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Shares of MGI Tech rose against the market trend following the announcement that the Chinese provider of gene sequencing equipment has granted Swiss Rockets exclusive rights to its CoolMPS gene sequencing technology for regional markets, in exchange for $120 million USD.
As of midday trading in Shanghai, MGI’s stock was up 4%, reaching CNY71.64 (approximately $10.04 USD), after earlier surging by as much as 9%. Meanwhile, the Shanghai Composite Index and the Star 50 Index declined by 1.3% and 0.4%, respectively, amid concerns over escalating trade tensions between the U.S. and China.
Two subsidiaries of MGI signed a licensing agreement with Swiss Rockets, granting it exclusive patent rights for CoolMPS sequencing technology and related products outside Asia-Pacific and China. The Shenzhen-based company announced that this deal would enable MGI to monetize CoolMPS without further investment in R&D and product marketing, providing immediate profits and a steady stream of long-term cash flow. This strategic move will also allow MGI to focus resources on developing other core technologies like StandardMPS and expanding into other key markets.
Under the agreement, Swiss Rockets will acquire exclusive rights to patents, technical know-how, and trademarks related to CoolMPS, as well as a non-exclusive license for the broader sequencing technology within the specified regions. The deal provides Swiss Rockets the opportunity to expand the license globally at a mutually agreed price by the end of next year.
The licensing arrangement includes a one-time non-refundable payment of $20 million USD, milestone payments totaling $20 million USD, and royalties based on net sales of the licensed products and technologies, with a minimum total of $120 million USD over the course of the agreement.
The subsidiaries will handle technology transfer, product R&D, and technical support for CoolMPS, while Swiss Rockets will focus on the development and marketing of CoolMPS sequencing products.
CoolMPS stands out as one of MGI’s high-throughput sequencing solutions. Compared to traditional fluorescent direct-labeled nucleotide technology, CoolMPS offers improved sequencing accuracy and longer read lengths.
Swiss Rockets, headquartered in Basel, specializes in oncology and infectious disease research. The company received strategic investment from New York-listed Emergent BioSolutions earlier this year and aims to advance the clinical development and commercialization of biopharmaceuticals.
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