PacBio looking for new opportunities to market Sequel platform in clinical markets

Roche is axing its development, commercialization, and license agreement with Pacific Biosciences, through which the companies had been developing diagnostic systems based on PacBio’s Single Molecule, Real-Time (SMRT®) technology, for the clinical and clinical research markets. Roche said it will now focus more intently on its internal R&D efforts to  “drive our long term strategy, which is to be a leader in clinical diagnostic sequencing,” according to Neil Gunn, head of Roche Sequencing Solutions. ‘”We are continuing to actively pursue multiple technologies and commercial strategies internally and externally to ensure we address the specific needs of our customers in the clinical diagnostic sequencing market segment,” he said in a statement. 

The firms had signed the SMRT technology agreement back in 2013, with Roche retaining the option to pull out, for any reason, with 60 days notice. Terminating the deal effectively severs Roche’s rights to the SMRT technology, apart from specific nonexclusive rights to the use of products already purchased from PacBio. The latter now can commercialize products based on the SMRT Sequel™ sequencing platform, which was developed during the Roche partnership, for the clinical research and sequencing markets, either on its own or through distribution agreements.

Michael W Hunkapiller, PacBio CEO, said Roche pulling out of the agreement will not affect his company’s near-term plans. ‘We are prepared to immediately pursue opportunities in the clinical research and sequencing market, which do not require the supply of assay-specific kits and we have already seen interest from customers in this space … While we are disappointed with Roche’s decision to terminate the agreement, we are already familiar with this market and Roche’s decision does not significantly change our near-term plans for expanding our business to address this market.”

Just last month PacBio filed a patent infringement claim against Oxford Nanopore Technologies, claiming that the latter’s MinION and PromethION devices and associated consummables, reagents, and software, infringe one or more of its own sequencing patents. Also last month PacBio reported product and service revenues of $21.5 million in Q3 2016, up 109% on Q3 2015 figures. Gross profits for the period were $12.6 million, compared with $6.6 million in Q3 2015, with gross margins increasing from 47.1% to 50.3%. The firm said the gross profit and margin increases were due largely to higher margin sales of the Sequel system. A net loss of $17.5 million for the third quarter of 2016 (net loss per share of $0.19) compared with a net gain of $1.8 million in Q3 2015, and net income per share of $0.02, which were driven primarily by a one-time gain on lease amendments, of $23 million.

Previous articleCancer Branches Early, Bears Metastatic Fruit Later
Next articleGyros and Abacus Ink Distribution Deal