SAN DIEGO, Jan. 20 /PRNewswire-FirstCall/ -- Gen-Probe announced today that bioMerieux has exercised an option to develop diagnostic products for certain undisclosed disease targets using Gen-Probe's patented ribosomal RNA technologies, pursuant to terms of an agreement first disclosed on October 6, 2004.
In exchange for these rights, bioMerieux has paid Gen-Probe a $4.5 million license fee. bioMerieux also retains options to develop diagnostic products for other disease targets by paying Gen-Probe up to an additional $3 million by the end of 2006.
Gen-Probe will record $1.9 million of the $4.5 million payment as license revenue in the first quarter of 2005, since accounting rules require that revenue be recognized based on the total number of targets eventually selected. The amount and timing of additional revenue that Gen-Probe records will depend on the number of additional targets, if any, selected by bioMerieux. Gen-Probe also will receive royalties on the sale of products developed using the Company's intellectual property.
As previously disclosed, Gen-Probe expects license fees from bioMerieux to comprise more than half of the Company's total 2005 royalty and license revenue of between $6 million and $7 million.
Gen-Probe Incorporated is a global leader in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid tests for diagnosing human diseases and screening donated human blood. Using its patented technologies, Gen-Probe has received FDA approvals or clearances for a broad portfolio of products that detect a variety of infectious microorganisms, including those causing sexually transmitted diseases, tuberculosis, strep throat, pneumonia and fungal infections. In addition, Gen-Probe's TIGRIS(R) instrument is the only fully automated, high-throughput system in the molecular diagnostics industry. The Company also developed and manufactures the only FDA-approved blood screening assay for the simultaneous detection of HIV-1 and HCV, which is marketed by Chiron Corporation. Gen-Probe has more than 20 years of nucleic acid detection research and product development experience, and its products are used daily in clinical laboratories and blood collection centers throughout the world. Gen-Probe is headquartered in San Diego, California and employs approximately 900 people. For more information, go to http://www.gen-probe.com/.
Caution Regarding Forward-Looking Statements
Any statements in this press release about our expectations, beliefs, plans, objectives, assumptions, future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "believe," "will," "expect," "anticipate," "estimate," "intend," "plan," and "would." For example, statements concerning the receipt of license fees and royalties, future development, and accounting treatment are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by any forward-looking statement. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections in the forward-looking statement include, but are not limited to: (i) the risk that bioMerieux may not exercise any additional options, (ii) the risk that bioMerieux may not successfully develop products using our technology, (iii) the risk that the markets for any products developed by bioMerieux will not grow as expected, and (iv) the risk that we may not be able to maintain our current corporate collaborations, including with bioMerieux, or enter into new ones. For additional information about risks and uncertainties we face and a discussion of our financial statements and footnotes, see documents we have filed with the SEC, including our Report on Form 10-Q for the fiscal quarter ended September 30, 2004 and all our periodic filings made with the SEC. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this news release or to reflect the occurrence of subsequent events.
Sr. director, investor relations and