Under the terms of the agreement, Pacific Biosciences will develop and manufacture products intended for clinical use that will be sold exclusively to Roche. Roche will have worldwide rights to exclusively distribute these products for human in-vitro diagnostics. Pacific Biosciences will continue to market its current and future products outside of human in-vitro diagnostics, including research, plant, animal and applied markets.

 

Pacific Biosciences will receive an upfront payment of $35 million and as much as an additional $40 million in funding based on development milestones. After the development programs, Pacific Biosciences can receive income from the manufacture and supply of instrument, software and consumable products that Roche will market and distribute for clinical use in combination with its assay-specific reagents.

 

According to Mike Hunkapiller, president and CEO of Pacific Biosciences, the agreement accelerates the young company’s ability to enter into the diagnostic marketplace with an industry leader. As he explains, “At the end of last year, we began to look for potential partners within the diagnostics space to help us exploit the SMRT technology that we've developed, up to this point predominantly for the research and related type of applications. We felt that the unique capabilities of SMRT technology, the really long sequence reads that one gets with it, the granularity of the approach in terms of being able to scale from small, eventually to large projects on the same platform easily, the ability to do direct methylation analysis and the extremely high accuracy that one can get in sequencing using the platform by virtue of the really almost complete lack of bias relative to a particular sequence context, was ideally suited not just for the technologies areas that we can go after in the research space, but for the diagnostic market as well.”

 

He added, “Roche has the experience to help us get into the larger diagnostic marketplace, particularly the FDA-level cleared-type testing environments, as well as the marketing clout and the support organization within that marketplace. As a leader in the diagnostics marketplace worldwide, Roche brought the whole concept of molecular diagnostics into the diagnostic arena with its commercialization of the PCR technology in the last couple of decades. As a world leader in in-vitro diagnostics, Roche brings valuable expertise in designing products for clinical use and obtaining regulatory approvals to sell clinical products in the U.S. and around the world.”

 

Dan Zabrowski, head of the sequencing unit at Roche, believes that his company can benefit from being able to give clinicians information that was previously inaccessible, noting, “We see great potential in Pacific Biosciences' sequencing technology for the development of future clinical sequencing applications. Sequencing will be a key technology in addressing the strong and growing demand for genetic and genomic solutions in the clinic. We are looking forward to this partnership to accelerate and support the transition of DNA sequencing into routine diagnostics through our joint development efforts.”

 

“We are delighted to have Roche as our in-vitro diagnostics partner,” Hunkapiller concludes. “We believe the combination of our SMRT sequencing technology with Roche’s market position and expertise in diagnostics will allow accelerated commercial success for both companies.”

 

Pacific Biosciences products enable targeted sequencing to more comprehensively characterize genetic variations; de-novo genome assembly to more fully identify, annotate and decipher genomic structures; and DNA base modification identification to help characterize epigenetic regulation and DNA damage, enabling scientists to increase their understanding of biological systems. Roche, one of the world’s largest biotechnology companies, is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics, with differentiated medicines in oncology, infectious diseases, inflammation, metabolism and neuroscience.