Time has shown that diversification is important for every biotech company, as one product-wonders and single platform technology companies usually struggle to avoid failure or acquisition. But while last week's partnership deal between Lexicon Genetics Inc. and Incyte Genomics Inc. provides an opportunity for each company to diversify and round out its capabilities, they are following polar opposite strategies. LEXG is intent on expanding its downstream product development capabilities, while INCY basically continues to focus on finding new ways to expand and market its databases.

On its face, the first part of the deal positions both companies to enter the therapeutic development game. LEXG (The Woodlands, Texas) will use its knockout mouse and gene targeting technology to validate as therapeutic agents up to 250 genes coding for secreted proteins from INCY (Palo Alto, Calif.). Each company will be able to choose targets to develop as therapeutics and