BASEL, Switzerland–Roche Diagnostics announced in early May that it had entered into an exclusive, five-year, world-wide agreement for the development, promotion, sale and distribution of 454 Life Science's nanotechnology-based Genome Sequencing Systems, including proprietary kits and reagents. Under the terms of the agreement, 454, a division of CuraGen Corp., will receive up to $62 million in license fees, milestone payments related to instrument releases, minimum royalties and research funding.
The agreement makes Roche the latest in a string of global life science companies to forge a business relationship that positions it in the genome sequencing area – a sector which is expected to undergo dramatic change in the coming years. "Currently, we play in many areas of the genomics market," says Lonnie Shoff, vice president and general manager of Roche Applied Science.
"Up until now we didn't have an offering in sequencing. While it is a slow growing part of the business right now, we think that this is a disruptive technology that will ignite a new technology growth dynamic."
At the heart of the deal is 454's nanotechnology–based sequencing system, which the company claims allows researchers to sequence nearly 100 times faster than other technologies currently available commercially. "Customer feedback and our own research show that one of the main limitations of today's approaches to sequencing is throughput," says Heino von Prondzynski, CEO of Division Roche Diagnostics, in a press release announcing the deal. "This new technology will significantly increase the speed of sequencing, and thereby has the potential to open up many new applications for sequencing to researchers all over the world."
The agreement between the two companies is straightforward: Roche will use its market reach and global marketing muscle to sell the tool and related kits and reagents, which in turn will allow 454 to continue its R&D program to continually improve the product. Commercialization efforts for the instrument systems and proprietary reagents began earlier this year with the first sale completed recently to the Broad Institute at MIT. And that is just the kind of customer, Shoff says, Roche anticipates for the tool, at least in the earlier stages.
"We believe the primary target for this will initially be genome centers and large research institutions either academic or pharmaceutical," Shoff says. "It will be for large scale sequencing and sequencing of drug targets."
This customer profile may change in the coming years as some of the incentive milestones for 454 focus on continuing to develop next-generation versions of the current technology and explore appropriate applications for high-throughput sequencing. The ultimate goal is to provide faster sequencing while reducing the overall price of the system itself.