Company plans to dramatically reduce cost of whole genome DNA sequencing & gene expression measurement

Solexa Limited and Lynx Therapeutics, Inc., (Nasdaq: LYNXD) today announced the completion of their previously announced business combination transaction. The combined company, incorporated in Delaware, is named Solexa, Inc. Solexa Ltd. has become a wholly owned UK subsidiary. The company has received approval for listing on the Nasdaq SmallCap Market and will begin trading Monday March 7th under the symbol SLXA.

John West, Solexa Ltd’s chief executive, has assumed the chief executive position of the combined company, which will be headquartered in California.

The board of Solexa, Inc. will include members from both companies’ pre-closing boards. Craig C. Taylor, previously Lynx Therapeutics’ Chairman, will chair the new board.

New Technology Platform for Genetic Analysis

Solexa, Inc is focused on the development and commercialization of a new platform for genetic analysis, based on Sequencing-by-Synthesis (SBS) and molecular arrays. This one platform is expected to support many types of genetic analysis, including DNA sequencing, gene expression, genotyping and micro-RNA analysis. This integration is possible because all are compiled from their fundamental DNA sequences. This technology can potentially generate over a billion bases of DNA sequence from a single experiment with a single sample preparation. The company anticipates an initial product launch by the end of 2005.

The capability to inexpensively and rapidly sequence the complete DNA of individuals is expected to transform much of genetics research and, in the longer term, genetic diagnostics. This comprehensive genetic analysis is expected to reveal both disease susceptibility and pharmaceutical suitability as never before. It is particularly applicable to the understanding of cancer, as cancer mutations are much more broadly distributed across the genome than others and can occur in any of thousands of genes. The technology is also applicable to other species with potential markets from agriculture to infectious disease.

The company’s long-term goal is to reduce the cost of human re-sequencing to a few thousand dollars. To put this into perspective, this would potentially provide total genetic information on an individual for less than the cost of a CT scan.

DNA sequencing has long been used as the gold standard for high precision gene expression measurement using techniques such as SAGE and MPSS™. These molecule-counting techniques create a digital gene expression profile for each sample. Because of their cost however, these techniques have never achieved major commercial scale. As Solexa Inc.'s new platform drives down the cost of sequencing, these ultraprecise methods are expected to become mainstream. Since the amount of sequencing required for a genome-wide gene expression measurement is about 2,000 times lower than that required for genome-scale re-sequencing, a $100,000 human genome sequence cost can be approximately compared with a $50 genome-wide gene expression assay. We anticipate demonstrating this capability by the end of 2005. As this technology obtains DNA sequence data from each cDNA molecule, it quantifies not just gene expression, but also relative transcript abundance.

The company’s initial strategy is to focus on the well established research market. This market includes DNA sequencing, gene expression and genotyping, all at full genome scale. These together already represent an approximately $1 billion market.