PACB Pacific Biosciences of California Inc

On December 12, 2016, Pacific Biosciences of California, Inc. (the “Company”) received notice from F. Hoffman-La Roche Ltd (“Roche”) that Roche has elected to terminate for convenience the Development, Commercialization and License Agreement dated September 24, 2013 (the “Agreement”) between the Company and Roche. The termination will become effective February 10, 2017, 60 days after the date of the notice in accordance with the terms of the Agreement.

Pursuant to the Agreement, the Company: (i) had been developing diagnostic products for clinical use including sequencing systems and consumables based on the Company’s proprietary Single Molecule, Real-Time (SMRT ^® ) technology; (ii) had agreed to grant to Roche an exclusive right to commercialize, and an exclusive license to sell, the developed diagnostic products for clinical use, the exclusivity of which was contingent on achieving sales minimums to be established in the future and contingent on Roche not selling for clinical use any new sequencing instrument that competes with any diagnostic instrument system developed under the Agreement; and (iii) had agreed to manufacture and supply certain products intended for clinical use as the exclusive supplier to Roche. The Company previously achieved all of the development milestones described in the Agreement and received an aggregate of $75 million from Roche pursuant to the Agreement, comprised of a non-refundable up-front payment of $35 million and an additional $40 million for achievement of the development milestones. Certain provisions of the Agreement, including confidentiality provisions, non-exclusive licenses to certain intellectual property, indemnification provisions, and dispute resolution provisions expressly survive termination in accordance with the terms of the Agreement.

The Agreement was filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 12, 2013, and is incorporated by reference herein.