Il­lu­mi­na forks out $1.2B to buy ri­val Pa­cif­ic Bio­sciences, plac­ing long and short-read DNA tech un­der the same roof

Il­lu­mi­na $ILMN is con­sol­i­dat­ing its pole po­si­tion in the gene se­quenc­ing mar­ket by ac­quir­ing small­er ri­val Pa­cif­ic Bio­sciences $PACB in a $1.2 bil­lion all cash deal, the com­pa­nies said on Thurs­day.

Fran­cis deS­ouza

Al­though Il­lu­mi­na is pay­ing a 70% pre­mi­um, it’s less than half the share price at PacBio’s 2009 IPO, which raised $200 mil­lion on the promise of its long-read tech­nol­o­gy as a bet­ter, more ac­cu­rate plat­form for se­quenc­ing DNA than the short-read method em­ployed by Il­lu­mi­na.

As the sto­ry goes in the nine years since, Il­lu­mi­na be­came the $46 bil­lion be­he­moth it is to­day, while PacBio stum­bled and re­quired a res­cue ef­fort by new lead­er­ship — even­tu­al­ly find­ing a niche for its tech­nol­o­gy among a se­lect group of re­searchers whose work­flow isn’t well suit­ed to Il­lu­mi­na tech­nol­o­gy, such as high-qual­i­ty genomes of small or­gan­isms like bac­te­ria, or in di­ag­nos­ing rare hered­i­tary dis­eases with com­plex ge­nom­ic sig­na­tures, al­low­ing for re­arrange­ments to be more eas­i­ly re­vealed. Il­lu­mi­na’s CEO Fran­cis deS­ouza ad­mit­ted as much to Matthew Her­p­er of Forbes:  “The place where PacBio re­al­ly dif­fer­en­ti­ates it­self is ac­cu­ra­cy … [the] ac­cu­ra­cy pro­file is re­al­ly bet­ter than any­thing else in the [long-read] mar­ket.”

Il­lu­mi­na un­veiled its No­vaSeq plat­form last year that is de­signed to en­able the cost of se­quenc­ing the hu­man genome down to $100. The pre­vi­ous it­er­a­tion, HiSeq X, en­abled the $1,000 genome. It took over a decade and near­ly $3 bil­lion for sci­en­tists to se­quence the first hu­man genome back in 2003.

“Though the ma­jor­i­ty of the se­quenc­ing mar­ket cen­ters around the short-read tech­nol­o­gy from Il­lu­mi­na – which is both fast and eco­nom­i­cal, the long-read tech­nol­o­gy caters to more ac­cu­ra­cy, re­frac­to­ry/re­peat ge­nom­ic re­gions, and struc­tur­al ge­nomics ap­pli­ca­tions – at a slow­er speed and high­er price tag”, wrote Leerink’s Puneet Sou­da in a note on Fri­day, adding that Il­lu­mi­na will like­ly find a way to ap­ply its low-cost mod­el to cut the cost of long-read se­quenc­ing in the longer term.

The ac­qui­si­tion plugs an im­por­tant gap in Il­lu­mi­na’s port­fo­lio, ex­pands the com­pa­ny’s over­all mar­ket op­por­tu­ni­ty and po­si­tions them against com­pet­i­tive over­hangs from UK-based Ox­ford Nanopore and oth­ers, Sou­da added. “The ac­qui­si­tion opens a door to new mar­kets not re­al­ized yet as long-read tech­nol­o­gy fol­lows a path of elas­tic­i­ty of de­mand and cost per Gb (Gi­ga­base) re­duc­tion, with po­ten­tial for an ‘in­te­grat­ed sys­tem’ down the road that could fea­ture both tech­nolo­gies.”

Un­like the many bulky de­vices sold by Il­lu­mi­na and Pa­cif­ic Bio, Ox­ford Nanopore’s tech­nol­o­gy is scal­able, rang­ing from bench-top de­vices to USB sticks. Il­lu­mi­na orig­i­nal­ly in­vest­ed in the UK-based com­pa­ny hav­ing joined a cou­ple of fund­ing rounds, but in 2016 the San Diego, Cal­i­for­nia-based gi­ant sued Ox­ford Nanopore for patent in­fringe­ment.

Mean­while, the CTO of Ox­ford Nanopore, Clive Brown, is al­ready adding fu­el to the fire.

Aerial view of Genentech's campus in South San Francisco [Credit: Getty]

Genen­tech sub­mits a big plan to ex­pand its South San Fran­cis­co foot­print

The sign is still there, a quaint reminder of whitewashed concrete not 5 miles from Genentech’s sprawling, chrome-and-glass campus: South Francisco The Industrial City. 

The city keeps the old sign, first erected in 1923, as a tourist site and a kind of civic memento to the days it packed meat, milled lumber and burned enough steel to earn the moniker “Smokestack of the Peninsula.” But the real indication of where you are and how much has changed both in San Francisco and in the global economy since a couple researchers and investors rented out an empty warehouse 40 years ago comes in a far smaller blue sign, resembling a Rotary Club post, off the highway: South San Francisco, The Birthplace of Biotech.

Here comes the oral GLP-1 drug for di­a­betes — but No­vo Nordisk is­n't dis­clos­ing Ry­bel­sus price just yet

Novo Nordisk’s priority review voucher on oral semaglutide has paid off. The FDA approval for the GLP-1 drug hit late Friday morning, around six months after the NDA filing.

Rybelsus will be the first GLP-1 pill to enter the type 2 diabetes market — a compelling offering that analysts have pegged as a blockbuster drug with sales estimates ranging from $2 billion to $5 billion.

Ozempic, the once-weekly injectable formulation of semaglutide, brought in around $552 million (DKK 3.75 billion) in the first half of 2019.

As Nas­daq en­rolls the fi­nal batch of 2019 IPOs, how have the num­bers com­pared to past years?

IGM Biosciences’ upsized IPO haul, coming after SpringWorks’ sizable public debut, has revved up some momentum for the last rush of biotech IPOs in 2019.

With 39 new listings on the books and roughly two more months to go before winding down, Nasdaq’s head of healthcare listings Jordan Saxe sees the exchange marking 50 to 60 biopharma IPOs for the year.

“December 15 is usually the last possible day that companies will price,” he said, as companies get ready for business talks at the annual JP Morgan Healthcare Conference in January.

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Oxitec biologist releases genetically modified mosquitoes in Piracicaba, Brazil in 2016 [credit: Getty Images]

In­trex­on unit push­es back against claims its GM mos­qui­toes are mak­ing dis­ease-friend­ly mu­tants

When the hysteria of Zika transmission sprang into the American zeitgeist a few years ago, UK-based Oxitec was already field-testing its male Aedes aegypti mosquito, crafted to possess a gene engineered to obliterate its progeny long before maturation.

But when a group of independent scientists evaluated the impact of the release of these genetically-modified mosquitoes in a trial conducted by Oxitec in Brazil between 2013 and 2015, they found that some of the offspring had managed to survive — prompting them to speculate what impact the survivors could have on disease transmission and/or insecticide resistance.

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Pur­due threat­ens to walk away from set­tle­ment, asks to pay em­ploy­ees mil­lions in bonus­es

There are two updates on the lawsuit against Purdue Pharma over its role in fueling the opioid epidemic, as the Sackler family threatens to walk away from their pledge to pay out $3 billion if a bankruptcy judge does not stop outstanding state lawsuits against them. At the same time, the company has asked permission to pay millions in bonuses to select employees.

Purdue filed for chapter 11 bankruptcy this week as part of its signed resolution to over 2,000 lawsuits. The deal would see the Sackler family that owns Purdue give $3 billion from their personal wealth and the company turned into a trust committed to curbing and reversing overdoses.

While No­var­tis ban­ish­es Zol­gens­ma scan­dal scars — Bio­gen goes on a Spin­raza 'of­fen­sive'

While Novartis painstakingly works to mop up the stench of the data manipulation scandal associated with its expensive gene therapy for spinal muscular atrophy (SMA) Zolgensma— rival Biogen is attempting to expand the use of its SMA therapy, Spinraza. 

The US drugmaker $BIIB secured US approval for Spinraza for use in the often fatal genetic disease in 2016. The approval covered a broad range of patients with infantile-onset (most likely to develop Type 1) SMA. 

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Eye­ing big ther­a­peu­tic push, Gink­go bags $290M to build a cell pro­gram­ming em­pire

Ginkgo Bioworks is on a roll. Days after publicizing a plan to nurture new startups via partnerships with accelerators Y Combinator and Petri, the Boston biotech says it has raised another $290 million for its cell programming platform to reach further and wider.

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UP­DAT­ED: Speak­er Nan­cy Pelosi to un­veil bill for fed­er­al­ly ne­go­ti­at­ed drug prices

After months of buzz from both sides of the aisle, Speaker Nancy Pelosi will today introduce her plan to allow the federal government to negotiate prices for 250 prescription drugs, setting up a showdown with a pharmaceutical industry working overtime to prevent it.

The need to limit drug prices is a rare point of agreement between President Trump and Democrats, although the president has yet to comment on the proposal and will likely face pressure to back a more conservative option or no bill at all. Republican Senator Chuck Grassley is reportedly lobbying his fellow party members on a more modest proposal he negotiated with Democratic Senator Ron Wyden in July.

Jeff Kindler's Cen­trex­ion re­news bid to make pub­lic de­but

Jeffrey Kindler’s plan to take his biotech — which is developing a slate of non-opioid painkillers — public, is back on.

The Boston based company, led by former Pfizer $PFE chief Kindler, originally contemplated a $70 million to $80 million IPO last year— but eventually postponed that strategy. On Wednesday, the company revived its bid to make a public debut in a filing with the SEC — although no pricing details were disclosed.