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Sep 25, 2013

Roche, Pac Bio in Up to $75M Clinical Diagnostics Deal

  • More than a year after Roche tried but failed to buy DNA-sequencing product leader Illumina, Pacific Biosciences said today it will partner with the pharma giant to develop and supply DNA sequencing-based instruments and other products for clinical diagnostics, in a deal that could net Pac Bio up to $75 million.

    Roche tried but failed twice last year to buy Illumina, whose board rejected offers for the sequencing giant of $5.7 billion, then about $6.5 billion. A GEN article at the time noted a comment by Roche Chairman Franz Humer that his company had “other options” if its hostile takeover attempt to buy Illumina proved unsuccessful: “Illumina is not the only gene-sequencing company, and there are other companies making quantum leaps in this field.”

    Now, Pac Bio’s Single Molecule, Real-Time (SMRT®) technology will be the basis of the new diagnostic products to be developed with Roche Diagnostics. Under their agreement Pac Bio plans to develop and manufacture products intended for clinical use, which will be sold exclusively to Roche.

    Roche acquired worldwide rights to exclusively distribute the products, agreeing to pay Pac Bio $35 million up front, with the potential for up to $40 million in additional payments tied to development milestones.

    Once its development programs with Roche are completed, Pac Bio said it expects to receive income from the manufacture and supply of instruments, software, and certain consumable products that Roche will market and distribute for clinical use in combination with its assay-specific reagents. Pac Bio did not quantify how much in additional income it expects as a result.

    "We see great potential in Pac Bio's sequencing technology for the development of future clinical sequencing applications,” Dan Zabrowski, head of Roche’s sequencing unit, said in a statement. “We are looking forward to this partnership to accelerate and support the transition of DNA sequencing into routine diagnostics through our joint development efforts."

    Pac Bio added that it will continue to market its current and future products for all fields outside of human in vitro diagnostics, including research, plant, animal, and applied markets.



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