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Johnson & Johnson, Veracyte collaborate to develop lung cancer detection tests

Johnson & Johnson and Veracyte Inc. have formed a collaboration valued at $50 million to develop and commercialize diagnostic tests to detect lung cancer at an early stage.

South San Francisco, Calif.-based Veracyte and Johnson & Johnson's unit Johnson & Johnson Innovation LLC, along with the Lung Cancer Initiative of the New Brunswick, N.J.-based pharmaceutical giant, will combine clinical data from 5,000 patients to develop the tests for early detection of lung cancer. The disease causes more than 154,000 deaths in the U.S. each year, Veracyte said in a Jan. 3 press release.

The collaboration will advance Veracyte's two lung cancer programs: the first non-invasive nasal swab test for early lung cancer detection, and the commercialization of its Percepta classifier based on the company's ribonucleic acid sequencing platform, which will be launched in the first half of the year.

Under the agreement, Veracyte will receive $5 million in an upfront fee and $15 million in development and milestone payments.

Veracyte's chairman and CEO, Bonnie Anderson, placed the value of the collaboration for her company at more than $50 million. The company expects its biopharmaceutical service revenue for 2019 to increase by about $5 million as a result of the transaction.