A Medical Device Daily

Celera (Alameda, California) and Abbott Laboratories (Abbott Park, Illinois) reported a revision of the strategic alliance agreement between the companies.

Under a new distribution agreement, Abbott will exclusively distribute certain molecular diagnostic products manufactured by Celera. Under a second agreement, Celera will receive royalties on the sale of m2000 reagents, instruments, service and related consumables, and Abbott will receive royalties on certain Celera genetic tests.

The companies also will pay each other royalties on any newly developed products for the m2000 instrument.

The agreements were effective as of Oct. 1, and replace the existing profit-sharing arrangement between the companies, which began in June 2002 and was restated in January 2006.

The new distribution agreement has an initial term of five years, with the potential for two consecutive two-year renewal periods thereafter. The new royalty agreement expires in September 2017. Additional financial terms were not disclosed.

The agreements have been structured to capture the equal sharing of value between the companies in the Celera/Abbott strategic alliance agreement and provide more flexibility for Celera and Abbott to develop and commercialize products than existed under the alliance.

Under the new agreements, the companies will no longer share R&D and SG&A expenses as provided in the alliance relationship. The impact of these changes will continue to be reflected in the financial performance in Celera's Products Business segment.

"We've been pleased with our relationship with Abbott as we've built a successful market position in molecular diagnostics over the past six years," said Kathy Ordoñez, CEO of Celera. "Moreover, we believe the new arrangements will provide greater financial clarity for Celera's investors."