PacBio en­gi­neers $800M buy­out of se­quenc­ing ri­val Om­niome as an­a­lysts fret over FTC ac­tion

As Il­lu­mi­na runs in­to an­oth­er reg­u­la­to­ry road­block to ex­pan­sion, one of its al­most-sub­sidiaries is charg­ing ahead with a new buy­out.

Pa­cif­ic Bio­sciences, of­ten re­ferred to as PacBio, is aim­ing to swal­low ri­val Om­niome in an $800 mil­lion stock and cash deal, the com­pa­nies an­nounced Tues­day morn­ing. PacBio will fork over $600 mil­lion up­front con­sist­ing of $300 mil­lion cash and 9.4 mil­lion shares, and is on the hook for an­oth­er $200 mil­lion in cash and stock should cer­tain mile­stones be achieved.

The buy­out is ex­pect­ed to close by the end of Sep­tem­ber, the com­pa­nies added. Tues­day’s news sent PacBio shares $PACB up about 3% in pre-mar­ket trad­ing, but the stock trend­ed down about 2% af­ter the open­ing bell.

In con­junc­tion with the deal, PacBio is sell­ing off more than 11 mil­lion shares to raise $300 mil­lion in a PIPE fi­nanc­ing round. In­vestors in­clud­ed Cas­din Cap­i­tal, Soft­Bank’s SB North­star fund and T. Rowe Price.

For PacBio, a play­er in long-read ge­net­ic se­quenc­ing tech­nol­o­gy, the ap­peal cen­tered around a bet­ter se­quenc­ing tech that can ex­pand in­to the short-read space and speed up se­quenc­ing times. With the po­ten­tial for high­er ac­cu­ra­cy with Om­niome’s plat­form, PacBio be­lieves it can po­si­tion it­self as one of the on­ly com­pa­nies able to do both types of se­quenc­ing.

“Sci­en­tists and clin­i­cal re­searchers re­ly on ac­cu­rate short reads and ac­cu­rate long reads to con­duct their sci­ence and an­swer their spe­cif­ic ques­tions,” PacBio COO Mark Van Oene said in a state­ment. “PacBio is com­mit­ted to de­liv­er­ing the most ad­vanced com­bi­na­tion of se­quenc­ing so­lu­tions to en­able the com­plete ge­nomics land­scape.”

Chris­t­ian Hen­ry

The com­pa­ny faced ques­tions from an­a­lysts in a Tues­day morn­ing in­vestor call, how­ev­er, over whether this abil­i­ty will prove to be a true dif­fer­en­ti­at­ing fac­tor, par­tic­u­lar­ly giv­en the FTC is now su­ing to block Il­lu­mi­na’s $8 bil­lion buy­out of Grail. CEO Chris­t­ian Hen­ry de­fend­ed the move, say­ing Om­niome’s se­quenc­ing ca­pa­bil­i­ties were “an or­der of mag­ni­tude” bet­ter than com­peti­tors and that alone could be enough to dif­fer­en­ti­ate.

Il­lu­mi­na’s deal came up again lat­er in ques­tion­ing, with some an­a­lysts won­der­ing whether or not the scruti­ny gar­nered in that case has PacBio con­cerned the FTC will take sim­i­lar steps here. Hen­ry again brushed off the mat­ter, say­ing that while he agrees the Grail deal has a lot of folks on edge, he doesn’t fore­see any sig­nif­i­cant holdups for the Om­niome deal.

PacBio has been in­volved in the FTC’s crosshairs in the past, even be­fore new chair Lina Khan came in with big plans to shake up the agency. When Il­lu­mi­na sought to buy out PacBio for $1.2 bil­lion in late 2018, reg­u­la­tors ac­cused the se­quenc­ing gi­ant of be­ing a “mo­nop­o­list” and the two sides tore up their merg­er agree­ment less than a month lat­er.

FTC’s five com­mis­sion­ers vot­ed unan­i­mous­ly to chal­lenge the 2018 deal.

It re­mains to be seen if the FTC will move against the Om­niome trans­ac­tion. Though the FTC is su­ing to block the Grail buy­out and has vowed to take a tougher stance on phar­ma M&A, the agency waved through As­traZeneca’s $39 bil­lion ac­qui­si­tion of Alex­ion ear­li­er this year. That merg­er is ex­pect­ed to go through this week af­ter the EU and UK reg­u­la­tors signed off this month.

Khan was not in­volved in the As­traZeneca deal, as she was on­ly con­firmed to the agency’s top post in ear­ly Ju­ly.

So­cial: via Pa­cif­ic Bio­sciences web­site

At the In­flec­tion Point for the Next Gen­er­a­tion of Can­cer Im­munother­a­py

While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

All about Omi­cron; We need more Covid an­tivi­rals; GSK snags Pfiz­er’s vac­cine ex­ec; Janet Wood­cock’s fu­ture at FDA; and more

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Merck's new antiviral molnupiravir (Quality Stock Arts / Shutterstock)

As Omi­cron spread looms, oral an­tivi­rals ap­pear to be one of the best de­fens­es — now we just need more

After South African scientists reported a new Covid-19 variant — dubbed Omicron by the WHO — scientists became concerned about how effective vaccines and monoclonal antibodies might be against it, which has more than 30 mutations in the spike protein.

“I think it is super worrisome,” Dartmouth professor and Adagio co-founder and CEO Tillman Gerngross told Endpoints News this weekend. Moderna CEO Stéphane Bancel echoed similar concerns, telling the Financial Times that experts warned him, “This is not going to be good.”

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Lisa Deschamps, AviadoBio CEO

Ex-No­var­tis busi­ness head hops over to a gene ther­a­py start­up — and she's reeled in $80M for a dash to the clin­ic

Neurologist and King’s College London professor Christopher Shaw has been researching neurodegenerative diseases like ALS and collaborating with drugmakers for the last 25 years in the hopes of pushing new therapies forward. But unfortunately, none of those efforts have come anywhere close to fruition.

“So, you know, after 20 years in the game, I said, ‘Let’s try and do it ourselves,’” he told Endpoints News. 

Watch out, Roche: No­var­tis inks $1.5B deal to chase down promi­nent Parkin­son’s tar­get

Novartis is plopping down $150 million in cash to pick up an experimental Parkinson’s drug and grab an option to another, a move that puts it on an increasingly popular path in the field’s search for disease-modifying therapies.

Belgium’s UCB is its partner of choice, supplying two small molecule alpha-synuclein misfolding inhibitors in a deal that can add up to nearly $1.5 billion.

Out of the pair, UCB0599 is already in Phase II trials, making Novartis confident enough to pull the trigger on co-development and commercialization, including to foot half of the R&D bill. The pharma giant will make a decision on UCB7853 once UCB wraps the ongoing Phase I program.

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Glax­o­SmithK­line, Ox­ford un­veil new part­ner­ship pit­ting buzzy R&D ad­vances against neu­ro­log­i­cal dis­ease

When GlaxoSmithKline trumpeted its return to neuroscience with a $700 million upfront deal with Alector this summer, it touted its early investments in functional genomics as a key guidepost for that deal. Now, the drug giant has partnered up with Oxford to hopefully add jet fuel to its hunt for breakthroughs in the brain.

GSK and Oxford have kickstarted a five-year collaboration aimed at spurring R&D breakthroughs across a range of hard-to-treat diseases like Alzheimer’s and Parkinson’s through the use of genomic testing and machine learning, the partners said Wednesday.

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In­cor­po­rat­ing Ex­ter­nal Da­ta in­to Clin­i­cal Tri­als: Com­par­ing Dig­i­tal Twins to Ex­ter­nal Con­trol Arms

Most drug development professionals are familiar with the nerve-racking wait for the read-out of a large trial. If it’s negative, is the investigational therapy ineffective? Or could the failure result from an unforeseen flaw in the design or execution of the protocol, rather than a lack of efficacy? The team could spend weeks analyzing data, but a definitive answer may be elusive due to insufficient power for such analyses in the already completed trial. These problems are only made worse if the trial had lower enrollment, or higher dropout than expected due to an unanticipated event like COVID-19. And if a trial is negative, the next one is likely to be larger and more costly — if it happens at all.

With on­ly burns to show in gene ther­a­py, Astel­las inks deal with AAV spe­cial­ist Dyno in push for a bet­ter cap­sid

On the hunt for a better AAV capsid for gene therapy, Eric Kelsic’s Dyno Therapeutics has set itself apart with its focus on machine learning to help speed discovery. Now, Japanese drugmaker Astellas — fresh off a slate of gene therapy burns — is taking a bet on Dyno as it looks to the future.

Astellas and Dyno will work together as part of an R&D pact to develop next-gen AAV vectors for gene therapy using Dyno’s CapsidMap platform directed at skeletal and cardiac muscle, the companies said Wednesday. Under the terms of the deal, Dyno will design AAV capsids for gene therapy, while Astellas will be responsible for conducting preclinical, clinical and commercialization activities for gene therapy product candidates using the capsids.

Paul Hudson, Sanofi CEO (Cyril Marcilhacy/Bloomberg via Getty Images)

Sanofi snaps up new vac­cine can­di­date and de­vis­es mR­NA game plan around it — but not for what you think

Paul Hudson has spotlighted vaccines, immunology and dermatology as some of the top R&D focuses at Sanofi. His latest deal brings all of them together.

The French pharma giant isn’t sharing any financial details about the buyout of Origimm, a low-profile, private Austrian biotech whose technology promises to identify antigens causing skin disease and build vaccines against them. Their lead candidate targets acne vulgaris.

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