PacBio Now Officially On Its Own Again, But Still Has Potential

The writing was on the wall for a while, and now Illumina (ILMN) and Pacific Biosciences (PACB) (“PacBio”) have bowed to the inevitable and terminated their merger agreement. Illumina will no longer attempt to acquire PacBio’s long-read sequencing capabilities and PacBio will have to go it alone, for now, and try to drive higher placements and usage of its new Sequel II system to reach a sustainable level of business.

For Illumina, this is no worse than a moderate setback in the short run, with the long-term consequences dependent on both how important long-read sequencing becomes in the market and what they can accomplish with their own internal R&D. For PacBio, this is clearly a serious challenge – the payments from Illumina will certainly help tide them over, but long-term viability, let alone success, are far from assured. Even so, there is some appeal here for more aggressive investors given PacBio's solid long-read technology and Illumina's tacit validation of that technology through the attempted acquisition.

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PacBio Now Officially On Its Own Again, But Still Has Potential