Roche Collaborates with Bayer

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Roche’s (RHHBY), Ventana Medical Systems, Inc. has entered into a multi-year agreement with Bayer Pharma AG (BAYRY), thereby extending an existing collaboration between the two companies.

As per the agreement, Ventana will collaborate with Bayer to develop companion diagnostics, with a focus on immunohistochemistry (IHC), across the latter's portfolio of targeted therapy projects.

As per the new agreement, Ventana will form an expert team with resources exclusively assigned to Bayer projects. Ventana and Bayer will focus on the development of diagnostic tests for Bayer's biomarker targeted therapeutics starting from early discovery through commercialization.

The other financial terms of the agreement were not disclosed.

We remind investors that Roche is a leader in drugs for oncology, immunology, and infectious diseases. Apart from providing therapeutic products and services for diverse medical needs, Roche also focuses on innovative diagnostic solutions for the early detection and treatment of diseases.

The Diagnostics division generated sales of $10.5 billion in 2013, up 4% from a year ago. Roche has a broad portfolio of diagnostic tests with more than a hundred high-quality Elecsys assays for immune testing along with a new generation of fully automated cobas analyzers for improved medical decision making, scheduling and efficiency.

We note that Ventana has approximately 150 collaborative projects to develop and commercialize companion diagnostics globally. We are encouraged by Roche’s efforts to strengthen its Diagnostic division.

Roche currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Shire (SHPG) and Salix Pharmaceuticals (SLXP). Both carry a Zacks Rank #1 (Strong Buy).

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