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.