Pacific Biosciences of California, provider of the PacBio RS II DNA Sequencing System, has entered into an agreement with Roche Diagnostics to develop diagnostic products, including sequencing systems and consumables, based on Pacific Biosciences' Single Molecule, Real-Time (SMRT) technology.

Pacific Biosciences will develop and manufacture products intended for clinical use, which it will sell exclusively to Roche. Roche obtained worldwide rights to distribute these products in human in vitro diagnostics. Pacific Biosciences will continue to market its current and future products for all fields outside of human in vitro diagnostics, including research, plant, animal and applied markets.

Dan Zabrowski, head of the sequencing unit at Roche, said, "We see great potential in Pacific Biosciences' sequencing technology for the development of future clinical sequencing applications. Sequencing will be a key technology in addressing the strong and growing demand for genetic and genomic solutions in the clinic.”

Pacific Biosciences will receive an upfront payment of $35 million and an additional $40 million for development milestones. Pacific Biosciences also expects to receive income from the manufacture and supply of instrument, software and certain consumable products that Roche will market and distribute for clinical use in combination with its assay specific reagents.