PacBio Secures $900 Million Investment to Support Gene Sequencing


Shares of Pacific Biosciences (PacBio) soared more than 21% in premarket trading after it was announced SB Management, a subsidiary of SoftBank Group Corp., will make an investment of $900 million into the company to support its gene sequencing research.

California-based PacBio's Chief Executive Officer Christian Henry said the SoftBank investment validates the company’s position in the long-read DNA sequencing market and will also enables the acceleration of its growth strategies. Henry said the financing will enable PacBio to expand its product portfolio and advance its commercial expansion.

SoftBank will purchase $900 million in Convertible Senior Notes at a price of $43.50 per share, which represents a 10% premium to the closing price on Feb. 9. In premarket trading, the stock has jumped to $47.90 per share.

Regarding the massive infusion of cash into PacBio, Akshay Naheta, CEO of SB Management, said Softbank believes the company’s sequencing technology will be the “de facto standard tool for population genomics fundamentally altering the practice of healthcare.” Naheta touted the leadership at PacBio and said Softbank is excited about partnering with the company as it aims to “build the most advanced genome sequencing platform in the world.”

PacBio’s long-read sequencing is based on the SMRT (Single Molecule, Real-Time) technology. The company said its technology offers the most comprehensive view of genomes, transcriptomes and epigenomes—including the full spectrum of genetic variation—by providing the longest average read lengths, highest consensus accuracy, and most uniform coverage of any sequencing technology currently available.

For PacBio, the SoftBank investment comes about a year after its merger with Illumina was called off. The $1.2 billion merger was initially announced in November of 2018, but was terminated in early 2020 due to a lengthy regulatory approval process and “continued uncertainty” of the outcome of the merger. As a result of the mutual decision to terminate the agreement, sequencing giant Illumina paid Pacific Biosciences a $98 million termination fee.

PacBio isn’t the only company to see a significant financial infusion. Virginia-based HemoShear Therapeutics raised $40 million in a Series A financing round. The funds will be used to complete a Phase IIa study of its lead compound, HST5040, for the treatment of methylmalonic acidemia (MMA) and propionic acidemia (PA), as well as fund future clinical studies and earlier stage programs.  

HST5040 is an investigational oral small molecule therapy designed to correct metabolic abnormalities associated with MMA and PA. The FDA granted HST5040 Orphan Drug, Fast Track and Rare Pediatric Disease designations to treat MMA and PA.

Suvretta Capital led the financing along with Janus Henderson Investors, Adage Capital Management LP and other private investors. 

Jim Powers, chairman and CEO of HemoShear was excited about the financing and support of its investors.

“We are excited to have attracted such an outstanding group of investors to support our progress in developing a new therapy for MMA and PA, two devastating diseases which currently have no pharmacological treatment options,” Powers said in a statement. “This financing will not only advance our treatment for MMA and PA, but also help us expand our pipeline of other programs for rare diseases with high unmet need.”

New York’s Sema4, an AI- and machine learning- driven patient-centered genomic and clinical data intelligence company, secured new funding by jumping on the SPAC bandwagon. Sema4 entered into a merger agreement with CM Life Sciences, a special purpose acquisitions company. Upon closing of the deal, CM Life Sciences will be renamed and its common stock will be listed on the Nasdaq exchange under a name and a ticker symbol to be announced at a later date.

The combined company is expected to receive proceeds of up to approximately $793 million at the closing of the transaction, up to $343 million of which will be paid to Sema4 stockholders and the remainder of which will be utilized by Sema4 in its business and will continue to operate under the Sema4 management team, led by Eric Schadt, founder and CEO.

Schadt called the SPAC deal a significant milestone for Sema4. He said the additional financial resources from the deal will allow the company to accelerate its business plans and bring in “in more cutting-edge precision model solutions across multiple disease areas.”

Sema4’s database includes more than 10 million patient genomic profiles and de-identified clinical records, integrated and delivered in a way that enables physicians to proactively diagnose and manage disease. The virtuous cycle of data helps improve decision making but also accelerates the development of next generation diagnostic tools and therapeutics.

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