Under their five-year worldwide agreement, Roche Applied Science, a business area of Roche Diagnostics, will sell 454's nanotechnology-based genome sequencing systems, including kits and reagents. It will distribute the products through Roche Diagnostics' supply chain, and provide technical support.
454 will receive up to $62 million in license fees, milestones for instrument releases, minimum royalties and research funding. It will also receive a margin on products manufactured for Roche Diagnostics, as well as royalties on net sales of licensed products.
Roche can sell the products to all markets except for "regulated diagnostics." Roche has the option, though, to negotiate for an expansion of the agreement within the next five years to include this market. It may also renew the agreement after five years if certain undisclosed performance criteria are met.
According to Peter Dacey, 454's vice president of finance, the company currently only focuses on research applications for the technology, but believes "there is a future potential" in diagnostics.
454 Life Sciences, a subsidiary of CuraGen, will manufacture the instruments and reagent kits. If sales ramp up, Roche Diagnostics may start manufacturing the reagents.
Separately, 454 said today it has named Christopher McLeod as its president and CEO. McLeod is an executive vice presdent of CuraGen. Jonathan Rothberg has stepped down as CEO of CuraGen to become chairman of the board of 454 Life Sciences. He is replaced by Patrick Zenner, a CuraGen board member, on an interim basis until a new CEO has been found.
The sequencing technology developed by 454 allows users to sequence over 5 million nucleotide bases per hour. It is based on picoliter-technologies, light emitting sequencing chemistries, and informatics.