By Charles Craig
Incyte Pharmaceuticals Inc., which sells genetic information to pharmaceutical companies for their drug discovery efforts, signed up Bristol-Myers Squibb as the 14th major subscriber to its core data bases containing DNA sequences for human genes.
Financial terms were not disclosed. In addition to a subscription fee, Incyte, of Palo Alto, Calif., will receive milestone payments and royalties on any products developed with the data base information.
Bristol-Myers, of New York, will have access to Incyte's LifeSeq (Library of Information for Expressed Sequences) data base of gene sequences representing more than 100,000 of the projected 150,000 genes in the human genome. The raw sequences along with technology for understanding their functions will assist Bristol-Myers in identifying potential genetic disease targets for drugs.
Bristol-Myers joins 12 other pharmaceutical firms as clients of Incyte's genomic information. Monsanto Co., of St. Louis, also is working with Incyte to generate plant gene sequence data bases for agricultural applications.
Stock Climbs As Client Base Expands
Incyte officials have targeted the top 50 drug makers as clients for its data bases of genomic information. In January 1996 after signing up the sixth customer, company officials said they had passed the $100 million mark in subscription fees.
Incyte's stock (NASDAQ:INCY) jumped $3.25 Monday to $56.25. Its shares have climbed steadily from the $7.50 initial public offering price in late 1993.
In 1996, the company's revenues totaled $41.8 million compared with $12.2 million in 1995. Incyte's net loss last year was cut to $6.7 million from $9.9 million the year before.
Randy Scott, Incyte's president and chief scientific officer, said his company's success is based on the pharmaceutical industry's trend toward outsourcing of its genomic research.
The science is moving so quickly, he said, drug makers cannot keep pace, in-house, with the best technology.
"We've modeled or business strategy off the contract research organization [CRO] industry," Scott said, noting the pharmaceutical companies now outsource 15 percent of their clinical trial work. "We are the first GRO * genomics research organization."
To keep pace, itself, with advances in genomics for its customers, Incyte has licensed access to numerous technologies to move beyond its initial data bases of raw DNA sequence information generated through the random sequencing of expressed genes with machines developed by Norwalk, Conn-based Perkin-Elmer's Applied Biosystems division.
Those Applied Biosystems' sequencers remain the standard tool for sequencing genes, Scott said, but Incyte also has licensed in other sequencing methods such as those devised by GeneTrace Inc., of Menlo Park, Calif.; PerSeptive Biosystems Inc., of Framingham, Mass.; and Molecular Dynamics Inc., of Sunnyvale, Calif.
The additional sequencing methods help in delineating the DNA structure of the human genome while additional technologies acquired or licensed help decipher gene expression patterns for comparison of healthy and diseased tissues and assist in characterizing functions of genes and their proteins.
For analyzing gene expression, Incyte acquired Combion Inc., of Pasadena, Calif., and negotiated a joint venture with Affymetrix Inc., of Santa Clara, Calif. A collaboration to decipher function involves Scriptgen Pharmaceuticals Inc., of Medford, Mass., which has developed technology for characterizing selected bacterial and fungal genes.
In addition to providing more genomic information to support pharmaceutical companies' drug discovery research, Scott said Incyte is trying to boost the commercial applications of its genomics data bases though advances in computer software technology from Oceania Inc., of Palo Alto, and Molecular Simulations Inc., of San Diego.
A recent agreement with OncorMed, of Gaithersburg, Md., also will give Incyte access to patients' cancerous tissue samples, whose gene expression patterns will be integrated into Incyte's data bases for comparison with healthy tissues.
OncorMed, in return, gets access to Incyte's genomic data bases for use in identifying cancer genes and developing diagnostics.
Incyte agreed to make a $3 million equity investment in OncorMed and would receive additional stock plus a warrant for more shares. The deal could give Incyte 20 percent ownership of OncorMed.
In addition to Bristol-Myers, Incyte's other major data base subscribers are Abbott Laboratories, of Abbott Park, Ill.; BASF AG, of Ludwigshafen, Germany; Genentech Inc., of South San Francisco; Hoechst Marion Roussel Inc., of Frankfurt, Germany; Johnson & Johnson, of New Brunswick, N.J.; Eli Lilly and Co., of Indianapolis; Pfizer Inc., of New York; Pharmacia & Upjohn Inc., of Kalamazoo, Mich.; Roche Holding Ltd., of Basel, Switzerland; Schering AG, of Berlin; Zeneca Ltd., of London; and Novo Nordisk A/S, of Bagsvared, Denmark. *