Source – PacBio
Gene sequencing specialist PacBio has signed an agreement to acquire Apton Biosystems, a move that will enhance its position in short-read sequencing technology, a domain historically dominated by its rival Illumina.
The deal includes an initial payment of $85 million in the form of an all-stock transaction, with a potential total value of $110 million contingent on PacBio’s ability to generate $50 million in revenue by leveraging Apton’s technology platform.
Apton Biosystems, headquartered in California, has developed a high-throughput short-read sequencer technology designed to enable the sequencing of billions of clusters of DNA on a single flow cell.
PacBio’s core business revolves around long-read raw sequence data, involving the analysis of DNA sequences of 10,000 base pairs or more. This approach is known for facilitating easier genome data assembly and providing greater accuracy in detecting rare variations but has relatively lower throughput.
“I am impressed with Apton’s progress in developing a novel, high throughput sequencing platform that has the potential to deliver very low-cost sequencing at tremendous scale. By integrating our highly accurate SBB technology with Apton’s advanced optics and image processing capabilities, PacBio expects to commercialize a high throughput short-read platform faster than we had planned. This acquisition is consistent with our strategy to develop a multiproduct short-read sequencing portfolio alongside our long-read sequencing platforms, giving us an opportunity to reach an even greater portion of the multi-billion-dollar sequencing market.”
– Christian Henry, President and CEO of PacBio
On the other hand, Illumina, being the dominant player in the market, has traditionally focused on high-throughput short reads of up to 300 base pairs.
Both PacBio and Illumina have been making strategic moves to encroach on each other’s territories recently. While Illumina launched its own long-read Infinity technology last year, PacBio has developed its short-read chemistry, known as Sequencing by Binding (SBB), which will now be integrated with Apton’s sequencer device.
“At Apton, we’ve been relentlessly pursuing advances in both cost and throughput to address customer needs in the high throughput market. When PacBio announced its Onso benchtop sequencer, it expanded our imagination of what a high throughput sequencer can offer. We knew that if we could complement our advances in optics with best-in-class chemistry like SBB, we could have the potential to develop a truly differentiated high throughput short-read sequencer, the likes of which hasn’t been seen before.”
– John Hanna, CEO of Apton
In addition, PacBio announced during its second-quarter results update that it has commenced the rollout of a new short-read sequencing benchtop instrument named Onso, which will leverage SBB technology. The company acquired this instrument through its $316 million purchase of Omniome in 2021.
With the acquisition of Apton, PacBio’s Chief Executive Officer, Christian Henry, expects to expedite the launch of a high-throughput short-read platform beyond their initial plans. Apton’s technology will be instrumental in developing the high-throughput version of Onso.
Notably, in 2019, Illumina made an attempt to acquire PacBio in a deal worth $1.2 billion but abandoned the plan when it became evident that it would face challenges with antitrust regulators in the US and overseas.
The agreement with Apton comes as PacBio reported a 34% increase in second-quarter revenues, reaching nearly $47 million. The company posted an operating loss of $73 million and holds cash reserves of approximately $830 million.
