Drug Royalty in deal with Nanogen

Canada's Drug Royalty Corp and US firm Nanogen have entered into an agreement for a trust managed by DRC to acquire an interest in royalties on the MGB (minor groove binder) technology owned by the latter for 5' nuclease real-time PCR applications in the biomedical research market.

Under terms of the agreement, between July 2006 and December 2011, DRC will be entitled to receive royalties up to a specified threshold, above which the parties will share royalties. DRC will make a one time payment of $20.0 million to Nanogen. Nanogen retains ownership of the MGB patents, as well as future royalties beyond 2011.

The royalty payments are related to Nanogen's patented MGB technology that has been licensed to Applied Biosystems) for use in its TaqMan products. Nanogen's MGB moiety provides many advantages in the design of oligonucleotides, such as allowing for the design of shorter probes with high sensitivity to mismatches, improving single nucleotide polymorphism detection, and allowing for multiplexing assays, the companies say.