san francisco

Incyte Pharmaceuticals, Inc. and SmithKline Beecham (SKB) are to create a joint venture company called diaDexus to discover and commercialize molecular diagnostic products in a deal which brings together some of the newest technology in the area.

diaDexus will be based in Santa Clara, California, and will be owned equally by both parent companies. It will use bioinformatics and genomics initially to develop tests for disease detection, with particular emphasis on infectious diseases and oncology. The company also plans to create pharmacogenomic tests to optimize clinical drug testing and disease treatment according to the genetic differences between people.

Rachel Leheny, biotechnology industry analyst for the investment company Hambrecht & Quist, Inc., calls the arrangement “slick”. She says both companies bring significant technology and financial resources to the venture, and predicts that this should help to make diaDexus one of the three companies likely to dominate genomics-based diagnostics in the future. The other candidates, she predicts, are the California-based company Affymetrix, which is developing sophisticated DNA-chip technology, and the collaboration announced in July between Abbott Laboratories and the French company Genset to develop diagnostics for customizing pharmaceuticals for patient use.

Leheny says these companies were targeting a very lucrative segment of the future pharmaceutical business. Disease detection is their near-term goal, with pharmocogenomics “the holy grail”, she said, adding that the deal underlines the sophistication of Incyte's genomics capabilities. “I think SmithKline saw that if they really needed to be competitive, they needed to get access to the best database,” she said.

Incyte, which is based in Palo Alto, California, will provide diaDexus with non-exclusive access to its extensive human and microbial genomics databases. The new company will also have access to information from SKB's partners in genomics, including the Rockville, Maryland-based company Human Genome Sciences, and to diagnostic data originating from SKB's own therapeutic research. Incyte and SKB said they would contribute a combined total of $25 million to start the new company, which will have around 30 staff.

diaDexus plans initially to license proprietary diagnostic markers to diagnostic-kit manufacturers. The new company also will start business with five tests in late-stage-disease validation, including three for cancer and one for bone disease. Company officials said they hoped to introduce their first “homebrew” service laboratory test within two years, with diagnostic kits approved by the Food and Drug Administration ready within six years.

Dr George Poste, chief science and technology officer of SKB — which has its US headquarters in Philadelphia — will be chairman of the new company. John Burczak, director of research in molecular diagnostics at SKB, will become its research and development director. A chief executive will be hired early next year.