Boom Times for Genomics Startups

On Feb. 28, Japanese pharmaceutical maker Daiichi Sankyo agreed to pay $935 million for Plexxikon, a Berkeley (Calif.) biotech startup that has a new treatment for melanoma. Plexxikon's drug stops cancer cells from producing an enzyme that tells the nucleus to "divide, divide, divide," says Plexxikon Chief Executive Officer K. Peter Hirth. By inhibiting the enzyme, the drug can halt the division and keep the cancer from growing.

Plexxikon was able to develop the drug because researchers using a gene sequencing machine had mapped the genomes of melanoma cells and found a key mutation. The machine was made by Applied Biosystems, one of a slew of genomics pioneers that are reshaping the pharmaceutical industry. Drugmakers use sequencers from genomics companies to peek inside diseased cells to find aberrant genes that trigger illness or cause it to flourish. "We would not have this drug now without the sequencing efforts," Hirth says.