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Investing in Pacific Biosciences of California, Inc (NASDAQ:PACB)

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Investing in Pacific Biosciences of California, Inc (NASDAQ:PACB)

Pacific Biosciences of California, Inc (NASDAQ: PACB ) is a biotechnology company that produces DNA sequencing technology for use in a variety of scientific research purposes. Using Pacific Bioscience of California machines, scientists in laboratories around the world are able to rapidly and accurately observe DNA in real-time, allowing for access to a full spectrum of genetic information that was never before been available. As a relatively young company, their hardware and software developments have already led to several significant scientific advancements and as a result, Pacific Biosciences of California has become one of the most well-known names in the biotechnology space.

What is Pacific Biosciences of California, Inc (PACB)?

Based in Silicon Valley, Pacific Biosciences of California, Inc. (PacBio) is a biotechnology company that focuses on creating products and technologies that are used to advance genetic research. The company was founded by Dr. Stephen Turner in 2004 under the name Nanofluidics, Inc. before being renamed a few years later. After only a few short decades, the company has expanded to over 400 employees and boasts a wide range of products including sequencing machines, analytical software, and “consumables”, which are chemicals used in the process of converting DNA into a format that is ready to be read by sequencing machines.

The company operates in three main niches: plant and animal science, human biomedical research, and microbiology and infectious diseases. Using PacBio machines, plant and animal science research can be conducted on organisms as small as mosquitos that contain as little as 5 nanograms of DNA. Through the study of plant and animal genetics, PacBio’s technology fuels research that has been used to explore innovative ways of improving food and energy supply. Within the human biomedical science sector, research using PacBio products and services allows for the exploration of genetic variations to determine potential hidden hereditary causes of diseases. By being able to pinpoint epigenetic changes, the specific genetic variation that is behind diseases will be easier to understand. As this technology becomes more widely available due to lower costs, doctors will be able to improve the “solve rate” involved with diagnosing patients. Finally, PacBio machines are relied upon heavily for microbial and infectious diseases research, which has led to breakthroughs in finding cures and vaccines for a variety of viruses, bacteria, and other microbiotic organisms.

Why does Pacific Biosciences of California, Inc (PACB) Matter?

The company is well known for developing innovative technology to study DNA, RNA, and protein synthesis and regulation. In 2011, Pacific of California released its first product, PacBio RS, a DNA sequencing machine, into the market. The PacBio RS was the first machine that used Single-Molecule Real-Time (SMRT) sequencing technology. SMRT is a sequencing technology developed by PacBio that allows scientists to understand the inner workings of biological systems through real-time observation. The SMRT technology has the ability to sequence whole genomes or target specific sections of DNA/RNA. The technology also allows complex populations of bacteria, viruses, and other diseases to be tracked and responses to drug treatments to be observed.  The two main advantages of PacBio’s SMRT sequencing machines over competitors are their low per-genome costs and high volume output. Upon the launch of their first product the PacBio RS, SMRT sequencing had the ability to read 1,110 bases, which are the smallest units of DNA. This technology underwent further innovation throughout the years, and the latest iteration, named the Sequel II system, now has the ability to read upwards of 500 million bases. For these advancements, PacBio and their Sequel II machine received an award from The Scientist for Top 10 Innovations in 2019.

These developments have made present-day DNA reading much faster and more cost-effective than any of its predecessors. The newest systems developed by PacBio also have reading accurate rates of over 99.9% accuracy, which is important to ensure trust and validity within the scientific community. Due to these benefits, this machine has become the first choice of scientists who seek highly accurate readings of large portions of DNA and other genetic material.

Pacific Biosciences of California, Inc (PACB) Prospects

As genetic sequencing becomes more and more affordable, new uses for the technology are being discovered every day. PacBio estimates that 10 million human genetic sequences will be conducted annually by 2025 and that one day, the technology will become a routine part of healthcare. With trusted and reliable hardware and software, PacBio is well-positioned to continue its domination in terms of market share and remains a well-regarded partner for companies around the world.

The SMRT sequencing technology developed by PacBio is one of the best in the industry and has garnered interest from competitors. Illumina, another leader in the biotechnology sector, made a move to buy the company for $1.2 billion in 2018. The deal ultimately fell through, with both companies citing the lengthy regulatory approval process as the main reason for mutually agreeing to terminate the contract. Despite this, the interest from other companies shows the attractiveness of SMRT sequencing technology and the complementary role it could play for other emerging biotechnology innovations.

Where to Buy Pacific Biosciences of California, Inc (PACB)?

A broker that we recommend is Firstrade.

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Summary

As a company that has only been in existence for under two decades, the innovations made possible by the SMRT sequencing technology developed by PacBio have already had a lasting impact on the scientific community. As costs continue to drop, DNA sequencing has the potential to become a mainstream part of everyday healthcare. The potential market reach of this technology is nearly limitless. As a leader in the space, Pacific Biosciences of California is very well positioned to take advantage of the very promising future growth in the industry.

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Baggio has been an investor in the technology space for over half a decade. He uses the perspectives gained from his work experience in the private, public, and non-profit sectors to guide his investment strategy, with a specific interest in the potential of emerging disruptive technologies.

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