When Pacific Biosciences agreed to a buyout by Illumina almost three years in the past, the acquisition was pitched as pairing of firms with complementary DNA sequencing applied sciences. Antitrust regulators noticed in any other case, main the businesses to desert the deal. PacBio now has one other deal meant to span the spectrum of DNA sequencing, however this time it’s because the acquirer. The sequencing firm is paying $600 million to purchase Omniome.
Menlo Park, California-based PacBio makes a speciality of analyzing lengthy stretches of DNA. These so-called lengthy reads are extra susceptible to errors. PacBio has developed lengthy learn know-how that analyzes the identical DNA fragment repeatedly, which it says is meant to beat the random errors that may happen on every cross. Lengthy learn evaluation has functions in infectious illness, plant and animal well being, life science analysis, genetic screening.
Evaluation of quick stretches of DNA, or quick reads, has use in early-stage most cancers screening, monitoring for most cancers recurrence, and remedy choice. Quick reads are the kind of sequencing provided by Omniome and Illumina, each primarily based in San Diego. Omniome is creating a proprietary DNA sequencing platform meant to offer larger accuracy for its quick reads in comparison with typical sequencing applied sciences. Better accuracy will likely be a differentiator in oncology functions; what drives worth is the outcome, not the quantity of information generated, PacBio mentioned in an investor presentation.
Talking on an organization video, PacBio CEO Christian Henry mentioned that combining long-read know-how with Omniome’s short-read platform provides his firm a technique to deal with extra potential functions together with oncology, pathogen detection, and noninvasive prenatal screening.
“Finally, having two of essentially the most superior sequencing applied sciences will allow us to offer clients with the appropriate answer for his or her utility, whether or not the applying requires quick reads or lengthy reads,” he mentioned. “This can give clients extra alternative, larger flexibility, and can dramatically broaden our market alternative.”
The transaction is a mix of money and inventory: 9.4 million shares of publicly traded PacBio, plus $300 million in money. Omniome shareholders may obtain $200 million extra in money and inventory, tied to the achievement of unspecified milestones. The acquisition, after all, remains to be topic to the identical regulatory approvals that PacBio’s tie-up with Illumina wanted however didn’t win.
Although Illumina walked away from the proposed PacBio acquisition, it hasn’t given up on M&A. The corporate reached an settlement to accumulate most cancers detection startup Grail in final yr. However in March, the Federal Commerce Fee formally filed a criticism difficult the $7.1 billion buyout as anticompetitive. A trial is scheduled to start in late August.
The Omniome acquisition has been authorized by the boards of administrators of each firms. Approval of PacBio shareholders isn’t wanted. The deal is predicted to shut later within the present quarter. When it does, PacBio will stay headquartered within the Bay Space and it’ll additionally hold Omniome’s San Diego web site.
In reference to the Omniome acquisition, PacBio has reached an settlement to boost about $300 million by way of the personal sale of its inventory to sure traders. These events embody present traders within the firm, corresponding to Casdin Capital SB Northstar LP, a fund managed by SB Administration Restricted, a SoftBank Group Corp. subsidiary, and funds and accounts suggested by T. Rowe Worth Associates.
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