We recently compiled a list of the 10 Best Genomics Stocks To Buy Right Now. In this article, we are going to take a look at where Pacific Biosciences of California, Inc. (NASDAQ:PACB) stands against the other genomics stocks.
Genomics is the study of genes and how they function. Many rapidly growing companies are emerging in the genomics field as technological advances substantially reduce the cost, accuracy, and time required to map a human being’s genome.
Investors in innovation, like Cathie Wood, the CEO of ARK Investment Management, believe that these developments are bringing about a “Genomic Revolution.” She stressed the potential of genomics and urged investors to see beyond conventional market benchmarks to seize revolutionary growth. On the eToro’s Digest & Invest podcast on October 21, 2024, Wood emphasized that concentrating only on the most prominent indexes may restrict exposure to ground-breaking innovation. She stated that reduced AI training costs have boosted genomics productivity, opening the door to important breakthroughs like gene editing that targets diseases. She is nevertheless optimistic about these stocks’ long-term worth, despite the present market reluctance and cash flow-driven tendencies made worse by ongoing high interest rates. According to Wood, avoiding this industry may result in missed opportunities as it progresses from development that relies heavily on investments to future profitability. She believes the market is changing and that early adopters will benefit from the convergence of genomics and AI.
Nonetheless, there have been encouraging breakthroughs from a number of genomic companies in 2024, and investors have seen financial rewards as the biotechnology sector of the broader market has risen by 29.33% since the beginning of the year.
According to Grand View Research, the global genomics market was estimated to be worth $32.65 billion in 2023 and is projected to grow at a compound annual growth rate of 16.5% between 2024 and 2030. Factors including the rising need for customized treatment, gene therapy, drug development, rising cancer rates, and a notable surge in consumer genomics demand in recent years are all contributing to the genomics market’s expansion. The pharmaceutical and biotechnology companies segment dominated the global genomic market in 2023, as per the aforementioned research. In terms of market share, North America held the biggest share in 2023 (42.65%), while Asia Pacific is anticipated to develop at the fastest rate during the forecast period.
The fields of gene editing and cell and gene therapies (CGTs) are also developing quickly. The UK approved Casgevy for sickle cell disease and β-thalassemia, pointing out the potential of CRISPR gene editing. According to Deloitte’s research report, the growing market for CGTs, from US$5.3 billion in 2022 to $19.9 billion in 2027, signals a shift towards customized advanced medicine despite high costs leading innovative business models. Furthermore, as per the report, GenAI can analyze a variety of information, such as clinical history, genomes, and social determinants of health, to produce deeper insights that have the potential to completely transform the way healthcare is delivered.
Looking forward, Chris Garabedian, CEO of Xontogeny and Venture portfolio manager at Perceptive Advisors, stated:
“I think 2024 will be a transition year, a little more carnage left and a clearing. There are signs of hope this year, and after the election and that uncertainty is behind us, I think we’re going to start to see 2025 look healthy.”
Methodology:
We sifted through holdings of Genomics ETFs and online rankings to form an initial list of 20 genomics stocks. Then we selected the 10 stocks that had the highest upside potential. The stocks are ranked in ascending order of the upside potential, as of November 14.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)
A molecular biologist, carefully studying the reagents under a microscope.
Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Upside potential as of November 14: 47.48%
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is at the forefront of long-read sequencing technology, which maps the entire genome using longer DNA segments. Despite the completion of the Human Genome Project in 2003, PacBio proved the value of its HiFi whole-genome sequencing method by assisting researchers in completing the 8% of the genome that the previous effort had overlooked.
Omniome, Inc.’s Sequencing by Binding (SBB) chemical was acquired by Pacific Biosciences of California, Inc. (NASDAQ:PACB) in 2021. A different method from short-read sequencing, SBB is intended to read repetitive, challenging-to-read stretches of the genome. Scientists who want the benefits of both short- and long-read sequencing may have an alternative in PacBio’s HiFi sequencing and SBB chemistry when appropriately combined.
The Americas account for the majority of the company’s sales, with Asia-Pacific, Europe, the Middle East, and Africa following closely behind. In Q3 2024, PacBio’s consumables sales increased from $16.9 million YoY to $18.5 million, a record quarter for Onso. Furthermore, due to efficient cost control and operational improvements, non-GAAP operating expenditures dropped to $62.4 million from $90.9 million YoY, and the non-GAAP net loss dropped from $67.9 million to $46.0 million.
Pacific Biosciences of California, Inc. (NASDAQ:PACB) made significant strategic advances with the launch of its SPRQ chemistry and the Vega benchtop sequencer, which aimed to improve data accuracy while lowering sequencing costs. To strengthen its technological offerings and presence in the precision medicine market, the company also formed key alliances and partnerships, such as joining the 10x Genomics Compatible Partner Program and setting up a collaborative laboratory in Singapore.
Looking forward, the management of Pacific Biosciences of California, Inc. (NASDAQ:PACB) is hopeful that the company will resume growth in 2025 as a result of its strategic efforts, financial position strengthening, and reduction of cash burn. The company is still dedicated to reaching cash flow positivity by the end of 2026, and it plans to do so by utilizing its strategic alliances and innovative product releases.
Overall PACB ranks 6th on our list of the best genomics stocks to buy. While we acknowledge the potential of the PACB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PACB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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