Pacific Biosciences Secures 900 Million Investment to Advance Gene Sequencing

Pacific Biosciences, headquartered in California, is a pioneer in the field of delivering high quality, long-read sequencing platforms. The company recently announced that it had received $900 million in investment to foster growth initiatives from SB Management, a subsidiary of Softbank Group Corporation.

Christian Henry, President and Chief Executive Officer of Pacific Biosciences, said, “This strategic investment by SoftBank validates our leadership position in the long-read DNA sequencing market and enables us to further accelerate our growth strategies. Currently, we offer one of the most accurate and complete sequencing solutions on the market, and this financing will enable us to continue to expand our product portfolio and advance our commercial expansion as we seek to transform the field of genomics.”

The deal comes just a year after sequencing giant Illumina bid $1.2 billion on Pacific Biosciences, which fell through due to federal scrutiny. While Pacific Biosciences processes longer DNA strands resulting in a higher error rate, Illumina’s proprietary software enables them to break up the DNA into shorter sequences and reassemble the code later, offering better precision. Illumina had hoped to conquer the best of both worlds but unfortunately exited the deal by paying Pacific Biosciences $98 million for all its troubles.

The terms of the investment state that SB Management will buy Pacific Bioscience’s shares for $900 million in Convertible Senior Notes due 2028. The initial price of the shares will be $43.50 per share of the company’s common stock while being subjected to anti-dilution and other market-related adjustments. Maturity of the notes will take place on February 15, 2028, unless they are repurchased, redeemed, or converted.

Akshay Naheta, Chief Executive Officer, SB Management, added, “We believe that PacBio’s HiFi sequencing will be the de facto standard tool for population genomics fundamentally altering the practice of healthcare. Christian has assembled a world-class management team to commercialize market-leading sequencing technologies and to prepare population-scale healthcare systems for a future in precision medicine. We look forward to partnering with the Company in its efforts to build the most advanced genome sequencing platform in the world.”

Market analysts estimate that long-read applications in genetic research would approximately grow to $2.5 billion by the year 2022. If that is indeed the case, it will be very interesting to see how Illumina, Pacific Biosciences, among others, capture market share.

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Author

Tulip Chakraborty