Roche and 454 Life Sciences enter exclusive world-wide agreement

12-May-2005

Roche Diagnostics adds ultra-fast nanotechnology-based genome sequencing system to its product portfolio and enters new market sector with significant potential

Roche and 454 Life Sciences, a majority-owned subsidiary of CuraGen Corporation announced that they have entered into an exclusive 5-year world-wide agreement for the development, promotion, sale, and distribution of 454 Life Sciences' nanotechnology-based Genome Sequencing Systems, including proprietary kits and reagents.

The hallmark of 454 Life Sciences' technology is the nanotechnology based approach to sequencing which allows a single instrument to produce over 20 million nucleotide bases per four hour run, totaling more than 100 times the capacity of instruments using the current macro-scale technology. 454 Life Sciences' technology is based on integrating proprietary picoliter-technologies, patented light emitting sequencing chemistries, and state of the art informatics. The patented Genome Sequencing System utilizes this technology and is a scalable, ultra-fast and cost-effective system with applications for whole genome sequencing and deep sequencing of genes of interest.

Under the terms of the 5-year, exclusive world-wide distribution agreement, 454 Life Sciences will receive a margin on products manufactured for Roche Diagnostics, and royalties on net sales of licensed products. 454 Life Sciences will receive up to $62 million dollars in license fees, milestones related to instrument releases, minimum royalties and research funding. Roche Diagnostics receives the rights to negotiate distribution of 454 Life Sciences products in the regulated diagnostic market and renewal of the exclusive distribution agreement contingent upon meeting minimum performance criteria.

Under the agreement, Roche Applied Science, a business area of Roche Diagnostics, will sell 454 Life Sciences' products through their extensive sales and marketing organization, distribute 454 Life Sciences' products through Roche Diagnostics' established supply chain, and provide technical support to purchasers of the 454 Life Sciences' Genome Sequencing System and the associated reagents. 454 Life Sciences will continue to manufacture instrument systems and reagent kits, with the option to transfer the responsibility for reagent manufacturing to Roche Diagnostics given sufficient sales volume. The agreement allows for Roche Diagnostics to sell 454 Life Sciences' products to all markets, with the exception of regulated diagnostics where Roche Diagnostics obtained an exclusive right to negotiate the extension of the exclusive distribution agreement into the regulated diagnostics market during the initial 5-year term.

454 Life Sciences began commercialization of instrument systems and proprietary reagents during the first quarter of 2005. The agreement with Roche Diagnostics will broaden the reach of 454 Life Sciences products, and enable 454 Life Sciences to focus on research and development of next generation technology and applications for high throughput sequencing.

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