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PacBio Raises $109M in Series F Financing Round; Wins NHGRI Grant for Direct Transcriptome Sequencing

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By Julia Karow

This article was originally published July 14.

Pacific Biosciences said last week that it has raised $109 million in a Series F round of financing, bringing its total capital raised to date to approximately $370 million. Also, the company last month won a two-year grant from the National Human Genome Research Institute, worth $971,000 in fiscal year 2010, to develop direct transcriptome sequencing.

The latest financing round includes a previously announced $50 million strategic investment from Gen-Probe, which is collaborating with PacBio to develop integrated clinical diagnostics systems that use the firm's single-molecule real-time sequencing platform (IS 6/22/2010).

PacBio did not disclose the other investors in the round, but a spokeswoman said they include both previous and new investors. In prior financing rounds, the company received funding from Monsanto, the Wellcome Trust, Sutter Hill Ventures, Deerfield Management, Intel Capital, Morgan Stanley, Redmile Group, T. Rowe Price, Mohr Davidow Ventures, Kleiner Perkins Caufield and Byers, Alloy Ventures, Maverick Capital, AllianceBernstein, DAG Ventures, Teachers’ Private Capital, and Blackstone Cleantech Venture Partners.

The company will use the new funding to support its operations "as we begin ramping production capabilities for the commercial launch of our PacBio RS system," said Chairman and CEO Hugh Martin in a statement.

In February, the company named its first 10 early-access customers in North America and said that it would ship the first instruments before the end of June (IS 2/23/2010). The spokeswoman confirmed this week that PacBio has indeed started shipping instruments to early-access customers, although she did not say who has received one.

Later this year, PacBio plans early-access programs for Europe and Asia, and to launch its system commercially.

In preparation for the launch, the company recently added 60,000 square feet of office and manufacturing space at its Menlo Park location. The expansion includes new headquarters, an application lab and customer training center, and production-scale manufacturing facilities with two Class 100 clean rooms. In total, the company now occupies six buildings.

Last month, the company was also awarded a two-year grant from the NHGRI, worth $971,000 in fiscal year 2010 (IS 7/13/2010), to develop direct sequencing of RNA templates on its platform.

PacBio Chief Technology Officer Steve Turner showed proof-of-principle for direct RNA sequencing at a meeting last year (IS 9/22/2009), and said at the time that this application was expected to be available within a year of the commercial launch of the sequencing platform.

According to the grant abstract, company researchers plan to adapt sequencing protocols on the existing instrument to be able to use RNA-dependent polymerase. Thus, RNA would no longer be required to be converted into cDNA prior to sequencing, which creates biases. And because of PacBio's long read lengths — about 3 kilobases at the moment, and possibly up to 10 kilobases by the end of the grant in 2012 — it would be possible to sequence entire transcripts and to directly study alternative splice forms.

"These two abilities will improve the quality of the results, reduce the cost of studies that could be performed today, and enable studies that were previously impossible," according to the abstract.

The new grant follows a number of previous NIH awards to the company, including a two-year, $1.19-million NHGRI grant last year to develop direct DNA methylation sequencing and a $714,000 supplemental grant last year to continue development of its single-molecule real-time sequencing technology (IS 10/13/2009).

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