New Leadership Driving New Interest In Pacific Biosciences

Summary

• Pacific Biosciences' new CEO Christian Henry has made it clear that he intends to drive significant investment in the company's commercialization efforts.
• Strategic partnerships could be an underappreciated opportunity and a "force multiplier" for Pacific Biosciences' commercialization efforts, particularly if a company like Illumina or Thermo Fisher comes into the picture.
• Pacific Biosciences still has yet to make the difficult transition from an R&D company to a viable commercial enterprise, but Henry looks like a good choice to lead that process.

It's been a little wild lately for Pacific Biosciences (NASDAQ:PACB) ("PacBio"). While there have been several strong names in life sciences over the past three months and on a year-to-date basis, including companies like 10x Genomics (TXG), Berkeley Lights (BLI), and Nanostring (NSTG), PacBio has sprinted ahead about 125% since my last update, largely, I believe, on renewed optimism around the naming of Christian Henry as the company's new CEO.

PacBio's technology is solid - I believe it has the best technology and products for long-read sequencing - but the commercial execution has never been. With Henry previously having served as Illumina's (ILMN) Chief Commercial Officer, among other roles in a long career at that leading sequencing company, I believe he brings the experience and know-how to meaningfully improve PacBio's go-to-market efforts.

With the shares so much higher now, I believe the story is more reliant on execution now than before. While I do believe Henry will lead the company to significant improvement here, it won't happen overnight, and I do still see quarter-to-quarter volatility risks. While I do still see the double-digit upside here, expectations are significantly higher.

A Not-Completely-Unexpected Change At The Top

When I last wrote about PacBio, I noted the company's need to find a replacement for the retiring CEO Michael Hunkapiller and suggested that the company's Chairman, Christian Henry, could be an option. The company announced that move two days later, and about a week ago, the company named Susan Kim as the new CFO. While Ms. Kim doesn't have direct experience in genomics/life sciences, she has an academic background in chemical engineering and experience with both large and small tech companies.

The market has reacted very positively to Henry's appointment, and I believe that's a fair reaction. Henry worked at Illumina from 2005 to 2017, a time

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.