Menlo Park’s sequencing company Pacific Biosciences on Tuesday announced plans to purchase San Diego Omniome biotechnology for up to $ 800 million.
The Bay Area company boasts that the deal will make it the only company with the tools to read both long and short DNA segments, allowing it to do everything from discovering rare genetic diseases to screening more. early cancer. This would push the company further in competition with San Diego sequencing giant Illumina, which unsuccessfully attempted to buy PacBio for $ 1.2 billion in 2018.
PacBio will pay Omniome $ 600 million up front, split equally between cash and stocks, with an additional $ 200 million if the startup team can bring their sequencing technology to market. The deal is expected to close in late August or early September, according to Mark Van Oene, chief operating officer of PacBio.
“This will allow us to fully meet all the clinical needs of the market,” said Van Oene. “This is the exciting part.”
DNA is the book of life, and there is a lot we can learn from reading it, from tracking the spread of coronavirus variants, to discovering the course of life, to choosing which drugs to give a patient. .
PacBio’s approach has been to read DNA in large chunks. This allows scientists to spot places where there are extra copies of a DNA segment, or where a segment has moved to a new part of the genome – changes often seen in cancer cells and in patients. with genetic diseases.
But if you’re looking for rare mutations in individual places in the genome, fast short-bit sequencing is a better way to go, says Van Oene. And that’s where Omniome, founded in 2013, comes in. The company has refined its approach to be more efficient and accurate than other DNA short read approaches, like Illumina’s, according to Richard Shen, president of Omniome, whose experience includes a 16-year at Illumina. A 2018 report submitted by the company’s founders to the American Chemical Society says its technology works by detecting the binding of a DNA fragment to a metal surface, which generates distinct electrical signals depending on the sequence. .
Shen says that while Omnione has been successful in developing and refining its sequencing technology, PacBio has the resources to make it easier for customers to interpret sequencing data and that the Bay Area company is already set up to sell, take into account. charge and install sequencing equipment.
Acquisition is a kind of reunion. At Illumina, Shen worked for a team led by Christian Henry, who is now the CEO of PacBio.
Closing the deal by September will depend in part on whether the Federal Trade Commission believes the acquisition is anti-competitive, which is the position the agency has taken against the $ 7.1 billion offer. Illumina to buy cancer diagnostics company Grail Therapeutics. Van Oene doesn’t think the FTC is likely to step in, noting that PacBio is a much smaller company than Illumina and is looking to acquire biotech that does not yet have a product on the market.
“We’re in a very different market from Illumina when they tried to buy PacBio,” he said. “We believe that over time this will create some competition in the market, which we believe is what the FTC is responsible for accomplishing.”
Omniome employs approximately 120 people in the Sorrento Valley, all of whom will be able to stay after the acquisition. Shen and Van Oene expect the Omniome team to grow.