Putting chips down

The race of new players into the microarray field reflects perceptions that the true market potential is yet untapped - indeed, that existing manufacturers have yet to fulfill customer needs - coupled to the belief that barriers to entry are low for technology that already has proven itself in other market segments.

Thus the field has lured big new players like Motorola Inc., which believes it can apply its expertise in semiconductors and electromagnetic science to arrays for pharmaceutical research and diagnostics (see BioCentury, Sept. 11, 2000).

Other large companies - Agilent Technologies Inc., Packard BioScience Co., and Corning Inc. - also hope to change the market calculus by providing cheap, reproducible, high quality arrays, some of which can have customized content. The three are relying on their internal expertise, large scale manufacturing experience and the ability to acquire what they don't have to assemble array manufacturing capabilities and instrumentation.

Each of these players also is betting on where it believes customer demand is headed. Perhaps not surprisingly, each characterizes the array market in terms favorable to its internal strengths, be they density, affordability, reproducibility or flexibility.

In particular, a strategic choice involves the perceived need for more versus less information per chip. Are customers going to want increasingly dense arrays that eventually are able to reproduce the entire human genome on a single chip? Or will they desire small arrays with customized content that enable them to answer specific research questions?

Market leader Affymetrix Inc. (AFFX, Santa Clara, Calif.), which posted its second consecutive quarter of operating profit in the fourth quarter of 2000, is betting heavily on density. Its photolithographic technology is suited to repetitive production of increasingly high density arrays, and the company says it believes the array market is moving towards a demand for whole genome arrays. Indeed, AFFX has licensed out its technology for low and medium density arrays.

Characterizing the market

While it would seem that microarrays would be a product that users might choose to buy rather than make, in fact that isn't necessarily so. Indeed, Patrick Brown, associate professor of biochemistry at Stanford University Medical School, has a website devoted to build-it-yourself arrays. The site includes a parts list, software and step-by-step instructions for molecular biologists to follow.

Although the Brown Lab system is unlikely to meet corporate needs, several biotech companies told BioCentury they make their own arrays because their needs are not met by marketed products.

Michael Gilman, vice president of research at Biogen Inc. (Cambridge, Mass.), said

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