Incyte Pharmaceuticals Inc. acquired Genome Systems Inc. for stockon Tuesday, and the two companies entered into a collaboration withVysis Inc. to develop a genomic map intended to speed the discoveryof disease-related genes.

Incyte will provide its DNA clones of expressed gene sequences,Genome Systems will map the sequences against its bacterialartificial chromosome (BAC) library, and Vysis' Fluorescence In SituHybridization (FISH) technology will be used to locate and map thegenes to their specific chromosome locations. The data will be addedto Incyte's LifeSeq Atlas data base and offered by the company tosubscribers.

Genome Systems, a privately held St. Louis company founded in1992, was started with the idea of making Human Genome Projectinformation accessible to the scientific community, President DavidSmoller said. The company has large DNA insert libraries and clones_ from 85,000 to 300,000 base pairs _ and has assisted in thediscovery of genes such as the BRCA1 breast cancer gene, theHNPCC colon cancer gene and the ob obesity gene.

Incyte, of Palo Alto, Calif., paid 200,000 shares for GenomeSystems, or nearly 2 percent of Incyte's 10.1 million outstandingshares. Based on the $38.50 closing price of Incyte(NASDAQ:INCY) on Monday, the deal was valued at $7.7 million.

"Gene isolation and discovery is a long process," Smoller said. "Theidea is to move from a handful of genes each year in a long, entailedprocess to a few clicks on a computer. This should move positionalcloning to another level."

Vysis, of Downers Grove, Ill., obtained an equity position of lessthan 10 percent in Genome Systems in 1994 when it prepaid forservices and bought stock. That position is being exchanged forIncyte stock, said Larry Fox, vice president at Vysis.

As part of the collaboration Vysis is subscribing to Incyte's LifSeqAtlas data base, and has an option to get a non-exclusive license fordiagnostic applications of discoveries made using the data base.Incyte has an option to acquire a non-exclusive license to Vysis'FISH and comparative genomic hybridization (CGH) technologies.Specific financial terms were not disclosed.

"We're going to generate a comprehensive map of expressed genes,"Fox said. "That will probably allow us to greatly short-circuit thepositional cloning activities, saving 12, 15, 18 months. It will give usa very big competitive advantage."

Incyte spokeswoman Dayna Wheeler agreed that having acomprehensive map of the human genome will be a valuableresource. The effort, she said, will work like this: Incyte will provideGenome Systems with its complimentary DNA sequences; GenomeSystems will map the cDNAs to the BAC library so they will be ableto find what particular BAC clone a cDNA resides in; Vysis then willmap the BAC clones, which contain the cDNA, to the chromosomes.Therefore having the BAC mapped to the chromosome results incDNA mapped to the chromosome.

"It doesn't provide a precise location," Wheeler said, "but you get avery good idea. It narrows the search significantly."

Fox said Vysis "is getting a lot from this. The general feeling amongall three partners is that each one is getting a substantial win. Thiscollaboration allows us to do things we wouldn't be able to doindividually, and no one else is able to do."

Vysis' core technologies include the direct-label FISH probes, whichincorporate a method of fluorescence detection, and CGH , whichidentifies genetically altered regions in disease-related tissue. Thecompany has more than 170 products on the clinical research market,Fox said, and is developing reagents and imaging systems for theanalysis of genetic disease. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.

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