PacBio Seeks $200M IPO to Gain Edge in Booming DNA Sequencing Market
Pacific Biosciences, the Menlo Park, CA-based company developing faster and cheaper gene sequencing technology, has filed a regulatory prospectus in which it says it hopes to raise as much as $200 million through an IPO.
The PacBio investors who stand to gain the most from an IPO are Mohr Davidow Ventures (12 percent ownership), Kleiner Perkins Caufield & Byers (9.7 percent), Maverick Capital (9.1 percent), and San Diego-based Gen-Probe (8.6 percent).
Founded in July 2000, PacBio has accumulated a deficit of $255 million through June 30, and still had about $139 million in cash and investments on that date, according to the filing. If the company can entice enough public investors to buy into what it’s selling, PacBio would begin trading under the symbol (NASDAQ: PACB). The IPO underwriters include JP Morgan, Morgan Stanley, Deutsche Bank, and Piper Jaffray.
The big idea at PacBio, which I described last month when the company said it raised $109 million in venture capital, is to develop new gene sequencing instruments with enough horsepower to deliver the complete genome sequence from a human being in about 15 minutes and for a few hundred dollars. If this can be done on commercial scale, it would be a stunning advance, given the original Human Genome Project took 13 years and cost $3 billion, as PacBio points out in its prospectus.
Making sequencing cheaper and more accessible could enable researchers to run all sorts of experiments exploring the subtle variations in DNA that make people different, and better understand which differences in genetic coding are related to disease and wellness. San Diego-based Gen-Probe invested in PacBio’s technology to turn it into a diagnostic tool.
Given all the new things researchers can do with fast and cheap sequencing, PacBio is betting that the market for its tools will boom. The company, in its IPO prospectus, says the DNA sequencing market is expected to grow from $1.2 billion in 2009 to more than $3.6 billion by 2014, citing figures from Scientia Advisors, a market research and product development consulting firm. PacBio, of course, isn’t the only company with its sights on better/faster/cheaper gene sequencing, as it competes with the likes of Illumina (NASDAQ: ILMN), Life Technologies (NASDAQ: LIFE), Complete Genomics, and others. We’ll be watching to see if PacBio can pull off this big IPO and get more resources for its ambitious idea.