the specification of "hundreds" of customers -- and then does the experiment for them and sends back results. This service is popular with labs that want to explore the characteristics of very specific sets of genes or of organisms whose genome isn't available off-the-shelf.
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