DNAprint Genomics (DNAG)

[mingwan0]

Frog, although you addressed your post to W2P allow me to provide some input in the interim. I think that a key document for people to be familiar with in this context is the Consulting Agreement with Mark Shriver that was an attachment to the 10QSB filed on August 14, 2002:

http://www.sec.gov/Archives/edgar/data/1127354/000107087602000071/shriverconsultagmt.htm

A number of things are apparent from this document. Here are a few pertinent quotes:

This Consulting Contract Agreement (this "Agreement") is made and entered into as of June 12, 2002

DNAPRINT is the patent owner of certain SNP markers and methods, and desires to collaborate with CONSULTANT to develop a kit product that could be used to infer Ancestry Admixture Ratios in individual human beings.

CONSULTANT is the inventor of certain compositions and methods useful for determining Ancestry Admixture Ratios in individual human beings. CONSULTANT is also the owner of certain DNA samples collected from individuals of various
ancestries, and of certain rights therein. CONSULTANT wishes to commercialize his compositions and methods.

To create a panel of Ancestry Informative Markers (AIMs) that can be accurately, specifically and sensitively used to infer the relative ancestral admixture ratios in individuals, with respect to a list of target ancestral groups. Definitions of adequate accuracy, specifically, sensitivity, and target groups will be determined jointly by DNAPRINT and CONSULTANT.

CONSULTANT will provide DNAPRINT with DNA samples. DNAPRINT will score genotypes for a panel of Ancestry Informative Markers (AIMs) agreed to by both parties.

Data will be made for all DNAPRINT and CONSULTANT AIMs together on a single panel of individuals from several target populations...

DNAPRINT and CONSULTANT will define a minimum and optimum set of AIMs necessary for achieving product goals.

DNAPRINT will modify CONSULTANTS existing computer software programs with the intent of commercializing them to achieve the goals of the project.

5.1 CONSULTANT agrees and understands that any and all data, software improvements, methods, compositions and commercial rights are the property of DNAPRINT, and that CONSULTANT acquires no rights therein and that it can use DNAPRINT data, including any Documentation, only for legitimate scientific research as previously approved by DNAPRINT, and for no other purpose whatsoever.

5.2 Privacy. Genotyping data is the property of DNAPRINT, and CONSULTANT may not sell, loan, disclose or present DNAPRINT data in any manner whatsoever, unless requested by or agreed to by DNAPRINT.

End of Consulting Agreement quotes

From the July 10, 2002 press release ("DNAPrint Inks Research and Product Development Alliance With Penn State University"):

http://www.dnaprint.com/pr_7_10.htm

Researchers from both institutions will team to complete admixture mapping and candidate genome screens to identify the complex genetic determinants of variable human skin pigmentation, tanning/burn response and melanoma risk. A primary goal of the work will be to confirm and extend encouraging results each has previously obtained from preliminary genome screens. The research will be part of a larger effort at DNAPrint to develop a panel of genomics- based tests for the inference of physical traits from DNA, but it could ultimately lead to the development of new, specific drugs for various pigmentation-related diseases and UV-response traits.

The impetus for the alliance was DNAPrint's recent success in developing complex genetics classifiers for the inference of human iris and hair color. "DNAPrint's work in the pigmentation field is innovative, and their results to date are compelling," said Mark Shriver, Assistant Professor of Anthropology and Genetics at PSU. "We have been conducting skin pigmentation research for some time at PSU, but we suggested an alliance because we felt a team effort would be the most efficient means by which to finally solve this fascinating puzzle."

Under the terms of the agreement, DNAPrint gains access to DNA and data from over 1,000 reflectometry-qualified specimens of multiple ancestral backgrounds. In addition, DNAPrint obtains exclusive and unlimited rights to exploit previous pigmentation results and analytical methods developed in Dr. Shriver's laboratory. Both groups will fund the research and DNAPrint will pay PSU a minority share of revenues derived from products that result from the collaboration.

End of PR quote

Now I know that willful misinterpretation is possible, however it seems to me that there are some clear implications from the text that I have highlighted from the two sources above.

Whose markers are we talking about when we talk about AIMs? Clearly work had been undertaken by BOTH parties prior to the agreement. DNAP had successfully developed complex classifiers BEFORE the agreement with PSU. Most telling is the statement that DNAP is the PATENT OWNER of certain SNP markers. I personally think that DNAP and PSU pooled their respective AIMs. How about this from the August 20, 2002 press release ("DNAPrint Files Patent to Protect 2,425 SNPs Linked to Drug Response"):

http://www.dnaprint.com/pr_8_20.htm

"DNAPrint has previously compiled a candidate gene database of several thousand validated drug metabolism and drug target gene SNPs -- collectively known as the "PHENOME" SNP database. However, the new SNPs claimed in the present patent application were identified from a different, more systematic screen of the entire human genome. The sequence of each is useful for explaining variation in drug response to differing extents, depending on the drug, and the Company's data suggests that most are likely linked to genes in the human genome previously not known to be of pharmacological relevance. As such, DNAPrint believes it is the first to claim markers of this type and elucidate the potential of this new subset of the variable human genome as specifically relevant for predicting drug response."

When did this more systematic screen occur? We do not know but I would imagine it was not in the period from July 10, 2002 to August 20, 2002.

What is the significance of the dates? The consulting agreement is dated June 12, 2002. This would have had to have been negotiated and reviewed by both DNAP’s and PSU’s legal advisors. This process did not take place overnight. What do you think the elapsed time concerned was? Six months? Twelve months?

What about the dates of the patents applications? Here they are for the US patent applications for Ovanome and Statnome:

Ovanome
60/334,310 Filed 28 November, 2001
60/410,363 Filed 11 September 2002

Statnome

60/301,867 Filed 29 June, 2001
60/310,783 Filed 7 August, 2001
60/322,478 Filed 13 September, 2001

What can we infer? The Ovanome patent application may well have benefited from Mark Shriver’s AIMs (if it needed to). We can not necessarily say the same about the Statnome patent application, but we do know that DNAP had developed complex classifiers previously without Mark Shriver’s AIMs in any case.

Now let’s go back to your questions. I will put comments in italics after them (I have taken the liberty of correcting your spelling lol).

-Given the history of Shriver's arrival and the subsequent and very immediate patent application bearing both names, is it fair to assume that the new 'advantage' in developing pharmacological classifiers, was a fairly sudden departure from the previously developed technology that bore the previously announced development projects Statinome and Ovanome?

Not necessarily as the above demonstrates. I think that the collaboration may well have enabled subsequent update of the two projects (and patents).

-Since the competitive advantage had a limited timespan (until the USPTO published the application) can we assume that that advantage has been exploited vigorously and the scientific team has developed new classifiers in the interim?

I am not sure if you meant to use the past tense here. I do not personally think that the competitive advantage ends with the publication of the application (or the patent itself). In that case what they have or have not been doing in the interim is not directly relevant to this point IMO.

-As the advantage post dates the Statinome and Ovanome classifiers and the competitive advantage was necessarily short lived, does this explain the apparent 'back burner' status of these previously highly touted products? The limited resources of the company would necessarily have to be devoted to developing products based on the short lived competitive advantage.

Again, the advantage does not necessarily post date the classifiers or that the competitive advantage was short lived. I also do not think that this explains the “back burner” status. We can assume that work on the classifiers has not been as rigorous as might have been the case with additional funding and without the intervening concentration on Ancestry. However, it is clear that work has continued in part on the two products.

-Now that the application has been published and the 'headstart' has played out, can we expect to hear about all the new classifiers that have been developed during the protected timeframe?

See above.

-If there have been no new products developed in the interim due to monetary or resource limitations, what advantage still exists now that the 'cat is out of the bag' so to speak?

The advantage conferred by the patent application and, in due course, by the patent itself.