Affymetrix, Inc. (AFFX)

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Affymetrix Inc. (AFFX)

2012 Lazard Life Sciences Conference Transcript

November 14, 2012 8:00 AM ET


Frank Witney - Chief Executive Officer


Steve Unger - Lazard


Steve Unger - Lazard

Good morning. Thanks. Thanks for coming this morning. This is our 9th Annual Healthcare Conference. And this is day two obviously. My name is Steve Unger. And I’m Life Science Tools and Diagnostic analyst.

With us today, we have Frank Witney from Affymetrix. He is the CEO. We also have Doug Farrell, Vice President of Investor Relations. So this is the first presentation of the day in Life Science Tools. The Affymetrix, as you know, has been around for quite some time and recently completed transform of that acquisition of ParAllele BioScience. And Frank is going to have a -- give a detail presentation and then we will open for questions. Thanks.

Frank Witney

Okay. Thanks Steve. Hopefully, everyone can find a seat. So good morning and thanks for taking the time to join us today. I’d like to thank Steve Unger and the team at the Lazard for the opportunity to be here today. We appreciate the opportunity to give you a progress report. At Affymetrix, we have a lot of -- that we think are positive things going on as we continue on our journey to retain -- to recur -- to recover sustained growth and profitability. And I’ll walk you through the elements of what we’re doing and then we can obviously go deeper one-on-one in breakout sessions.

So on the slide is, presentation may contain forward-looking statements and I encourage you to review our SEC filings to get the specific details on the risk factors. The agenda for this morning is shown on the slide.

We’ll talk about the company fundamentals and the essence for the new vision for the company as was pointed out, we have a long-history of outstanding contributions to basic research. And we’re evolving our strategy to evolve with our customers that are doing more and more work and understanding fundamental disease mechanisms and using that information to create molecular diagnostics.

So in effect, what we’re doing here is we’re taking advantage of the effort that customers are using to create to use informations from the laboratory and translate that into medical practice. These are call translational research and clinical diagnostics.

So we’ll cover the fundamentals and that vision. We’ll talk about in details some of the strategies that support our vision, in particular, the growth drivers which are merging quite clearly and then at the end, we’ll talk about the company priorities.

As I mentioned that our customers are moving very rapidly into efforts to understand truly with the tools that are available to understand disease mechanisms. And through those disease mechanisms, molecular diagnostics will emerge, our approaches to therapies will emerge.

And again it’s this bench side to best side effort that on the customers that we are trying to tap into. And there are really as you’ll see during our presentation that a really significant opportunities that are available to us, little bit different from the customers that the company served in its early period of ‘98 to 2005, which was very fundamental research.

This research is much more applied and we think customer’s potential. Just a little bit of background, where this -- the work we doing here is extending a lot of history of innovation of the company. We’re branding. This really was the iconic branding.

You can’t go into a biology lab, basic research translation of the clinical without people noting the name. This is a leveragable asset for the company. We have -- our technologies are well established and not debate that they are functional and state of the art is over 26,000 scientific publications based on Affymetrix Technology, primarily the GeneChip technology which were the most known for over 26,000 publications and in fact, much of which known about developmental biology was learnt that Affymetrix will raise.

ABI with sequence in the hemo geno. Those sequences will then apply to GeneChips and then people would measure expression, liver or kidney or tumor cells and look for differences in expression patterns and those patterns were revealing as expression was different in different tissues and that lead to understanding of disease mechanisms.

So the contributions to the company are not into payment. We built up over the time early people like Siegel and others. They will adopt a very powerful global commercialization. I’ll say a few more words about that in a few minutes.

We’re a consumer based company. 90% of our sales are either micro raised or reagents. About 60% of our sales are GeneChips which we are the most know for. But through the acquisition of eBioScience, USB and Panomics, we now have 40% of our revenues are now off ship, have nothing to do with ships.

So we’re trying to balance our portfolio more and we’ll make additional comments on that point. Our product measured gene function that is the expression of DNA into RNA. We look into genetic variance that may have impact or cause or predict disease and we do a lot of work on the regulation side. However, these networks of 30,000 genes in the cell control and what goes wrong, what’s this regulated in disease.

And the most important point on the slide is the last one. We are shifting our portfolio much more to translational and diagnostic applications from our fundamental efforts in discovery and we’ll talk about how we’re doing that. The two most -- the two clearest examples of that are the work we’re doing in our Cytogenetics program, which is going extremely well and we’ll talk about that as well as the acquisition of eBio which closed in late June, which gives us some late broad set of assays or sub-based assays approaching detection which are extremely important in translational research in ovarian cancer and technology.

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