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Dear Stockholders,
Over the past year, Affymetrix achieved tremendous growth and progress. We launched innovative new genomics products, expanded our customer base more than three-fold, sold over 150 GeneChip systems, and shipped more than 200,000 GeneChip arrays, doubling 1999 levels. As a result, revenues rose to $200.8 million from $109.1 million in the previous year. We also strengthened our R&D, manufacturing and commercial capabilities, and executed several major strategic initiatives to capitalize on our powerful technology and position us for continued leadership in the Genetic Age.
Our most immediate business opportunity is the large and rapidly growing expression profiling market, where our products are the technology of choice for comprehensive functional genomic studies. We offer customers an integrated total system solution consisting of our GeneChip DNA probe arrays, instruments, reagents and software. In 2000 we introduced 18 new products, three of which are whole genome high-density arrays. Demonstrating the flexibility and scalability of our manufacturing process, our next-generation human array set, for example, analyzes twice as much genetic information per chip at essentially the same cost to our customers.
We completed our acquisition of Genetic MicroSystems, Inc. in early 2000, immediately establishing a leading presence in the marketplace for lower-density, customer-defined arrays, which complement our GeneChip high-density products. These two product lines facilitate a wide range of research activities while accelerating the adoption of DNA array technology. Sales of these products have been strong with over 650 Affymetrix Arrayers and Scanners sold worldwide.
Demand for our technology increased significantly last year, as more commercial and academic customers entered into new GeneChip array supply agreements. We signed numerous new EasyAccess™ Silver agreements with pharmaceutical firms such as Novartis Pharmaceuticals Corporation, the R.W. Johnson Pharmaceutical Research Institute, Procter & Gamble Company, and Schering AG of Germany. We also entered into BiotechAccess™ agreements with over a dozen companies, including Lexicon Genetics Incorporated; PPD Discovery, the drug discovery subsidiary of PPD, Inc.; Isis Pharmaceuticals, Inc., Iceland Genomics Corporation, and Sangamo BioSciences, Inc., among others. In addition, our AcademicAccess™ program has been highly successful, attracting well over one hundred academic centers of excellence worldwide since its initiation in late 1999.
We continued to build our intellectual property position in 2000, and now have more than 100 issued and 300 pending patents in the United States, with extensive foreign filings. We also accelerated our licensing program, which generates additional revenues while expanding the DNA array market. To date, we have provided over 30 internal and commercial-use licenses covering low- and medium-density DNA array products that complement our GeneChip offering. To protect this significant investment in core technology, we have sometimes found ourselves engaged in litigation. In the past year, we received several favorable decisions in ongoing cases involving Hyseq, Inc. and Incyte Genomics, Inc. I am also pleased to report that we recently settled our litigation with Oxford Gene Technology Limited.
We significantly strengthened our operations during the past year. In response to rapidly growing demand for our products, we increased manufacturing capacity at our West Sacramento and Sunnyvale, California plants, which together are capable of producing well over one million chips per year, depending on individual chip size. We can rapidly expand this capacity three-fold to meet demand. We also established three sales regions covering the major worldwide markets as we continue to build our global infrastructure. Overall, the Affymetrix workforce has grown from 500 to over 700 employees. To support our ongoing expansion efforts, we have a strong balance sheet that at year end included over $436 million in cash and available-for-sale securities.
In late 2000 we took three aggressive strategic steps to ensure our continued leadership and growth. These initiatives propel Affymetrix into the heart of whole genome analysis and position the Company to take full advantage of new information from the human and other genomes as it becomes available. First, we acquired Neomorphic, whose industry-leading genome annotation tools will accelerate the introduction of additional whole genome GeneChip arrays and related software products designed to simplify data management and analysis. Second, we formed Perlegen Sciences to scan 50 human genomes with unprecedented speed and uncover the fundamental patterns of human variation. These patterns will be available to Affymetrix to incorporate into future generations of genotyping arrays. Finally, we are participating in a public-private consortium to sequence the mouse genome to accelerate the availability of this information to all researchers. As part of this effort, we will develop new mouse whole genome GeneChip products.
Looking forward, we are confident that our current plans and ongoing investments will keep us at the forefront of the genomics field. By placing the power of whole genome analysis in the hands of scientists worldwide, we expect to be a driving force in the Genetic Age. In this way, we believe we can create significant value for our customers, employees, stockholders and society as a whole.
Susan E. Siegel
President