Genetic Technologies in licensing deal with Sequenom

Melbourne based biotech company Genetic Technologies (ASX:GTG) expects to turn a profit this year after securing its first license agreement with a US-based company for use of GTG's non-coding patents for genomic mapping and intron sequence analysis.

GTG has granted San Diego based biotech Sequenom a non-exclusive license to use the patents to help expand the potential applications of its MassArray mass spectrometry platform. In return, Sequenom will pay GTG approximately $1 million in up-front license fees.

In addition, GTG has guaranteed Sequenom that any subsequent licences issued by GTG to other biotechnology companies for equivalent purposes will not attract a lower fee.

"We have been able to assure Sequenom that future agreements with other companies will not be for less than what Sequenom is paying," said Dr Mervyn Jacobson, GTG's executive chairman.

Dr Jacobson added that the agreement with Sequenom would assist GTG in its negotiations with other companies.

"As our first licence issued in the US, the Sequenom licence has considerable significance for GTG," he said. "We expect that it will now facilitate the consummation of new agreements with a number of other US companies with whom we've been negotiating,"

GTG has actively pursued a licensing strategy for its patent portfolio, and has discussions with more than 20 companies and institutions underway.

"This means validation and this means revenue," said Jacobson, stating that he believed that GTG would turn a profit this calendar year based on its licensing revenues.

"We are at that very nice stage where after years of preparing the ground, we can reap some of the benefits for our stockholders," he said.

"For a young biotechnology company only listed for two years on the stock exchange, this is quite an achievement."

GTG has also agreed to provide assistance to Sequenom in developing applications for its MassArray mass spectrometry platform using GTG's patents.

"They have a very powerful platform," said Jacobson, "We are keen to show them how to maximise the value of their license."

Previously, GTG has licensed its technology platform to Australian company Genetic Solutions.

At the time of writing GTG shares had risen 12.77 per cent to $0.53.