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Pacific Biosciences of California, Inc. Message Board

  • tampico1200 tampico1200 May 24, 2012 2:19 PM Flag

    PACB as a target

    I'd be willing to bet that the person who wrote this Stockpickr article just pulled that "half decade" comment out of thin air (or elsewhere) But read the whole thing and draw your own conclusions.

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    "Pacific Biosciences

    As noted earlier, Roche is willing to pay more than $5 billion to acquire gene sequencing firm Illumina. But other firms looking to enter the space may end up targeting another industry player for just a fraction of that price. Pacific Biosciences (PACB) currently is worth less than zero, after you remove the company’s $161 million cash balance from the equation. PACB is valued at $143 million on the open market.

    The stock is so cheap simply because this gene sequencer is roughly a half decade behind Illumina on the development curve. While Illumina is expected to boost sales roughly 8% in 2013 to around $1.2 billion, Pacific Biosciences’ sales won’t likely top $40 million by then.

    Yet investors may be overlooking how much money has already gone into the company’s technology base. Pacific Biosciences has spent a cumulative $250 million in R&D over the last three years, giving the company a considerable headstart for any firm that wants to enter into this biotechnology niche.

    Right now, this stock is getting little investor affection simply because it is unprofitable -- and will likely remain that way for at least a few more years. Yet for potential acquirers, that loss can be easily absorbed if it means getting control of the company’s technology platform. "

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