Affymetrix, the pioneer of DNA microarray technology, will acquire ParAllele Bioscience for about $120 million in a deal expected to close in the third quarter of the year.

 Affymetric co-founder and Chief Executive Officer Steve Fodor and colleagues invented the DNA microarray in 1989, and the company sold the first commercial device in 1994. In October 2003, Affymetrix, based in Santa Clara, Calif., offered the first whole-genome DNA chip. Major competitors include Agilent Technologies, Applied Biosystems, GE Healthcare and Nimblegen Systems.

 ParAllele offers genetic discovery products are based on biochemical processes, rather than instrumentation, for biomedical research, pharmaceuticals and diagnostics.

 The companies have been working together for the past two years, with Affymetrix using ParAllele's assay technology with the Affymetrix GeneChip technology, according to Andrew Noble, Affymetrix public relations manager. Affymetrix expects to strengthen its assay research-and-development capabilities and add knowledge in specific assays capabilities through the acquisition.

 A key technology that ParAllele brings to Affymetrix is its proprietary molecular inversion probe (MIP) assay. "The MIP assay is a very flexible and highly specific assay, which can be scaled to large levels of multiplexing. So we can do tens of thousands of interrogations at one time," says Tom Willis, chief scientific officer and co-founder of ParAllele.

 A combination of Affymetrix’ GeneChip tag array and ParAllele’s MIP technology was applied in the international Haplotype Mapping Project (HapMap), although until now the assay has only been applied by Affymetrix to genotyping. "But the potential applications are much broader,” says Fodor. “We intend to use this innovative assay technology [MIP] to develop new product lines for applications, including chromosome copy number, targeted RNA analysis and DNA methylation among others.”

 ParAllele assays are already used in clinical applications, said Willis. "For instance, we currently are working with Eli Lilly to use our assay to look at variations in genes that are involved in drug metabolism and transport."

 ParAllele was founded in 2001 by a team of scientists from the Genome Technology Center at Stanford University. The company currently has 80 employees working at its research facility in South San Francisco. ParAllele will remain in South San Francisco and Willis will stay as senior researcher for the team he currently leads, although the fate of the ParAllele name is unclear.