Roche to close 454 Life Sciences as it reduces gene sequencing focus

Roche ($RHHBY) is taking another step toward reducing its focus on gene sequencing by shutting down 454 Life Sciences, a subsidiary in the space it acquired from Curagen more than 6 years ago for $155 million.

Bio-IT World reported that the move reflects Roche's plan to deemphasize gene sequencing somewhat after failed attempts to invest more in the sector. Last year, for example, Roche made a $6.7 billion hostile takeover bid for gene sequencer Illumina ($ILMN), and the effort ultimately failed.

Roche's purchase of 454 was intended to give it a lead in gene-sequencing technology. And as the article noted, in the beginning 454 was a leader, and became the first to make a next-generation sequencer commercially available several years ago. Roche coveted the company and maintained an exclusive distribution deal with 454 from 2005 until 2007 when it bought 454 outright. But over time, other rivals surged past 454, as companies such as Illumina and Ion Torrent gained an edge with their next-generation sequencing projects, the story pointed out.

Roche has subsequently decided to cut its losses. The Swiss giant is in an ongoing effort to dissolve its applied science business and slash the 170 jobs it supported, with plans to shift research projects that still make money over to diagnostics. Roche also eliminated two major R&D projects focused on third-generation gene sequencing.

Roche still has a foothold in gene sequencing. In September, it signed an in vitro diagnostics product development deal with struggling gene sequencer Pacific Biosciences ($PACB) worth as much as $75 million, if developmental clinical milestones can be met. Roche will exclusively sell gene-sequencing products developed by Pacific Biosciences to researchers focused on human in vitro diagnostics research.

As far as 454, Roche will wind down the division gradually with plans to lay off its 130 employees in the coming months. Roche will still produce 454 sequencers through 2015, and service the products through the middle of 2016, according to the story.

- here's the full Bio-IT World story
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