Incyte Pharmaceuticals Inc. is teaming up with Affymetrix Inc. todevelop data bases comparing gene expression patterns in healthyand diseased cells for use by pharmaceutical and biotechnologycompanies in drug discovery.

The alliance represents an expansion of a feasibility study that beganin April. The two companies will be responsible for their owndevelopment costs in the joint venture and will share equally inprofits and ownership of intellectual property emerging from thecollaboration.

In the project, Affymetrix, of Santa Clara, Calif., will apply itsGeneChip technology for analyzing gene expression in diseasedtissues based on Incyte's collection of human gene sequences in itscore data base, called LifeSeq (Library of Information for ExpressedSequences).

Incyte was one of the first genomics companies to establish itself as asupplier of genetic data on a non-exclusive basis to pharmaceuticalcompanies for their drug discovery efforts. The LifeSeq data basecontains portions of 80,000 to 100,000 human genes. The number ofgenes is a subject of debate, but Incyte researchers have suggestedthere may be as many 150,000 in the human genome.

Using genes selected from Incyte's data base, Affymetrix will makewhat will be called LifeChips with arrays of the known DNAsequences. Each chip, about 1.2 centimeters square, will containexpressed sequences, which are messenger RNA, representing asmany as 1,000 genes.

To analyze diseased tissues, the nucleotide sequences from expressedgenes in those cells are isolated and washed over the chip where theybind to their known complementary sequences, generating afluorescent signal. The greater the quantity of a particular expressedsequence, for example, the brighter the signal.

Expression patterns of the 1,000 genes represented on the chip areilluminated in a single experiment.

Knowing the changes in gene expression between healthy anddiseases tissues, said Kenneth Nussbacher, Affymetrix's chieffinancial officer, helps identify the molecular pathways and points ofintervention for disrupting the disease process.

Data from the gene expression analysis will be collected in disease-specific data bases, which will be compatible with Incyte's LifeSeqdata base. The information will be marketed on a non-exclusive basisto subscribers.

Incyte and Affymetrix also will develop LifeChips for use bypharmaceutical companies that have tissue samples they want toanalyze or to assess the molecular activity of a particular drug inanimal or human cells.

Initially the Incyte-Affymetrix alliance will focus on gene expressionin prostate and breast cancers and inflammation along with analysisof the molecular pathways of G-protein coupled receptors, which areinvolved in most cell functions.

Since 1994, Incyte has signed up 10 pharmaceutical companies for itsvarious data bases of genetic information, which include LifeSeq aswell as gene mapping, full-length clone and microbial gene sequencedata bases.

The alliance with Affymetrix is among a series of recent moves madeby Incyte to enhance the value of its genetic data by addingtechnologies for understanding the functions of genes.

Affymetrix, which is more than 30 percent owned by London-basedGlaxo Wellcome plc, went public in June 1996 with its GeneChiptechnology, raising $90 million through the sale of 6 million shares at$15 per share. The company is developing its GeneChips for use indrug discovery and as diagnostics.

Affymetrix's stock (NASDAQ:AFFX) closed Tuesday up $0.625 to$18.625. Incyte (NASDAQ:INCY) ended the day at $42, an increaseof $0.75. n

-- Charles Craig

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