Gen-Probe to invest up to 25% of revenues in R&D this year

By Jennifer Lanning Drey

Portland, Ore., Nov. 7 - Gen-Probe, Inc. plans to invest 24% to 25% of its total revenues in research and development this year, Herm Rosenman, Gen-Probe's chief financial officer, said Tuesday at the Cowen and Co. 7th Annual Global Health Care Conference.

Rosenman also said the company has identified new market opportunities for its assays and diagnostic testing technologies in prostate cancer, human papilloma virus (HPV) and industrial microbiology that will drive growth through 2010.

"We expect to continue to invest heavily in R&D because we have an enormous pipeline," Rosenman said.

During his presentation at the conference, Rosenman highlighted a worldwide exclusive collaboration agreement that Gen-Probe has put in place with GE Infrastructure, Water & Process Technologies to develop, manufacture and commercialize nucleic acid testing technologies to detect unique genetic sequences in selective water applications.

Under the agreement, Gen-Probe is primarily responsible for development and manufacturing, and GE will pay the company transfer prices for the products. Gen-Probe expects the collaboration to begin contributing to growth in 2007 and 2008, Rosenman said.

Rosenman also highlighted a second collaboration that Gen-Probe has with Millipore Corp. to develop, manufacture and commercialize nucleic acid testing products for rapid microbiological and virus monitoring in the biotech and pharmaceutical industries.

Gen-Probe expects to begin receiving commercial revenues from the collaboration in 2007, he said.

As an additional growth driver, Gen-Probe is developing the Aptima HPV assay to detect 14 high-risk HPV subtypes. The assay is expected to contribute to the company's growth in 2009 and 2010, Rosenman said.

Gen-Probe is also advancing diagnostic testing for prostate cancer, which is expected to become a growth driver during the same timeframe, he said.

San Diego-based Gen-Probe develops nucleic acid tests used to diagnose human diseases and screen donated blood.

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