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Gen-Probe Invests $50M in PacBio; Companies to Co-Develop Sequencing-Based Diagnostics

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By Monica Heger

This story, originally published on June 17, has been updated to include comments from Pacific Biosciences' CEO and Gen-Probe's senior vice president of strategy.

Nucleic acid test developer Gen-Probe said last week that it has made a $50 million investment in Pacific Biosciences and that the companies plan to co-develop a system that uses PacBio's single-molecule real- time sequencing technology.

The system will likely be based on PacBio's "version 2" technology, which is scheduled to launch in 2014, and could be either a point-of care system or something better suited to a larger clinic or service center, In Sequence has learned.

The investment was part of a larger round of Series F financing by PacBio, and adds to the company's $266 million that is has raised since it was founded in 2004. A PacBio spokesperson said the company is not disclosing further details of this most recent round of financing.

The investment also marks Gen-Probe's entry into the sequencing market. The company has been in molecular diagnostics for over 15 years, but has focused its efforts on nucleic acid tests based on its transcription-mediated amplification technology, with a particular focus on sexually transmitted diseases, tuberculosis, strep throat, pneumonia, and fungal infections. Last year, Gen-Probe acquired Prodesse, which had been developing PCR-based molecular diagnostic tests, including ProParaflu, which received FDA clearance last year to detect parainfluenza viruses from nasal swabs.

Eric Tardif, Gen-Probe's senior vice president of strategy, led the deal with PacBio. He told In Sequence that the company had been keeping its eye on sequencing companies and waiting for the right time to enter the field.

"We think that the single-molecule technologies are really the first instance of next-gen sequencing that will be truly relevant in diagnostics," Tardif said.

There are already a number of players looking to apply next-gen sequencing to diagnostic applications. For example, Emory University's Genetics Laboratory recently began offering genetic testing using the Life Technologies SOLiD platform (IS 5/25/2010), and the National Center for Genome Resources is developing a sequencing-based carrier screening test (IS 3/30/2010), while instrument vendors like Ion Torrent and Helicos have signaled that they intend to target their systems to the molecular diagnostic market.

Gen-Probe's Tardif acknowledged that there are already some sequencing-based applications in diagnostics, but noted that the cost, throughput, turnaround time, and the sheer amount and complexity of the data "are all impediments to broader introduction."

Tardif said that the company did a "systematic review" of available sequencing technologies to determine which would have the most relevance in diagnostics and that PacBio came out well in that analysis. Gen-Probe is not seeking to invest in any other sequencing companies for the time being because its agreement with PacBio is exclusive for 30 months.

"We don't know what's going to happen after the 30-month period," said Tardif. "If we succeed in the collaboration and things look good, our intention would be to have some kind of long-term relationship with PacBio."

PacBio will be able to tap into Gen-Probe's experience in developing regulatory approved diagnostic tests. However, both companies said that it was too early to say what a system approved by a regulatory agency would look like. "The current regulatory world isn't really designed to deal with the massive amount of information that could potentially come out of sequencing," said Tardif. "There's going to be a lot of evolution for how these products are brought to market."

PacBio's CEO Hugh Martin said that the system would most likely be based on the company's "version 2," or V2, system — a highly multiplexed technology that integrates sequencing, optical detection, and signal processing into a microchip. The company is targeting 2013 for a V2 early-access program and 2014 for a commercial launch in 2014 (IS 2/23/2010).

The goal is not to have a product by the end of the 30 months, said Martin, but rather to "have a very firm definition and specification for what we're going to do."

PacBio plans to rely on Gen-Probe's expertise in clinical diagnostics to determine "what changes will need to made to the [V2 system] to make sure it is custom-tuned for the diagnostics market."

However, Martin said that the focus on the V2 technology did not preclude the possibility of developing diagnostics based on the company's current platform, which will launch this year. "There may be applications for it in diagnostics," he said, "and we might have something in the market sooner based on the current technology."

Another goal of the agreement with Gen-Probe is to figure out the "sweet spot of the market." Martin said that the V2 technology was flexible, and could be used for point-of care diagnostics, in a clinical lab setting, or in a major service provider.

"We could do anything from a very inexpensive desktop system that could sell for less than $30,000, up to a $350,000 genome center like-application, all with the same architecture," he said.

Martin said that PacBio will also be evaluating what the cost of a test would need to be and the required amount of sequencing — whether it would be a whole-genome sequencing-based test, or just a subset of the genome.

He said that the first application of the system would likely be in infectious disease detection, but in the long term, the system would have the most relevance in cancer diagnostics.

"Infectious disease is an area that will emerge first largely because the genomes of the pathogens are smaller and better understood, but over time, I think cancer will be the really big application," Martin said.

He added that the PacBio technology is well-suited for cancer diagnostics, which will require not only searching for gene mutations, but also an evaluation of structural variation and methylation.

"The fact that we have much, much longer read lengths than any other technology, and the fact that we can get these tests done in a matter of minutes at a very low cost, and [that] we can detect methylation essentially for free, means that it's going to have great applicability" for diagnostic purposes, Martin said.

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