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Author: tomheadrick Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1856  
Subject: I read the "Heavy Equipt." Report Date: 7/4/2000 10:10 AM
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Hi Guys,

I read your report and was pleased with depth of information and the alignment of the playing field of competitors in this heavy equipt. area. One thing I felt it lacked was mention of Aclara Biosciences.

Your report is by and large about lab-on-chip companies and sequence and high-speed throughput companies. The "edge" is given to AFFX for lab-on-chip co.'s based on market share at this point for a lot of very good reasons, i.e., first mover, cash and ubiquity. Very good reasons indeed.

Your reasons for PEB's continued success are much the same, again, not bad reasons at all. I do wonder though about PEB's ability to erode AFFX market share by enveloping and distributing Aclara chips as part of PEB's product portfolio. If what you say about PEB's business model and ability to leverage its' position in the market and sell complimentary products to customers throughout the research cycle then does it not stand to reason that PEB may be looking to do the same thing very soon and ineffect marginalize the price of chips or create an industry standard by extending its' product portfolio?

Let me emphasize that I am not trying to pick apart your report (I'm not trained in the field to.) I benefited from your report and would recommend it to anyone. What I am saying is that a good part of the reasoning behind PEB maintaining its' market position is they offer a suite of complimentary products that offer end-to-end solutions and that co-operate with each other. I think you should have included Aclara in the report. Look at these paragraph's from the prospectus of Aclara. It says enough to me that they should be considered in the report. Aclara lost $26 mill last year, they have no sales force, PEB is marketing the product. They are involved in a patent suit with Caliper as well. Nonetheless the PEB Kureitsu is a strong position to market your wares from. PEB as a $50mill equity stake in Aclara as well. I think you should have mentioned Aclara in the report. I have no investment in PEB or Aclara or a labchip company, I have been looking into investing in one though. Read the paragraphs below about Aclara and tell me what you think. Thanks for the report.



We are a developer of microfluidics, or lab-on-a-chip, technology with access to the wide range of technology and intellectual property required to broadly address the markets for genomics, or RNA and DNA analysis, and
pharmaceutical drug screening. We use microfluidics, the movement of small volumes of fluids through microscopic channels to perform various laboratory
measurements on a chip the size of a credit card. We believe we have obtained broad access to the genomics market by combining our technology with the intellectual property and market position of our strategic collaborators, in particular, PE Biosystems.

We are developing multiple products to address both the genomics and pharmaceutical drug screening markets based on our proprietary microfluidics
technology that allow researchers to rapidly perform large numbers of chemical and biological measurements in a miniaturized, automated format. In
collaboration with our strategic partners, we are developing analytical instruments that will utilize our LabCard chip products. We believe that these
LabCard systems will provide improved efficiency and enhanced accuracy for a wide range of laboratory analyses, at a lower cost per measurement than current
analytical systems. We intend to commercially introduce our initial product, the Oasis LabCard chip, in late 2000.

We have formed strategic partnerships to commercialize our products with PE Biosystems and Packard BioScience, leading providers of analytical systems for
genomics and pharmaceutical drug screening. We are combining our proprietary microfluidics technology with their broad platform of technologies, including
reagents, analysis methods, instrumentation and software. We also plan to use the marketing, sales and distribution strengths of our current and future
partners to successfully commercialize our products.

OUR TECHNOLOGY AND PRODUCTS

Our microfluidic chip technology enables us to move various fluids and materials, using electric fields, through networks of interconnected channels,
each the width of a human hair. We design these networks in a grid or array format, enabling researchers to perform multiple measurements in parallel on our LabCard chips. Our microfluidic approach enables the rapid and accurate
measurement, dispensing and mixing of reagent volumes many times smaller than what researchers commonly use today. In this manner, we can precisely manipulate
a variety of fluids, including those that contain whole cells, cell fragments or magnetizable particles, using computerized controls with no moving parts or
valves.

We are currently developing multiple products for the genomics and pharmaceutical drug screening markets. We believe that our products will offer researchers several key benefits:

- Greater Flexibility in Chip Design and Use. We produce most of our chips using advanced plastic materials and proprietary manufacturing processes. We believe that our single-use plastic chips offer substantial advantages over glass chips, including the avoidance of carryover contamination from one measurement to the next, and lower manufacturing costs.




- Higher Throughput and Avoidance of Cross Contamination. Throughput is the number of samples that can be processed in a given amount of time. We have designed chips that contain arrays of microfluidic networks, where each network enables analysis of a different sample. This approach increases throughput and avoids cross contamination of different reactions on the same chip.

- Greater Information Content. Our LabCard chips and proprietary reagents allow researchers to obtain more information from each measurement than is currently possible with standard methods.

- Faster Analysis. Our LabCard chips allow researchers to perform most measurements faster than with conventional instrument systems. For example, we can determine the sequence of a DNA strand in less than 20 minutes on our LabCard chips. A similar experiment often requires over two hours on currently available systems.

- Increased Efficiency and Higher Data Quality. Our LabCard chips decrease the amount of manual labor required and reduce the potential for variability and error.

- Reduced Reagent Cost. Our chips perform measurements on very small volumes of material, enabling significant reductions in the amounts of sample and reagents required for a test.

OUR STRATEGY

Our objective is to be the leading provider of microfluidic chips to large, fast-growing segments of the genomics and pharmaceutical drug screening markets
where the information sought is of high value to customers. Key elements of our strategy include:

- Partnering With Industry Leaders for Instrument Development, Manufacturing and Commercialization. We intend to use the instrumentation, software, chemistry expertise and distribution strengths of our partners, such as PE Biosystems, to accelerate the development and commercialization of our products.

- Leveraging Our Intellectual Property With That of Our Partners. Our broad patent portfolio includes over 80 patents and patent applications. We also benefit from the intellectual property portfolio of our strategic partners, enabling us to broadly address the genomics and pharmaceutical drug screening markets.

- Generating Recurring, High Margin Revenue. We expect that most LabCard systems sold will generate recurring revenue from sales of single-use disposable LabCard chips. We are developing proprietary manufacturing processes for the cost-effective production of these plastic LabCard chips.

- Enhancing the Value of LabCard Systems With Proprietary Reagents. We intend to integrate proprietary reagents developed by us and our strategic partners to significantly enhance the flexibility and utility of our LabCard systems.
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