HAMBURG, Germany ¿ GeneScan Europe AG, of Frei burg, Germany, a holding of five German biotech companies active in the DNA-based analysis of food, has signed a second agreement with a U.S. company. GeneScan also said it is planning to enter the medical diagnostic market soon.

The recent agreement was signed with Strategic Diagnostics Inc. (SDI, NASDAQ: SDIX), of Newark, DE. SDI, a leading provider of diagnostic kits for agricultural, industrial, and water treatment applications, has developed the first antibody-based detection kit to spot the Round-Up Ready soybeans in raw products. GeneScan Europe now holds an exclusive right to the GMOCheck test in Germany and is allowed to sell the test worldwide.

¿This will stir up the market a lot,¿ said Michael M|ller, head of marketing of Hanse Analytik GmbH, of Bremen, Germany, one of the five GeneScan Europe group members (see BioWorld International, April 14, 1999). ¿We are now able to test batches of raw materials and raw products cheap and quick. This has not been possible before. Costs will be reduced [by] about a third, and the result is available after only four hours.¿ Besides, the test allows for quantification of the GMO portion in raw products. He added that SDI was establishing such antibody tests in close cooperation with breeders, who use these antibodies to test their varieties and breeding lines for the desired genetic traits. ¿Compared to PCR tests, ELISAs are much faster to develop,¿ Mueller said.

SDI realized $2 million in revenues from transgenic crop testing in 1997, mostly from quality control, and expects a potential market of $35 million by the year 2000. Richard Berkmeyer, president and CEO, said the soybean test kits already had been validated as a test for compliance with the GMO food labeling regulations within the EU member countries, allowing GeneScan to offer the fastest and most cost-effective solutions for customers needing to fulfill these requirements.

¿It also allows us to benefit from GeneScan¿s extensive sales force and strong customer contacts within the food-processing industry, and gives us a strong presence in Europe¿s rapidly growing market for GMO food testing,¿ Berkmeyer added. About 22,000 food processors in Europe are obliged to test their products for the presence of modifications introduced by genetic engineering since March 1, 1999.

GMO-analysis is but the first step, M|ller said: ¿It is an interesting market, and we and our methods get known with it. But we will not get rich with this. The big market is medical diagnostics. And as soon as we are able to enter this market, we will profit a lot from our experience.¿ He added that GeneScan Europe was already selling the NutriChip to test for microbial contamination in food, and a ScienceChip, which is custom-designed and has been ordered by blood banks and Swiss pharma companies. Chips for HLA-typing and other medical procedures are in preparation.

¿We are now starting to compete with the big players in the DNA chip market,¿ Ulrich Birsner, director of Gene Scan Europe AG, told BioWorld International. ¿And we have a low cost, high-tech solution to offer.¿ The analyzer costs around DM100,000, and chips will be inexpensive, ¿so that in terms of costs, the system fits well into the current cost situation in this area.¿

GeneScan Europe AG was founded with capital from TFG Venture Capital AG, of Marl, Germany. ¿Hanse Analytik and Gene-Scan GmbH are very profitable companies already,¿ Birsner noted. ¿The money is needed mostly to finance our biochip developments. Now we are planing to go public within the next 6 to 12 months, so that we are able to expand internationally on a big scale.¿ The GeneScan Europe group realized DM8 million in sales last year and plans to reach DM10 million this year. The group employs a work force of around 100.n