Pacific Biosciences of California (NASDAQ: PACB): DNA Sequencing For Sale

Pacific Biosciences of California (NASDAQ: PACB): DNA Sequencing For Sale

Pacific Biosciences of California (NASDAQ: PACB): DNA Sequencing For Sale

Pacific Biosciences of California (NASDAQ: PACB) has created a new way to study DNA, RNA, and protein. It is a company set to change the way people acquire and read systems through the development of tools for biological research. The company has developed a platform called SMRT (Single Molecule Real Time) technology, which allows for the transformation of biological systems by opening a way into systems not formerly open for biological study.  It has also created a platform called the PacBio for the DNA sequencing market. The PacBio RS is a platform that uses the Pacific Biosciences SMRT Cell. It was created to be useful to workflows and information systems and for rapid adoption. The focus of Pacific Biosciences is on systems for various kinds of research that have the ability to influence scientific study beyond DNA sequencing.

Pacific Biosciences is headquartered in Menlo Park in California. The appeal of this company resides in its ambition to extend DNA sequencing capabilities and marketing products based on its scientific findings.  This falls right in line with its publication of articles in respected journals on the strength of the SMRT platform. In addition, PACB has enjoyed contracts and grants for its PacBio RS systems and SMRT technology.

Last year, the company made a number of positive moves toward profitability. It released an upgrade that enabled genome assemblies with accurate base level. The upgrade expanded the number of projects that benefited from its DNA sequencing method. The company and the University of California at Davis (UC Davis) reached an agreement for a genome project. The university will use PACB’s SMRT technology to sequence the genomes from pathogen samples. Pacific Biosciences also improved its DNA sequencing system and software for resolving complexity in the biological sciences sector. The company’s system backlog as of December 31, 2012 included orders for five PacBio RS instruments.

In its fourth quarter of 2012, the Company generated revenues that totaled $5.9 million, compared with revenues of $2.8 million for the third quarter of 2012. Net loss for the quarter was $21.7 million, compared with a $22.7 million net loss reported third quarter of 2012. Gross profit for the fourth quarter of 2012 totaled $0.6 million, resulting in a gross margin of 11 percent, compared with a $0.2 million gross profit for the third quarter of 2012 and a gross margin of 7 percent. Cash and investments as of December 31, 2012 totaled $100.6 million compared to $119.4 million reported on September 30, 2012.

At present, the stock trades at $2.16. This is significantly lower than bigger competitors such as Amgen Inc. (NASDAQ: AMGN), Biogen Idec Inc. (NASDAQ: BIIB), and Gilead Sciences Inc. (NASDAQ: GILD).  Assuming that Pacific Biosciences would trade at the valuation levels of its rivals, investors would easily double their money. While the net loss may be discouraging, this stock appears too cheap to ignore. The bottom line is that DNA sequencing may soon become big business. Look to bioscience companies to market what will transcend the sector in the next few quarters. 

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  • meikoacebo

    DNA industry is going to explode in the coming years. Very interesting.

  • DanSlone

    Bioscience and biomedical technology will be to this century what computer science was to the last one. They will have the same profound effects on the economy and society. What we’re seeing now is just the first trickle in the flood of companies that will emerge over the next decade to decade and a half. Watch these companies and start trying to pick winners. Wouldn’t you have loved to have gotten in on the ground floor with Apple, Microsoft, or Cisco?

  • konraad

    I beleive this stock is highly undervalued. there no better time than now, to add it to your portfolio

  • mrego123

    The company is in the midst of a war with Athena Health and it is quite clear that PACB will not win this one and the fundamentals are messy.