Hyseq Inc. is applying its large-scale DNA analysistechnology to diagnostics discoveries through anagreement reached with SmithKline Beecham ClinicalLaboratories (SBCL).

SBCL licensed Hyseq's sequencing-by-hybridization(SBH) technology for use in developing and performingdiagnostic tests for genetic diseases. The license is non-exclusive, except for tests developed by Hyseq for SBCL.

Hyseq, of Sunnyvale, Calif., formed a wholly ownedsubsidiary _ Hyseq Diagnostics Inc. _ for diagnosticapplication of its technology. The company already hasdeals in place with unnamed companies forpharmaceutical applications of SBH.

Hyseq will work with SBCL, a Collegeville, Pa., unit ofSmithKline Beecham Diagnostics, to help adapt thetechnology to SBCL facilities. SBCL "will be takinggenes known to be associated with a disease, then usingour information about mutations to indicate whether thereis a presence of or risk for disease based on abnormalmutations," said Lewis Gruber, Hyseq's president andCEO.

The SBH technology uses short, synthesized stretches ofDNA as probes to determine the presence of genesequences in unknown DNA, and an optical scanner toidentify complementary hybrids of probes with targetDNA. Computational approaches then assemble the longsequence from a list of the short overlapping sequencesfound within it.

"This marks the first time our technology will be used inthe diagnostic arena, and also marks the first use of SBHby a major clinical laboratory," Gruber said. "SBHprovides the means to simultaneously assess multiplegenes, thereby making the process of identifying andanalyzing gene function more efficient and economicalover alternative procedures."

Separately, SmithKline Beecham has a gene-discoverycollaboration with Human Genome Sciences Inc., ofRockville, Md., for large-scale gene sequencing.Discoveries made on the pharmaceutical side may or maynot have applications in the new diagnostic collaboration,said John Okkerse, president of SBCL-U.S.

Neither financial terms nor specifics about the structureof the deal between SBCL and privately held Hyseq weredisclosed. But Okkerse said it was a "long-termpartnership."

"We still have to do some development to adapt it to ourenvironment," Okkerse said. "In the research situationand test models we have looked at, the technology is veryencouraging.

"Hyseq's diagnostic technology presents a relativelysimple platform which should help us evaluate the entiresequence of a gene," he said. The collaboration isintended to complement research going on at SBCL'sGenetic Testing Center, which opened earlier this year inVan Nuys, Calif.

Gruber said the agreement with SBCL involves theFormat-1 A process of SBH, a variation of the technologygeared toward working with a smaller number of samples(from one to 1,000) more suited for diagnosticapplications. SBCL will select the tests it wants, and alsodecide what the test will incorporate, from pointmutations through complete sequencing, he said. n

-- Jim Shrine

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