NEW YORK – Pacific Biosciences said on Tuesday that it has signed a definitive agreement to acquire Omniome, a short-read sequencing technology developer, for up to $800 million.
Under the terms of the agreement, PacBio will acquire Omniome for 9.4 million shares of its common stock and $300 million in cash, plus an additional $200 million in cash and stock that are contingent on certain milestones.
In connection with the proposed acquisition, PacBio entered into a definitive agreement to sell approximately 11.2 million shares of common stock in a private investment in public equity, or PIPE, financing at a price of $26.75 per share, for aggregate gross proceeds of approximately $300 million. The private placement is supported by existing investors, including Casdin Capital, SB Northstar, a fund controlled by SoftBank subsidiary SB Management, and funds and accounts advised by T. Rowe Price. It is subject to customary closing conditions, as well as the closing of the Omniome acquisition. Cowen serves as exclusive placement agent to PacBio.
The firm also reported preliminary second quarter revenues of $30.5 million, an increase of 78 percent year over year.
The Omniome deal, which has been unanimously approved by the boards of directors of both companies, is expected to close later this quarter, subject to customary closing conditions and regulatory approvals. Centerview Partners served as financial adviser to PacBio and Jefferies as financial adviser to Omniome.
"When the merger closes, we believe PacBio will be uniquely positioned as the only company with both highly accurate long-read and short-read sequencing platforms," PacBio said in a statement. "The integration of these complementary technologies will enable PacBio to dramatically expand its market opportunity for sequencing in novel ways, providing more value to customers across the broadest spectrum of applications."
"Adding Omniome’s short-read sequencing technology to our long-read portfolio will not only enable us to expand our total market opportunity, but we believe will also further accelerate the adoption of single-molecule real-time sequencing as we expect to reach more customers with a deeper product offering," PacBio CEO Christian Henry said in a statement. "We chose Omniome because of its novel approach, which we believe could result in the most accurate short-read sequencing platform to penetrate large, fast-growing clinical application areas in oncology, transcriptomics, metagenomics, and noninvasive prenatal testing."
Separately, PacBio also said it will expand its collaboration with Invitae to develop a production-scale HiFi sequencing platform to include technology developed by Omniome, though the partners are still working on the terms. The firms said they intend to leverage the new technology to advance cancer diagnostics and pathogen detection and will explore ways to integrate Omniome's sequencing-by-binding, or SBB, chemistry with PacBio's HiFi sequencing.
"By combining SBB with PacBio's HiFi sequencing, the opportunity and utility of next-generation sequencing technologies can be expanded for patients in the clinical setting with improvement in accuracy and reduction in costs," Sean George, Invitae's CEO and cofounder, said in a statement.
PacBio and Invitae have also partnered on NGS-based pediatric epilepsy testing.
San Diego-based Omniome has developed a short-read sequencing method. "We developed this chemistry because clinical applications require a level of accuracy that is difficult to achieve with current sequencing technologies," Omniome President Richard Shen said in a statement. "SBB has fundamental advantages over other technologies and the potential to deliver higher sensitivity at a lower cost to unlock new markets." The firm raised $60 million in a Series C financing in January 2020 and another $60 million in a 2018 Series B financing round.
In Tuesday morning trading on the Nasdaq, shares of PacBio were flat at $27.42.