Nasdaq-listed healthcare diagnostic company Gen-Probe has made its largest corporate venture-style investment by funding a $50m series F round for biotechnology company Pacific Biosciences.
Excluding the latest round, US-based Pacific raised additional, undisclosed money from its existing venture capital and strategic investors that have provided $261m in funding since its launch in 2004.
Gen-Probe’s investment comes with an exclusive collaboration for 30 months "with the goal of developing a longer-term, preferred business relationship aimed toward improving the diagnosis of human diseases," the companies said in a statement.
Pacific aims to speed up and lower the cost of reading the human genome while Gen-Probe provides diagnostic testing.
Carl Hull, Gen-Probe’s executive president, said: "Pacific Biosciences’ third-generation, single-molecule sequencing technology has the potential to play an important long-term role in strategically valuable, high-growth clinical diagnostics markets such as oncology, transplant diagnostics and pharmacogenomics due to its fast time to result, long read lengths, and ability to interrogate broad genomic regions in high resolution."
It is Gen-Probe’s largest public venture deal as the company’s 2009 annual report said it had previously invested $5.4m in Qualigen, $5m in DiagnoCure and $700,000 in Roka.
The deal follows an increase in cash at Gen-Probe, which said it was generating $10m of free cashflow each month to add to its $534.3m cash pile. The rest of corporate America is sitting on $1.84 trillion, up 26% from last year.
The latest funding comes after Pacific raised $68m in August, including strategic investments from crop company Monsanto, chip company Intel Capital and UK medical foundation Wellcome Trust. The company’s venture capital and asset management backers are Sutter Hill Ventures, Deerfield Management, Morgan Stanley, Redmile Group, T Rowe Price, Mohr Davidow Ventures, Kleiner Perkins Caufield and Byers, Alloy Ventures, Maverick Capital, AllianceBernstein, DAG Ventures, Teachers’ Private Capital and Blackstone Cleantech Venture Partners.