PacBio builds in short-read sequencing with $110m Apton buy

Gene sequencing specialist PacBio has reached an agreement to buy Apton Biosystems, boosting its position in short-read sequencing technology that has traditionally been dominated by rival Illumina.

The deal includes an upfront payment of $85 million in the form of an all-stock transaction, with a total deal value of $110 million dependent on PacBio achieving $50 million in revenue as a result of absorbing Apton's technology platform.

California-based Apton has developed a high-throughput short-read sequencer technology that is designed to enable the sequencing of billions of clusters of DNA on one flow cell.

PacBio built its business on long-read raw sequence data, analysing DNA sequences of 10,000 base pairs or more, which the company says makes it easier to assemble genome data and is more accurate at finding rare variations, but is comparatively low throughput.

Illumina – by far the biggest player in the market overall – traditionally focused on high-throughput short reads of up to 300 base pairs.

Both companies have been making moves to encroach on each other's territory of late. Illumina launched its own long-read Infinity technology last year, while PacBio has developed its short-read chemistry – called Sequencing by Binding (SBB) – which will now be combined with Apron's sequencer device.

PacBio also revealed in its second-quarter results update that it has started rolling out a new short-read sequencing benchtop instrument called Onso that will make use of the SBB technology. It added the instrument through its $316 million acquisition of Omniome in 2021.

With the Apton acquisition, PacBio expects to "launch a high throughput short-read platform faster than we had planned", said the company's chief executive Christian Henry. Apton's tech will be used to develop the high-throughput version of Onso.

"When launched, we expect this platform to deliver billions of reads per flow cell sequencing output on par with other high throughput offerings while providing differentiated accuracy and compelling economics," he told investors on a conference call.

"We believe PacBio is the only company to offer both highly accurate, native short and native long-read sequencing technologies," added Henry.

In 2019, Illumina made a play to acquire PacBio in a deal valued at $1.2 billion but abandoned the plan after it became clear it would struggle to make it past antitrust regulators in the US and overseas.

The Apton agreement came as PacBio reported a 34% increase in second-quarter revenues to just under $47 million, posting an operating loss of $73 million with cash reserves of around $830 million.