Applied Biosystems Inc. said Wednesday that it formed asubsidiary, Lynx Therapeutics Inc., to pioneer its efforts in thedevelopment of antisense therapeutic compounds.

ABI of Foster City, Calif., aims to eventually build Lynx into afully integrated pharmaceutical company, which could takedrug development from basic research through final marketing.Lynx is to develop therapeutics based on its synthetic DNAtechnologies. Antisense compounds work by silencing thegenetic message that sets in motion the synthesis of disease-causing proteins inside cells.

As a leading developer of automated gene and proteinsequencers and analyzers, ABI has been well-positioned tosurvey the emerging field of antisense technology, which reliesto a great extent on the equipment that ABI makes. Thecompany has been involved in producing most of the firstantisense compounds that are just now starting to enter clinicaltesting.

"We made the compounds in quantity and in the properpurity," Brad Cole, ABI's vice president of finance, toldBioWorld on Wednesday. ABI has also been scouting foropportunities in the antisense field. "Over the last five yearswe've been putting together a patent and product portfoliorelated to DNA chemistries," Cole said.

Lynx's formation comes one week after the announcement ofthe first reported systemic use in a human of an antisensecompound -- which was exclusively licensed by and co-developed with ABI.

To head the new company, ABI called on Sam Eletr, an ABIfounder and its former chief executive. For the past two years,Eletr has been a consultant to ABI, working to a large extent onits antisense projects, Cole said. ABI is contributing to Lynx thestaff and assets of its therapeutic group, including a GMP-approved manufacturing facility and a portfolio of patents andrights. No dollar value was placed on these contributions.

Lynx will be able to forge its own collaborations with academicand commercial drug developers, and may someday seekoutside funding -- and possibly be spun off from ABI, Cole said.

ABI's stock (NASDAQ:ABIO) closed Wednesday at $13.25 a share,up 50 cents.

ABI handled the initial production for Isis Pharmaceuticals Inc.of San Diego of an antisense compound, Isis 2105, which inMarch became the first antisense drug to be administered intoa human, as an injection to treat genital warts.

Antisense compounds to which ABI acquired exclusive or co-development rights include potential treatments of chronicmyelogenous leukemia (CML), melanoma and colorectalcancers, and HIV. The company expects to soon publish resultsfrom in vivo anti-cancer efficacy studies in animal models, saidAndre Marion, ABI's president and chief executive.

In the first systemic use of an antisense compound, a 20-year-old patient with acute myelogenous leukemia (AML) wastreated in mid-June at the University of Nebraska MedicalCenter (UNMC) in Omaha. The antisense compound, developedby UNMC researcher Larry Smith, blocks the activity of aspecific gene, called p53, and has been shown in in vitrostudies to kill cancer cells.

The antisense compound has not yet shown any toxic effects inthe AML patient, nor has it triggered a therapeutic response,said Mark Arneson, general manager of UNMC's OligonucleotideTherapeutic Group. However, the patient was given a lowdosage, so researchers expected no immediate response to thedrug, he said.

In animal studies, the compound has produced no toxic effectsat dosage levels 200 times those where it has been shown in invitro studies to have a pharmacological effect, Arneson said. Noin vivo efficacy data is yet available because of the lack of asuitable animal model for AML, he said.

UNMC is considering starting a second patient on a 10-dayintravenous treatment regimen under a physician-directedclinical trial. An investigational new drug (IND) application isbeing prepared for submission to the FDA proposing a Phase Iclinical trial involving about 15 AML patients.

ABI TO TAKE $22 MILLION IN WRITE-OFFS

Applied Biosystems Inc. said Wednesday that it will take $22million in write-offs against results in the just-finished fourthquarter, largely reflecting goodwill and other intangible assetsthat are of little or no continuing value to the company.

ABI of Foster City, Calif., expects to report a 15 percent rise insales for the quarter ended July 3, up from the $40.7 million insales reported for the comparable three-month period a yearago, the company said. "We're especially encouraged by ourgrowth in order backlog and increasing market share in mostproduct lines," said Andre Marion, ABI's president and chiefexecutive officer.

The reductions covered by the fourth-quarter charges willreduce ABI's annual operating expenses in future years by $5million, Marion said. ABI reported $680,000 in fourth-quarterprofits a year ago.

Most of the $22 million in fourth-quarter charges areassociated with ABI's Kratos operations, which it acquired in1986 for $23 million, and Bio-Ion Nordic AB, which itpurchased for $2.5 million in 1989. A small portion of the totalcharges is a reserve set up to cover the expected costs ofshutting down an operation in Sweden that is involved in massspectometry.

-- Ray Potter Senior Editor

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

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