Affymetrix Discloses Defective Gene Chips

Affymetrix Inc., the largest maker of gene chips used in drug research, said it found flaws in one line of products and offered replacements. The Santa Clara, Calif.-based company found errors in data taken from mouse genes used to design one type of the company’s gene chips, glass wafers with DNA fragments affixed to their surfaces. Replacing the defective chips may cost up to $4 million, the company said in a filing with the Securities and Exchange Commission. Affymetrix last month said it would earn its first annual profit in 2001, and the defects probably won’t keep the company from meeting that goal, analysts said. The errors don’t involve gene chips used to analyze human tissues, which make up about 80% of the company’s sales, said Michael King, a Robertson Stephens analyst. The company’s shares fell $5.13 to close at $50.88 on Nasdaq.