Affymetrix Links Up with DNA Link - Analyst Blog


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Genetic products company, Affymetrix Inc. ( AFFX ), inked a 'Powered by Affymetrix' ("PbA") Program agreement with Korea-based biotechnology company, DNA Link Inc. Following the terms of the deal, DNA Link acquired a global license to use Affymetrix's GeneChip System 3000Dx v.2 along with other microarray technologies to develop a forensic test for human identification.

The GCS 3000Dx v.2 from Affymetrix is a second-generation solution for DNA and RNA analysis. It has received the U.S. Food and Drug Administration ("FDA") approval as well as the European CE Mark for in vitro diagnostic ("IVD") uses. The system has also been cleared by the Korean FDA.

DNA Link intends to combine Affymetrix's leading GeneChip technology with its cutting-edge forensic test, AccuID Chip, to develop innovative molecular diagnostic tests for personalized healthcare in the field of genomics.  

Earlier, in Aug 2012, Affymetrix had signed a PbA Program agreement with a Singapore-based molecular diagnostics company, PathGEN Dx Pte. Ltd. Apart from PathGEN Dx, the company shares its technology with Roche Diagnostics, a unit of Roche Holdings Ltd. ( RHHBY ), and Pathwork Diagnostics.

Our Take

Affymetrix is a leading provider of microarray-based products and services to the global research community. Apart from Illumina Inc. ( ILMN ), it is one of the two major providers of microarray technologies, primarily serving the field of genetic research.

The latest agreement is in accordance with Affymetrix's strategy to expand its customer base through strategic alliances. Moreover, the company is pursuing a number of strategies (including acquisitions and expansion into new markets) aimed at expanding its top line.

The 'Powered by Affymetrix' Program is an initiative by Affymetrix, which allows other companies to gain access to its GeneChip technology in order to develop new microarray products and solutions. The collaboration with DNA Link marks Affymetrix's first partnership venture in Korea. The agreement further allows Affymetrix's other PbA partners to enter Korea's personalized genomics market.  

However, research and development spending by Affymetrix's customers have fallen considerably due to a weak macroeconomic environment coupled with stringent government actions including budget cuts.

The company currently carries a Zacks Rank #3 (Hold). Biotechnology company, Alkermes plc. ( ALKS ), carrying a Zacks Rank #1 (Strong Buy), is expected to do well in the Medical-Biomed/Gene industry.

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