Hyseq Creates a Subsidiary to Focus on DNA Chip and Sequencing Technology

Source Press Release
Company AffymetrixNuvelo 
Tags Company Strategy, Subsidiary
Date October 25, 2001

Sunnyvale, CA -- October 25, 2001 -- Hyseq, Inc. (Nasdaq: HYSQ) today announced the creation of two distinct businesses. First, Hyseq will create a new majority-owned subsidiary, known as Callida Genomics, Inc., to focus on the development and commercialization of Hyseq’s sequencing-by-hybridization (SBH) technology and the formation of a collaboration to accelerate the development and commercialization of a high speed DNA sequencing chip. Second, the parent company (formerly Hyseq, Inc.) will now be known as Hyseq Pharmaceuticals, Inc., reflecting the company’s primary mission to develop and commercialize new treatments for human disease based upon its proprietary collection of rare and novel genes.

To develop the high-speed chip, Callida will create a wholly owned subsidiary, known as N-Mer, Inc., which will have access to both Callida’s proprietary sequencing-by-hybridization technology from Hyseq and Affymetrix’ GeneChip® technology. Affymetrix, Inc. (Nasdaq: AFFX) will be the exclusive array and system supplier and is authorized to be the exclusive agent for the distribution of N-Mer products. In return for Affymetrix’ contribution to the collaboration, Affymetrix has a right to purchase a majority interest in the N-Mer subsidiary in under specific undisclosed terms.

As part of a patent litigation settlement announced earlier today, Hyseq will use the proceeds of this settlement agreement to fund the new subsidiaries. Based upon additional license arrangements, Affymetrix will also be a minority owner of Callida. Both companies will make additional investments contingent upon attainment of certain milestones.

"We are pleased that the creation of Hyseq Pharmaceuticals and Callida Genomics allows each to focus on their main business objectives to bring important biopharmaceutical and DNA chip products to commercialization," said Ted W. Love, M.D., president and chief executive officer of Hyseq Pharmaceuticals. "We are excited about the opportunity to provide new products, new markets and added value through Hyseq Pharmaceuticals, Callida and N-Mer," he said.

Callida has been assigned all of Hyseq’s SBH patents and a team of approximately 30 scientists at Hyseq, including founder Dr. Rade Drmanac, who pioneered the company’s DNA chip and SBH technology, will become full-time employees of Callida. Dr. George Rathmann will serve as chairman, interim president and chief executive officer of Callida, in addition to his current role as chairman of Hyseq Pharmaceuticals.

Callida Genomics To Initially Focus on High-Speed DNA Sequencing Chip Callida’s initial efforts will focus on the development of a universal, high-speed DNA sequencing chip to provide a fundamental improvement in the speed, efficiency and accuracy of DNA sequences that are too complex for efficient single-pass sequencing using current gel sequencing technology. For example, a DNA chip that could sequence 10,000 bases of DNA at a time would allow sequencing of the entire HIV genome. It is believed that such a chip may address critical bottlenecks in the fields of functional genomics by enabling researchers to decipher intricate gene networks, or by allowing researchers or clinicians to rapidly identify rare polymorphisms or novel mutations associated with disease.

Hyseq Pharmaceuticals, Inc. Hyseq Pharmaceuticals, Inc. is engaged in the research and development of biopharmaceutical products based upon its proprietary database of full-length human gene sequences. Hyseq’s screening-by hybridization platform provided a significant advantage in discovering novel, rarely expressed genes, and assembly of one of the most important proprietary databases of full-length human gene sequences. Hyseq is expanding and accelerating its research activities to further elucidate the role novel genes in its proprietary database for the development and commercialization of bio-therapeutic products. Hyseq’s database includes genes that encode a number of therapeutically important classes of molecules including chemokines, growth factors, stem cell factors, interferons, integrins, proteases, hormones, receptors and other potential protein therapeutics or drug targets. Information about Hyseq is available at  or by phoning (408) 524-8100.

Callida Genomics, Inc. and N-Mer, Inc. Callida Genomics, Inc., a majority owned subsidiary of Hyseq Pharmaceuticals, is focused on the development and commercialization of advanced DNA sequencing and analysis tools based upon its sequencing-by-hybridization technology. N-Mer, Inc., a wholly owned subsidiary of Callida Genomics, Inc., is a collaborative effort by Hyseq and Affymetrix that plans to develop a universal, high-speed DNA sequencing chip to provide a fundamental improvement in the efficiency and accuracy of DNA sequences for genes that are too complex for efficient single-pass sequencing using current gel sequencing technology. It is believed that such a chip may address critical bottlenecks in the fields of functional genomics by enabling researchers to decipher intricate gene networks, or by allowing researchers or clinicians to rapidly identify rare polymorphisms or novel mutations associated with disease.

Statements included in this press release which are not historical in nature, are intended to be, and are hereby identified as "forward-looking statements" for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Forward looking statements may be identified by words such as "believe," "expect," "anticipate," "should," "may," "estimated" and "potential," among others. Hyseq cautions readers that forward-looking statements, including without limitation, those relating to the Hyseq’s future business prospects are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. For a discussion of factors that may cause results to differ, see Hyseq reports filed with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2000. Hyseq disclaims any intent or obligation to update these forward-looking statements.

Source: Evaluate™
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