Diagnostic: Has Roche found its way to Next Generation Sequencing?

News published on September Wednesday 25, 2013
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Roche and Pacific Biosciences (Nasdaq: PACB) announced yesterday an agreement under which they will develop systems and consumables in the Next Generation Diagnostic space. These products will be based on PACB’s Single Molecule Real Time technology (SMRT). Roche will pay USD35m in upfront payment as well as USD40m in potential milestones in exchange for the commercial rights for in vitro diagnostics (IVD) applications. PACB will continue to market the products in the field outside IVD applications such as research, applied sciences and animal. Key takeaways: 1/ Interest in clinical applications for IVD is growing and therefore confirming the strategic move made by companies such as Qiagen. 2/ Today’s agreement underlines Roche’s willingness to be an important player in NGS as shown by the attempted acquisition of Illumina. As a consequence of the collaboration with PACB, we see lower probability of a renewed offer on Illumina.

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