Roche's ($RHHBY) new extended partnership with Cancer Genetics ($CGIX) will expand molecular diagnostic cancer testing in the Caribbean and Central America as part of a three-year deal.
As these things go, neither side is discussing financial terms. But the agreement basically groups both companies' diagnostics products and services together for maximum gain, respectively, as they seek new growth in emerging markets. The deal, which builds on an initial two-year agreement, lets the newly-public CGI become the exclusive provider of molecular diagnostic cancer testing for Roche's Roche Servicios division in both regions, covering lung, breast, lymphoma and other cancer testing, building on a relationship first established in 2012. This deal involves the use of Roche's FDA-approved cobas molecular diagnostic testing platforms.
CGI, which provides cancer diagnostic tests and laboratory services, plans to initially focus on cobas-based testing with an EGRF mutation test designed to help find the most targeted treatment for patients with non-small cell lung cancer that have the gene mutation. Those other cancer areas will come over time.
Panna Sharma, CGI's CEO, said that the agreement will help bring personalized cancer treatment to a region that has 255,900 new cases of cancer annually, according to American Cancer Society statistics cited by the company. The region has a lower rate of cancers than elsewhere in the world. But diagnostic services are lacking, leading to the identification of cancer when it is later stage and more serious, the company said, noting statistics from Lancet Oncology.
Cancer Genetics, a provider of cancer diagnostics and laboratory testing, raised nearly $7 million in an over-allotted IPO in April 2013, much lower than what it had initially sought. The company has since followed up with a $46 million offering as its share price has advanced. With money in hand, the expanded Roche deal will help Cancer Genetics gain a new audience for its diagnostic testing and services and generate seriously needed revenue. The company runs a clinical reference laboratory focused on state-of-the-art cancer testing, and is also developing molecular diagnostics for a number of different cancers.
Roche, a Swiss drug and diagnostics giant that commands about a third of the more than $3.6 billion global molecular diagnostics market, gets to keep the momentum going with this deal for its cobas platforms. This year, the company plans to launch its cobas 6800 and cobas 8800 in Europe and Japan--updates meant to help speed up molecular diagnostic testing and boost the number of samples that can be handled in a given period.
Roche Servicios CEO Alvaro Soto said in a statement that CGI, through the companies' initial two-year deal, "has continually demonstrated [its] commitment to both our quality requirements and response time needs."
- read the deal announcement