Pacific Biosciences Unveils New Version Of Sequel Software

In a bid to make genomic research cost-effective,Pacific Biosciences of California, Inc. (NASDAQ:PACB) recently announced a new version of Sequel Software (V5.1) and a new polymerase.

Pacific Biosciences’ flagship platform — the Sequel System — has been fortifying the company’s footprint worldwide.With the latest development, the Sequel System can now achieve up to 10 Gb per Single Molecule, Real-Time (SMRT) Cell for genomic libraries, doubling the throughput when using ultra-long inserts (>40 kb) for de novo genome assembly.

These enhancements increase throughput and the overall performance of SMRT Sequencing for key applications. Notably, Pacific Biosciences has increased the throughput per SMRT Cell 1000-fold since the SMRT Sequencing technology was first commercialized in 2011. This throughput increases cost-effectiveness for sequencing projects in the human, plant and animal markets, enabling researchers to increase the size and scope of their projects.

Sequel System at a Glance

Sequel System is a nucleic acid sequencing platform based on SMRT technology that was developed in partnership with Roche. Though Pacific Bioscience’s agreement with Roche was terminated in 2016, the Sequel System is still a significant contributor to Pacific Bioscience’s top line.

We believe that the Sequel System’s higher throughput, scalability, lower upfront capital investment as well as smaller size and weight will attract cost-sensitive customers.

In the fourth quarter of 2017, consumable revenue growth was driven by higher sequel instrument utilization. The average annualized pull through revenues on sequel instruments was more than $180,000 and is nearing $200,000.

Recent Developments

In January 2018, Pacific Biosciences announced an agreement with BGI Genomics to purchase an additional 10 Sequel Systems. This will significantly expand the capacity for SMRT Sequencing for BGI’s global sequencing service business, which currently operates two Sequel Systems and a PacBio RS II Sequencing System.

In October 2017, Pacific Biosciences of California formed an alliance with genomic data-driven medicine company, Bluebee, to develop an advanced de novo assembly pipeline that integrates both the company’s technologies.

The company is alsocontinuing to work on the new version of the eight million ZMW SMRT Cell. The company has also expressed its plans to complete the developmental chip by the end of this year.

Notably, the company has received an order for 10 sequel systems from BGI in China, which is expected to further strengthen its foothold in the country.

Also, by the end of 2017, Pacific Biosciences confirmed that it is on track to perform beta testing on new enzyme and software for the Sequel Systems.

Industry Prospects

Per Markets And Markets, the global Genomics market is expected to grow at a CAGR of 10.2% to reach a worth of $23.88 Billion by 2022. Consequently, the prospects of long-read sequencing market, a niche space in the genomics industry, is also growing in leaps and bounds. We believe, Pacific Biosciences’ slew of latest developments to be well-timed within this industry.

Further, per a recent report by Decisive Bio-Insights, the Next Generation Sequencing manufacturer market size will reach $3.2 billion in 2017 and grow at 12% per annum rate to touch $4.6 billion by 2020, primarily driven by adoption from worldwide clinical customers.

Price Performance

Over the past month, the stock has gained than 9.9%, outperforming the industry’s gain of roughly 7.6%.

Zacks Rank & Key Picks

Pacific Biosciences has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical sector are PerkinElmer (NYSE:PKI) , Bio-Rad Laboratories (NYSE:BIO) and athenahealth, Inc. (NASDAQ:ATHN) .

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

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