Here's Why Pacific Biosciences Gained as Much as 10.5% Today | The Motley FoolThe primary reason for Illumina to acquire Pacific Biosciences is that the latter has the leading long-read, single-molecule DNA sequencing technology platform. It can read parts of the human genome that Illumina's short-read approach cannot see, which has made it increasingly valuable to researchers asking difficult questions about genetic links to disease.
Therefore, it may seem odd that Illumina would open up the IP at the center of the merger, but there's a not-so-subtle power play here.
The United Kingdom's Competition and Markets Authority (CMA) has taken a critical stance on the proposed merger, citing the massive market share the merged company would hold in the global DNA sequencing market. It's right. But the U.K. is also home to Oxford Nanopore, which is developing a technology platform based on nanopore sequencing that could eventually overtake both Illumina and Pacific Biosciences. In other words, the CMA is partially protecting its homegrown sequencing powerhouse.
By proposing to open up all intellectual property related to single-molecule, native long-read DNA sequencing, Illumina is essentially making two bets. First, Illumina thinks it can commercialize and improve the existing technology of Pacific Biosciences better than any competitor. It currently dominates the global DNA sequencing market in terms of reach and customer relationships, so that's not a stretch.
