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Stratagene, Bayer to Work on Genetic Tests for Disease

Posted on: Wednesday, 8 March 2006, 09:01 CST

By Terri Somers, The San Diego Union-Tribune

Mar. 8--Stratagene, a San Diego company that makes tools for biotechnology and drug discovery companies, said yesterday that it would collaborate with Bayer Healthcare's Diagnostics Division on the development of diagnostic genetic tests for disease.

Financial terms of the deal were not disclosed. But Stratagene chief financial officer Steve Martin said the big payoff is still a few years away, when the small San Diego company's technology contributes to diagnostic tools that have the potential to be sold worldwide.

As part of the deal, Bayer is developing a sort of diagnostic toolbox that will contain two pieces of technology from Stratagene.

One is Stratagene's Quantitative PCR technology, which takes a small biological sample of a person's DNA and makes numerous copies on which a number of genetic tests can be run. Also known as Stratagene's MX3005P technology, it helps identify the state of a disease in a particular individual.

Bayer also will be using Stratagene's MXPRO software system to analyze the test results.

Both technologies will be a part of the diagnostic platform being developed by Bayer, said David Weber, the company's vice president of marketing.

Stratagene made the announcement during its quarterly earnings conference call yesterday. Net income for the fourth quarter of 2005 was $2 million, or 9 cents a share, compared with $1.7 million, or 8 cents a share, a year earlier.

As of Dec. 31, the company had about $35.2 million in cash and cash equivalents. But in late January, Stratagene was required to transfer $21 million of its cash as an appeal bond, to be held while the company continues fighting a patent-infringement case with Third Wave Technologies.

In December, a federal judge ordered Stratagene to pay $15.9 million for infringing on the patents of a Wisconsin company, tripling the damage amount that a federal jury in Wisconsin assessed in September.

Third Wave, based in Madison, Wis., makes molecular diagnostics that detect genetic variations. The chemistry at the core of the dispute involves the use of enzymes that cut specific segments of genetic material.

Shares of Stratagene were down 34 cents in after-hours trading to $9.50.

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Copyright (c) 2006, The San Diego Union-Tribune

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STGN, BAY,

Source: The San Diego Union-Tribune

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