Affymetrix Inc.
Small companies with promising technologies are all over The Times’ High Flyers list, including the top company, Affymetrix, a Santa Clara-based biotechnology firm.
Affymetrix’s GeneChip, the first of what has been dubbed “biochip technology,” has the potential to revolutionize medical treatment, taking diagnostics from centuries-old methods to therapy tailored to the genetic makeup of a specific disease and patient.
GeneChip is currently being used to treat AIDS. The system gives doctors the ability to map a patient’s specific strain of HIV and choose the drug that’s most likely to work.
The company sells a “biochip system” that includes medical equipment and chemicals used to test patient tissues and computers and software used to analyze the genetic makeup.
The system, also being developed for breast cancer, has huge potential because it may make it practical to use a drug that works in, say, only 25% of patients, because it can help identify that 25%. Potential result: better and cheaper health care.
The company, 30% owned by Glaxo Wellcome, has developed hardware with Hewlett-Packard and has research and development deals with Glaxo, Bristol-Myers Squibb, SmithKline Beecham and other drug companies.
Analysts are enthusiastic about the deals and what they call a great management team with a proven record. They cite the firm’s excellent balance sheet, with more than $100 million in cash reserves against a 1996 loss of $12.2 million, or 61 cents a share.
Moreover, the company’s ability to sign more deals and bring in more money means it might not have to go back to the market for more capital.
The company is refining its “biochip” package of hardware and software products. Analysts say it has the potential to become a leading tool for genetic sequencing and research and development of new drugs.
The company isn’t making any money yet. In the first quarter, Affymetrix reported a net loss of $4.9 million or 22 cents a share, on revenue of $2.8 million.
Its June 1996 initial public offering raised $92 million. The share price had doubled to $35.875 but has since retreated to about $24.
