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Natera Terminates Qiagen Agreement for Developing NGS-Based Genetic Tests

NEW YORK – Natera said after the close of the market on Thursday that on March 8, it terminated its license, development, and distribution agreement with Qiagen to develop and distribute next-gen sequencing-based genetic tests.

Under the agreement, struck two years ago and meant to last for 10 years, the companies had planned to develop cell-free DNA assays for prenatal screening using Qiagen's GeneReader sequencing system. Natera had received an upfront license fee and prepaid royalties totaling $40 million as well as $5 million in tiered royalties.

However, last October, Qiagen said it was discontinuing development of the GeneReader and was partnering with Illumina to develop diagnostic sequencing panels.

In a filing with the US Securities on Thursday, Natera said it notified Qiagen of its material breach of their agreement, giving Natera the right to terminate the agreement.

Provisions in the agreement call for payment by the breaching party "in certain circumstances," Natera said, and all or a portion of the prepaid royalties are refundable "in limited circumstances."

Both parties "are currently in discussions regarding their respective obligations resulting from the termination of the agreement," according to the filing.

Natera's announcement comes a little more than a week after Thermo Fisher Scientific said it would acquire Qiagen for $11.5 billion in cash.