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TWST: Could you start out by giving us a brief overview of Caliper Technologies Corporation (Nasdaq:CALP)?

Dr. Kisner: Caliper was founded in 1995. It is a microfluidic lab-on-a-chip technology company that uses the technology of microfluidics to improve, miniaturize, integrate and automate laboratory research in a number of different laboratory settings. We have started by developing LabChip® applications of interest to the pharmaceutical industry, but will eventually be expanding this technology into other industries where laboratory science exists: diagnostics, ag/bio, the chemical and petrochemical industries, and so forth. Today, we are a commercial company. We’ve been selling products into the market since 1999. Our first product line is our Personal Laboratory System, which is being commercialized by Agilent Technologies as the Agilent 2100 Bioanalyzer. It is a device that runs a menu of different applications that are commonly used in drug discovery laboratories. Each application runs on a different chip. For example, today that system runs a full battery of electrophoresis applications with four different DNA electrophoresis applications, one RNA application, and one protein electrophoresis application. This is a desktop machine. It is a medium throughput device that’s of use to individual researchers at the bench. It provides for quite a lot of flexibility in their day-to-day activities, given the fact that this one small machine, about the size of a toaster, if you will, runs a menu of different tests commonly done in research laboratories. We also have a high throughput instrument format that we use for a number of different applications. This format actually involves the use of a specialized microfluidic chip that pulls up, through a capillary sipper, the reagents out of 96 or 384 well plates. It’s a reagent accession system that we call a sipper chip system. We have a number of different machines that will run high throughput experiments using these sipper chip microfluidic devices as a way of getting chemicals and reagents into the channels on the chip for the chemical reactions to take place. Initially, we are using this sipper chip technology in our high throughput drug screening systems. Screening chemical libraries against therapeutic targets for drug delivery is an activity that the pharmaceutical industry is doing in much greater quantities every year. We are able to dramatically reduce the quantity of the reagents — both the chemicals in the libraries, as well as the targets and substrates, such as cells that represent targets for high throughput screening purposes — and dramatically lower the cost of the experiments to the pharmaceutical industry. Our revenue will come from charging them on a per data point basis.

TWST: How do you think that your R&D expenditures will change in the future, in terms of both amount and emphasis?

Dr. Kisner: I think our R&D expenditures will continue to increase somewhat as we invest in developing new commercial products. But I don’t anticipate dramatic increases in R&D spending that would have an adverse impact on our bottom line. We think that it’s very likely that the number will be a similar percentage of revenue that it has been in the past.