Gene Logic wins fourth government research pact

National Cancer Institute contract could be worth as much as $6.9 million

April 09, 2004|By William Patalon III | William Patalon III,SUN STAFF

Gene Logic Inc. was awarded a federal research contract worth a potential $6.9 million yesterday, its fourth government contract in six months.

The latest contract calls for Gene Logic to provide core research on medicines to treat cancer, acquired immune deficiency syndrome and AIDS-related illnesses, the Gaithersburg company said.

The seven-year contract, with the National Cancer Institute's Division of Cancer Treatment and Diagnosis, could provide Gene Logic with as much as $6.9 million, depending upon the studies and services requested by the agency.

Gene Logic said it has received three other federal contracts of note in the past six months. They are: a multi-year pact with the National Institute of Health and Infectious Diseases, a single-year deal with a health sciences unit of the Department of Defense and an extension of an existing contract with the National Institute of Environmental Health Sciences.

"It's nice niche business for us - the contract studies side," said Gene Logic corporate spokesman Robert G. Burrows. "We have done a lot of business with federal agencies, and we're continuing to look to build that out."

Gene Logic's shares rose 6 cents yesterday to close at $4.79.

The work on all four contracts is to be done by a subsidiary Gene Logic purchased for $52 million in April 2003, Burrows said.

The company was TherImmune Research Corp., a privately held Gaithersburg drug contract research company that had been providing pre-clinical studies and other research for government agencies. Gene Logic, which was marketing proprietary genetic information to private-sector drug researchers, believed the combination would make it possible for the company to cross-market its offerings.

That has been slow to happen, although the payoff will come, Burrows said. Last year revenue from Gene Logic's contract-studies business accounted for more than a quarter of its $69.52 million in overall revenue.

Biotech analyst Eric T. Schmidt, who follows Gene Logic, believes contract services will ultimately be the dominant contributor to the company's revenue.

"This is a new area for them," Schmidt said. "But I predict it will become ... a long-term success."

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