US-based contract research organisation (CRO) Covance has signed a definitive agreement with Merck & Co for the supply of genomic analysis services. Part of the deal is that Covance will acquire Merck’s Gene Expression Laboratory in Seattle, US.

In addition, Merck has committed to a five-year, US$145 million contract to purchase genomic analysis services from Covance – effectively outsourcing these activities to a preferred supplier. Merck said the agreement ensured “continued access to these services for our researchers while securing a future for the [Seattle] facility as an integral part of a world-leading drug development service provider”.

Covance expects top offer jobs to “the majority” of the existing workforce at the Gene Expression Laboratory. The CRO is scheduled to take over the site and its operations on 17 August 2009. The laboratory performs genomics services such as genotyping, gene sequencing and gene expression profiling.

According to Covance, the acquisition should make it the largest genomics service provider in the world. It brings “world-class talent and technologies to Covance and further expands our capabilities in genomics testing and personalised medicine”, commented chairman and chief executive office Joe Herring.

"We recognised the need to expand our footprint in the important and growing genomics testing market and this transaction provided both a superior and quicker entry point than the build or buy options we considered,” he added.

The genomics market is estimated at several hundred million dollars a year, including services for discovery/preclinical and clinical trial support, Covance noted.