Roche Dumps Pacbio

Yesterday, Pacbio received its Christmas present for 2016. Roche decided to abruptly terminate its three year-long alliance with the company. During this collaboration, Roche paid Pacbio to develop the Sequel instrument and reserved the exclusive right to sell it in the human clinical market.

“The Sequel System was developed during the period of our collaboration with Roche and has achieved all of the milestones set forth in our agreement,” said Dr. Michael W. Hunkapiller, Chief Executive Officer of Pacific Biosciences.

We are not being sarcastic in saying ‘Christmas present’, because this is clearly a blessing in disguise for Pacbio. To understad, you need to know about the history of Roche in acquiring cutting-edge technologies.

Between 2002-2006, we worked on the maskless array technology from Franco Cerrina’s lab, which was commercialized by Nimblegen. Many of the early genomics papers using the technology were written by me and our collaborators.
Then Roche acquired Nimblegen in 2006 and discarded all existing arrangements. “The focus is on the human clinical market’, the newly installed management told me. Roche also acquired 454, another company with amazing technology, at the same time. Those acquisitions turned out to be kisses of death for both Nimblegen and 454.

With that background, surviving alone seems like a better choice for Pacbio than being killed by Roche. We also noticed that Pacbio managed to raise money, while its stock was high over the last year. That gives them some room to operate without planning layoffs due to the lack of cash coming from Roche.