Should PacBio Abandon Their Set List?

In a piece on LinkedIn, Brian Krueger made a pithy comment that should give PacBio management pause.  In a series of bulletpoints he summarized key things he had heard from ASHG, and the one for PacBio starts with "And PacBio threw a party".  Parties with name musical acts has been modus operandi for PacBio Sales & Marketing for a number of years now, but I hope they seriously think about whether this is a good use of marketing dollars.  But fear not dear leader: if they do listen to Brian & I it's probably much too late to derail any plans for AGBT.

Concept: An Oxford Nanopore Adaptive Sequencing IDE

Oxford Nanopore's adaptive sequencing scheme is truly singular (but not Singular!), enabling computational adjustment of the sequencing process as it occurs.  A number of academics have demonstrated proofs-of-concept of different ways this capability can be used, with Oxford Nanopore slowly incorporating some of these higher level concepts into their MinKNOW operating software.  An idea has been rattling around in my head since London Calling that what this space truly needs is a full Integrated Development Environment (IDE) to support adaptive sequencing.  It's more than a little conceited for me to do this, given that I've contributed nothing to that field and the only adaptive sequencing experiment under my guidance was quite disappointing.  But it's an interesting enough idea that I can't resist.

Chatting Apton Acquisition with PacBio CEO Christian Henry

PacBio CEO Christian Henry chatted with me recently by teleconference on a variety of topics, but the focus was the recent PacBio acquisition of Apton Biosystems for $85M in equity.  As a regular reminder, my employer’s CEO reports in a sense to Henry, as he’s on the Board of Directors.  

A particularly interesting revelation by Henry is that PacBio had its eye on Apton in late 2021, essentially as soon as they completed the Omniome acquisition announced in July 2021 that formed the foundation for their now-released Onso short read instrument.    PacBio believed then that the desktop instrument design from Omniome wouldn’t be sufficient; PacBio felt compelled to have a path to a high-throughput instrument.  While they felt an internal effort was possible, an acquisition might shave many years off the timeline.  And PacBio liked Apton’s concepts and launched into discussions and even made an acquisition offer to Apton’s management, but no deal was reached – but nor were any bridges burned.

About a year later, PacBio was at ASHG unveiling the Revio long read instrument and sent new feelers to Apton – let’s explore a collaboration marrying our chemistry to your instrument.  Before long, just such a proof-of-concept instrument was underway, and in under two weeks positive results were in hand.  Results weren’t as good as with the well-tuned Onso prototype, but nor were they discouraging – perhaps with tuning the gap could be closed.  The proof-of-concept experiment didn’t have ideal density, the optics hadn’t been tuned and nor had the fluidics been optimized – the PacBio reagents had a significantly different viscosity than Apton had targeted.  But billions of reads at “not quite Q40” quality.  Henry particularly gushed over Apton’s optics, which achieve superresolution imagery but with rapid scanning times. This led to new discussions about what sort of structure any joint effort should take, which ultimately led to the acquisition – with PacBio particularly happy with the timing since the original Onso R&D effort was winding down.

So what will come out of all this?  Henry sketched the idea of a floor-standing model generating billions of reads.  Launch timing expectations aren’t being made public - Henry isn’t ready to put pressure on the development team – “yet”.  Accuracy in the Q40+ range and billions of reads per flowcell. Run times in the 2-3 day range - Henry and I agreed that nobody is interested in returning to the two week sequencer runs common with the first generation instruments such as GAII and SOLiD.   The unit would have sufficient onboard compute to perform the superresolution imagery processing as well as the downstream processing which is onboard the Revio.  Likely to have either 2 or 3 flowcells per run – Henry said “definitely multiflowcell” but “probably not 4 like Singular”.

From a commercial point-of-view, Henry believes that first they can capture 1-3% market share in the liquid biopsy space to create a multi-$100M business.  That’s a small slice of a big pie  - Henry isn’t making grandiose claims here.  But it’s also much easier to overshoot a small estimate than a larger one.  Henry believes that the current Onso will be important in this market, but ultimately there needs to be a big machine as well.  

He also sees the Onso instruments, and particularly an Apton-enabled high throughput instrument, as important for selling Revio and future long read instruments (more on that below).  He was very gracious about competitors all around – in his view Element Biosystems, Singular Genomics, Oxford Nanopore and the rest are important counterweights to PacBio drifting into hubris and complacency.

Some observers such as this scribe worry that the Onso short read platform will distract attention from the long read Revio/Sequel platform, but Henry is clearly still very invested in the long read side of the business - and a strong believer in sales synergy between the long read and short read instruments. Globally, PacBio is seeing success selling Revio plus Onso bundles. He sees the size of the commercial organization – now over 200 people – as an edge against small players like Element and Singular.   Revio, he says, is performing well in the field and performance enhancements will be coming late this year or early next year. That might include library preps from 100 nanograms or less of input DNA.   And 40% of Revio orders are to new customers, not previous Sequel line owners.  And with increasing interest in the small fraction of long DNA fragments in cell-free DNA, Henry sees possible crossover  between the Onso focus on cell-free DNA diagnostics (aka liquid biopsies) and the long read business – but also that competition in this space “keeps PacBio honest”

Henry says that PacBio is “deep in development” on a next generation SMRTcell, designed to enable 10K 30X human genomes per year – and many population genetics studies are opting for 12-15X coverage so that might be multiplied by a bit more than a factor of two (and with current Revio, that brings each samples slice of the flowcell to about $500).  At the other end, development of a benchtop system with a “dramatically lower”  pricetag is well under way.  PacBio is also investing heavily in computational biology, viewing long read computational biology as still having a lot of catching up to do relative to short read computational biology.

 

With regard to Oxford Nanopore,  Henry frequently grants compliments – but is also fiercely competitive.  So in one breath he praises MinION as a great product and “we won’t touch them”, but the next touts Revio for large scale long read studies.  He claims that the all in cost of Revio is better than Oxford Nanopore (a claim I’m sure ONT would contest – everybody, get out your green eyeshades!).  Henry noted that at current duplex rates, large oversampling is required on PromethION to cover a genome – which I’m sure ONT would counter with “wait until the next release of duplex”.  Henry claims that one “major institution” took delivery of a Revio and then mothballed their Oxford Nanopore instruments.

For cell free DNA in particular, Henry is very bullish on Onso’s accuracy being a major advantage.  In a head-to-head comparison of Illumina with Unique Molecular Indexes (UMI) and Onso without UMI, Illumina required four times as much data to achieve a similar level of accuracy.  Translational genomics player TGEN decided on an Onso plus Revio bundle after seeing this sort of quality improvement.  But Henry conceded the for most germline variants the advantage might not appear – though he did qualify this with a comment that Illumina’s filtering can lose coverage in some tricky spots in the genome.

It’s so much fun to track a space that is absolutely cutting-edge in terms of technology yet still has so much innovation bubbling.  Apton and Omniome decided that the best route to market for their technologies was to be acquired; Ultima, Element and Singular are trying the independent route.  Acquisition isn’t a panacea - I’m sure anyone who worked passionately on LaserGen was floored by Agilent’s decision to shelve that technology, and if I had spent long hours on Genia or Stratos I’d be unhappy with Roche’s inability to launch a sequencer.  Onso is still early in its launch phase in a crowded market, with more than a little skepticism in social media as to whether it can carve out a niche.  It will take at least a year or two before we can really assess Henry’s bullish position on the technology, and perhaps another couple of years before we see Apton technology in the field.  But for me, watching all this unfold never begins to bore

Two More Automation Partners Join PacBio Compatible Program

A significant challenge for the long read sequencing vendors has been that short read sequencing has a decade and a half head start in evolving a tools ecosystem.  New entrants such as Singular Genomics and Element Biosciences can take the strategy of building short bridges to existing tools designed for Illumina whereas the long read players must often build anew, as tools and protocols sufficient for short reads often are lacking performance on long reads.  At J.P. Morgan in January, PacBio had announced a PacBio Compatible program to highlight products which specifically support PacBio sequencing.  This morning, two more automation vendors -- Revvity and Tecan -- have joined their liquid handling automation to the program.  I got a walkthrough of the new announcement from PacBio's Amit Patel yesterday.

Apton (Super) Resolution to Be Acquired Fulfilled by PacBio

Wednesday night brought the news that Pacific Biosciences has both officially launched their Onso desktop short read sequencer and bought technology for a high throughput version of it by acquiring Apton Biosystems.  Apton had been developing their own short read chemistry and an instrument based on super0resolution imaging to go with it and was apparently relatively close to launch.  PacBio got Apton for $110M, with $85 paid now in PacBio stock and the remaining $25M "stock and cash add-ons" according to GenomeWeb (premium/free via ex-Twitter) - so presumable based on certain milestones being met.  

Overheard in a Thai Restaurant

An amusing incident happened on the Sunday of Memorial Day weekend that is a reminder that even when there are no walls the walls in the Boston area can have biotech-tuned ears.  Oh, and a funny quirk of fate that I swear I'm not making up.

Illumina: Where Was the Board?

Sunday brought news that Francis deSouza had resigned as CEO of Illumina.  It at first might have seemed he had survived the boardroom challenge from activist investor Carl Icahn, losing only one ally - Board Chairman John Thompson.  But that apparently effectively made him a lame duck, and he is now leaving immediately -- leaving no one at the helm of Illumina momentarily but also eliminating any interference from deSouza with the installation of his successor.  If you have access to STAT+, Matt Herper's commentary is very informative (I'd expect nothing less).