Pacific Biosciences of California, Inc. announced that F. Hoffman-La Roche Ltd (Roche) has elected to terminate for convenience the development, commercialization and license agreement with Pacific Biosciences for the development and supply of diagnostic products based on the company’s Single Molecule, Real-Time (SMRT) technology.

The agreement, which was entered into by the parties in 2013, provides the option for Roche to terminate the agreement for any reason with sixty days’ prior notice. Upon termination, other than retaining certain non-exclusive rights with respect to using products already purchased from Pacific Biosciences under the agreement, Roche will have no rights to SMRT technology, and Pacific Biosciences will be free to commercialize products based on the Sequel sequencing platform into the clinical research and sequencing market, directly or with other distribution partners.

“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 very proud of the achievements and performance of the Sequel System, which were showcased at the recent ASHG annual meeting and PacBio Workshop in Vancouver.”

“The clinical research and sequencing market and regulatory environment have evolved during the three years since we entered into this agreement with Roche. While we are disappointed with Roche’s decision to terminate the agreement, we are already familiar with this market and Roche’s decision does not significantly change our near-term plans for expanding our business to address this market,” continued Dr. Hunkapiller. “The long-term goal of this agreement was for Roche to pursue the in vitro diagnostic market with regulated, assay-specific tests based on the Sequel platform and, to that end, Roche was focused on developing certain targeted assays and additional software features on the Sequel System.”

“We are prepared to immediately pursue opportunities in the clinical research and sequencing market which do not require the supply of assay-specific kits and we have already seen interest from customers in this space, which we believe currently represents the majority of this market. The quality framework we have developed while working with Roche and ur existing ISO 13485 and ISO 9001 certifications position us well to address this market,” concluded Dr. Hunkapiller.

Pacific Biosciences continues to see strength in its business. The company’s product and service revenue for 2016 is on pace to grow between 55% and 65% over 2015. The company is targeting to grow product and service revenue by another 40% to 60% in 2017.

Pacific Biosciences of California, Inc. offers sequencing systems to help scientists resolve genetically complex problems.