Research institutes mine microarray gold

Some publicly-funded Australian biotech research institutes are enjoying lucrative returns from selling the microarray fabrication skills of their scientists.

But as their revenues rise, so does the danger that commercial suppliers of the same services may feel threatened and start complaining about the competition.

Some research institutes are discovering their in-house microarray skills give them the opportunity to generate seven-figure annual revenues by offering those skills on the open market.

The argument makes sound economic sense to any research centre alive to the possibility of supplementing its core government grants with other income streams.

One is the Australian Research Council's Queensland-based Special Research Centre for Functional and Applied Genomics. The centre has 40 scientists affiliated with it and part of its function is to supply contract research services to other academic groups and industry.

The centre's microarray facility is supplying the needs of other organisations to such an extent that it claims to be one of the three largest producers of microarrays in the country.

The SRC's deputy director Prof David Hume is uncomfortable about publicly divulging the external sales turnover of his microarray unit.

Although the centre is a non-profit organisation and does not sell its microarrays outside Australia, Hume is wary about the attitudes of dominant commercial suppliers such as Affymetrix.

One way to defuse any possible confrontation with vendors would be to enter into licensing arrangements with them. And Hume says his centre is looking at the possibility of purchasing an arrayer that would include an Affymetrix licence.

The SRC is by no means the only player in the game. In the forefront of universities with microarray facilities who on-sell their services are the University of New South Wales and the University of Western Australia. The Australian Genome Research Facility, the Peter MacCallum Cancer Institute and CSIRO are also in the group.

Their activities so far have not drawn any strong reaction from commercial vendors like Affymetrix for two main reasons.

First, they are seen as offering complementary rather than competitive services. They tend to supply the market for lower density, more flexible custom-tailored spotted slides rather than the high-density (and higher priced) GeneChip products on which Affymetrix concentrates.

Second, the research centres need to purchase a technology platform before they can offer microarray services which makes them customers as well as potential competitors.

Bren Collinson, managing director of Affymetrix distributor Millennium Science, said Affymetrix was not pushing the academic market for licence fees.

"They might set up a core facility and sell slides to other institutions, but that is not what Affymetrix would see as a commercial operation," he said.

As a distributor, Millennium Science sees the institutions primarily as a customer base for the robotic equipment needed to produce slides as well as consumers of training on new tools and techniques.