US giant LabCorp signs up for GTG license

Melbourne company Genetic Technologies (ASX:GTG) has added another large US company to its tally, with Laboratory Corporation of America Holdings -- otherwise known as LabCorp -- becoming the latest to license the company's non-coding DNA mapping and analysis patents.

The company is one of the biggest clinical diagnostics services in the world, with revenues of US$2.5 billion in 2002. In addition to providing clinical diagnostics services, including genetic and genomic testing, in the US and Canada, the company also offers testing services for clinical trials in the US and Europe.

While details of the deal have not been disclosed due to confidentiality agreements between the two companies, it includes a signing fee, plus annual payments for the life of the patents, which expire in 2015. "It's a significant transaction, cash-wise," said GTG executive chairman Dr Mervyn Jacobson.

Jacobson said the deal was significant for a number of reasons. "LabCorp is a huge company, so it's a bit of a bellwether for industry. For them to take a license is very significant," he said.

"Also, they are a major customer of Applera, so it says they are not waiting for Applera to protect them."

GTG is currently pursuing legal action against Applera, which GTG says has infringed its non-coding DNA patents. Applera is the parent company of Applied Biosystems, Celera Genomics and Celera Diagnostics.

LabCorp is also withdrawing its own claim against GTG, which was filed as a Declaratory Action against the company in the District Court of New Jersey, as a result of signing to the agreement with GTG. Jacobson said he expected final confirmation that the legal proceedings would be dropped in the next few days.

"My understanding is that it was not a serious action, more just part of the game [of negotiation]," he said.

In addition to the non-coding DNA patents, LabCorp has also expressed interest in working with the company on its foetal DNA testing patents, being developed by GTG subsidiary RareCellect. Jacobson said that LabCorp had a three-month period to review the patents and associated technology for potential future application.

GTG has also granted licenses to Sequenom, Perlegen, Myriad Genetics and Pyrosequencing, among others.

GTG's shares were trading at AUD$0.51 at press time, up from $0.49 when the market opened this morning.