PacBio’s $600 million Omniome acquisition brings together long and short DNA sequencing

Nearly three years ago, when Pacific Biosciences agreed to be acquired by Illumina, the acquisition was positioned as a pair of companies with complementary DNA sequencing technologies. Antitrust regulators believe that this is not the case, causing these companies to abandon the deal. PacBio now has another deal that aims to span the scope of DNA sequencing, but this time it is as an acquirer.The sequencing company is Acquired Omniome for US$600 million.

PacBio, located in Menlo Park, California, specializes in analyzing long fragments of DNA. These so-called long reads are more error-prone. PacBio has developed a long-read technology that allows repeated analysis of the same DNA fragments. It is said that the technology is designed to overcome random errors that may occur during each pass. Long-read analysis has applications in infectious diseases, animal and plant health, life science research, genetic screening and other fields.

Analysis of short DNA fragments or short read lengths has been used for early cancer screening, cancer recurrence monitoring, and treatment selection. Short read length is the type of sequencing provided by Omniome and Illumina, both of which are located in San Diego. Omniome is developing a proprietary DNA sequencing platform designed to provide higher accuracy than traditional sequencing technologies for its short read lengths.Higher accuracy will become a differentiating factor for oncology applications; PacBio said in a statement that it is the results that drive value, not the amount of data generated Investor introduction.

In the company video, PacBio CEO Christian Henry said that combining long-reading technology with Omniome’s short-reading platform enables his company to address more potential applications, including oncology, pathogen detection, and non-invasive prenatal screening.

“Ultimately, having two state-of-the-art sequencing technologies will enable us to provide customers with solutions suitable for their applications, whether the application requires short or long reads,” he said. “This will provide customers with more choices, greater flexibility, and will greatly expand our market opportunities.”

The transaction is a combination of cash and stock: 9.4 million publicly traded PacBio shares, plus $300 million in cash. Omniome’s shareholders can receive $200 million in cash and stock, which is related to the achievement of unspecified milestones.Of course, this acquisition still requires the same regulatory approvals required for the cooperation between PacBio and Illumina, but Didn’t win.

Although Illumina abandoned the proposed PacBio acquisition, it did not abandon the acquisition.The company reached an agreement Acquired cancer detection startup Grail last year. But in March, The Federal Trade Commission formally filed a lawsuit, questioning that the $7.1 billion acquisition is anti-competitiveThe trial is scheduled to begin at the end of August.

Omniome’s acquisition has been approved by the boards of directors of the two companies. No approval from PacBio shareholders is required. The transaction is expected to be completed later this quarter. At that time, PacBio’s headquarters will still be located in the Bay Area, and Omniome’s San Diego site will also be retained.

With regard to the Omniome acquisition, PacBio has reached an agreement to raise approximately US$300 million by privately selling its shares to certain investors. These parties include the company’s existing investors, such as Casdin Capital SB Northstar LP, funds managed by SoftBank Group subsidiary SB Management Limited, and funds and accounts advised by T. Rowe Price Associates.

Image: 4X image, Getty Images

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