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Roche Exits Semiconductor, Nanopore Sequencing; Cuts 60 Positions at 454 as It Builds New NGS Unit

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Roche is shutting down its research and development efforts in semiconductor sequencing and nanopore sequencing and is consolidating its 454 and NimbleGen products into a new sequencing unit that will cover both life science and clinical diagnostic applications.

The changes are part of the company's decision, announced today, to dissolve Roche Applied Science, the life science unit of its Diagnostics division, by the end of this year and to integrate Applied Science's products with other units.

The restructuring will not affect customers of Roche's 454 sequencing platforms or NimbleGen DNA capture products, according to Dan Zabrowski, head of Roche Applied Science, who will head the new sequencing unit.

"We are fully committed to [our] life science business, and this decision did not have an impact on any of our businesses or customers," he told In Sequence. "We continue to think that sequencing is going to play an important role in life science and in the clinic."

As a result of the reorganization, about 60 positions at Roche's 454 Life Sciences site in Branford, Conn., will be eliminated, about a third of the current staff.

The "vast majority" of these are related to Roche's collaboration with UK-based DNA Electronics to develop a semiconductor sequencer, which the company decided to end, Zabrowski said. "We did not feel that the product was going to disrupt the market once we brought it to the marketplace."

Roche had been working with DNAe on ion sensitive field effect transistor, or ISFET, technology since 2010 (IS 11/2/2010), with the goal of commercializing a DNA sequencer that would likely have competed with Life Technologies' Ion Torrent platforms.

Earlier this year, Roche said that the collaboration with DNAe was a major area of focus for its R&D and that the partners had recently demonstrated DNA sequencing on their semiconductor chips (IS 1/22/2013).

DNAe will continue to develop a semiconductor sequencing platform on its own. "Harnessing additional unlicensed IP, and without any limitations on field of use, DNAe will now continue the development of the platform but with a new focus to create a disruptive total solution,” said Chris Toumazou, the company's CEO, in a statement today.

Roche also decided to end its collaboration with IBM to develop a solid-state nanopore sequencer based on IBM's "DNA transistor" technology, a partnership it initiated in 2010 with an estimated commercialization timeline of about five years (IS 7/6/2010).

"It was still, after a couple of years, considered a very early, high-risk project," Zabrowski said, prompting Roche to withdraw. A related licensing agreement around nanopore readout technology, developed by Stuart Lindsay at Arizona State University and Colin Nuckolls at Columbia University (IS 10/11/2011), expired earlier this year, he said. It is unclear whether IBM will continue the nanopore sequencing project without Roche.

Roche's new sequencing unit, led by Zabrowski, will encompass the 454 Branford site and the Roche NimbleGen site in Madison, Wis., which did not lose any positions in today's restructuring. The size and headquarters of the new unit have yet to be determined. In addition, Thomas Schinecker, president of Roche Sequencing Solutions, will become general manager of Roche Diagnostics Germany in June.

One task of the new unit will be to create and implement a sequencing strategy that will include both life sciences and clinical diagnostics. "That is a change − 454 has historically been responsible for sequencing in the life science business," Zabrowski said. "We want to have a sequencing business that really has a focus from life science all the way through clinical diagnostics."

As part of that mission, Roche plans to participate actively in ongoing discussions about how the diagnostic use of next-gen sequencing should be regulated. "We will spend a lot of our energy helping to contribute to the regulatory pathway for IVD in sequencing," he said.

It is unclear, though, what platform Roche intends to use to develop its own sequencing-based diagnostics. The firm's 454 GS FLX+ and GS Junior platforms, which use pyrosequencing technology, will remain for research-use-only, Zabrowski said, and the firm has no plans to submit any pyrosequencing-based sequencers to the FDA. This raises questions about whether Roche is developing another sequencing platform in house that it intends to apply to diagnostics or whether it will seek a partnership or an acquisition to further its goals in the clinical sequencing market.

Another objective of the sequencing unit will be to build Roche's R&D portfolio around sequencing and related technologies "from internal and external opportunities, with projects that we believe can be differentiated from the market and potentially disrupt the market," Zabrowski said. This will include "getting involved in many more academic collaborations and small company partnerships."

In the meantime, industry observers are speculating that Roche has its eyes on Life Tech's Ion Torrent business, which will become part of Thermo Fisher Scientific next year under an acquisition deal announced last week (IS 4/16/2013). "Roche's statement that it 'will be unable to disrupt the market with the [DNAe semiconductor] product at launch' could be read either as the company doesn't believe in semiconductor technology or that it could be looking at acquiring Ion Torrent from [Thermo Fisher and Life], which was speculated following the announcement of the [Thermo Fisher/Life] deal and reports that Roche had partnered with Sigma-Aldrich to make a competing bid," said ISI Group research analysts Ross Muken and Vijay Kumar in a report today.

Roche's new sequencing unit will also continue to sell and support 454's sequencing platforms and other products, as well as NimbleGen's sequence capture product line. It will continue to launch new products, both for sequencing and for target enrichment, including a long-read amplicon sequencing upgrade to the GS FLX+ and GS Junior systems that is planned for later this year.

The company has not decided, though, whether it will continue to develop an automated emulsion PCR device with its Japanese partner, Precision System Science (IS 1/22/2013), Zabrowski said. That system was designed to work with both the existing 454 platforms and with the new semiconductor sequencer.

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