National Editor

When a company provides a "business strategy update" these days, the news usually includes a cutback of some kind, and Orchid BioSciences Inc. proved no exception, saying it is phasing out its single nucleotide polymorphism genotyping instruments and the related consumables in its life sciences unit.

"We felt it would make sense for the product family we've introduced to have a home with another instrumentation supplier," said Dale Pfost, president and CEO of Princeton, N.J.-based Orchid.

"Our platform is the best in the industry on many counts," he said, "but what we've looked at is the applications. We've become the applications experts in genoprofiling."

Pfost said it's "fair to say the research tools industry is always a challenge" and, given the sales and marketing infrastructure required, "we're not going to be able to do it justice."

A disposition of the SNP tools business is expected by the end of the year, with marketing partnerships among the possible arrangements being sorted.

"It's a pretty broad range," Pfost said, and includes outright acquisition of the tools business by another firm, or the spinout of that aspect of Orchid.

Top-line revenues for 2002 are still projected at about $65 million, and the company said it remains optimistic about achieving profitability in the fourth quarter of next year.

Orchid will keep offering SNP genotyping services, hoping to leverage its technology to provide profiling through identity genomics, diagnostics and personal health care markets, but is giving way to what many have recognized are hard times in the sales of research tools and reagents.

From here on out, the company will sharpen its focus on the profiling of genetic uniqueness, which has applications that include organ transplants, forensics and counter-terrorism.

GeneShield, along with the company's Cellmark program, already provides forensic and paternity testing services for child welfare agencies and private individuals in four genotyping laboratories on two continents.

"We're the No. 1 player in forensics, paternity and agriculture," Pfost said.

Pfost said Orchid will forge ahead with its pharmacogenetics efforts being developed as part of its GeneScreen platform, with a plan to push for the adoption of personalized medicine.

"There's a very large unmet medical need caused by hospitalizations [due to] adverse drug responses," he said. Next year, the company will launch RxScreen, which will be offered as part of the sign-up with health insurance plans, Pfost told BioWorld Today.

"Part of the enrollment kit will be a swab that you roll on the inside of your cheek," he said. This, along with a questionnaire, will be sent back to Orchid, which will perform tests.

"Then we'll send an alert package to let the patient and the physician know what medications they ought to avoid," Pfost said.

Orchid disclosed its plan for the business-strategy change at the UBS Warburg Global Life Sciences Conference in New York.