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Pacific Biosciences Terminates SMRT Agreement with Roche
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Headquartered in Menlo Park, CA, Pacific Biosciences of California, Inc. (PACB - Free Report) , announced that F. Hoffman-La Roche Ltd has chosen to terminate a preexisting development, commercialization and license agreement. Per the agreement with Pacific Biosciences, Roche was developing and supplying diagnostic products based on the company’s Single Molecule, Real-Time (SMRT) technology. Notably, shares of Pacific Biosciences dropped almost 21.4% to close at $3.89 following the news release.
The stock represents a negative year-to-date return of almost 70.4%, in contrast with the gain of the Zacks categorized Medical Instrument sub-industry’s 0.6% and the S&P 500’s 10.7%. However, a long-term expected earnings growth rate of 30.0%, and a projected sales growth of 18.92%, compared with the industry’s 18.44% instills some confidence in investors.
Meanwhile, the estimate revision trend for the stock has been dismal as three estimates moved south and none moved north in the last two months. Notably, the current year estimate for the stock stands at a loss of 86 cents per share.
The agreement was entered into by the parties in 2013. Upon termination, other than retaining certain non-exclusive rights with respect to using products already purchased from Pacific Biosciences under the agreement, Roche will have no rights to the SMRT technology. Also, Pacific Biosciences will be free to commercialize products based on the Sequel sequencing platform into the clinical research and sequencing market.
Pacific Biosciences of California develops, manufactures and markets sequencing systems, which help in studying synthesis, composition, structure and regulation of deoxyribonucleic acid, popularly known as DNA.
Going forward, we believe Pacific Biosciences’ business would continue to witness growth. The company’s product and service revenue for 2016 is expected to grow between 55% and 65% over 2015. The company is also targeting product and service revenue growth by another 40% to 60% in 2017.
Zacks Rank & Key Picks
Currently, Pacific Biosciences has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical space include Addus HomeCare Corporation (ADUS - Free Report) , LHC Group, Inc. and HMS Holdings Corp. . Addus HomeCare and LHC Group sport a Zacks Rank #1 (Strong Buy) while HMS Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 42.4%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 1.5% in the last one month.
HMS Holdings has an expected earnings growth of almost 14.3%. The company posted a promising year-to-date return of 53.9%.
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Pacific Biosciences Terminates SMRT Agreement with Roche
Headquartered in Menlo Park, CA, Pacific Biosciences of California, Inc. (PACB - Free Report) , announced that F. Hoffman-La Roche Ltd has chosen to terminate a preexisting development, commercialization and license agreement. Per the agreement with Pacific Biosciences, Roche was developing and supplying diagnostic products based on the company’s Single Molecule, Real-Time (SMRT) technology. Notably, shares of Pacific Biosciences dropped almost 21.4% to close at $3.89 following the news release.
The stock represents a negative year-to-date return of almost 70.4%, in contrast with the gain of the Zacks categorized Medical Instrument sub-industry’s 0.6% and the S&P 500’s 10.7%. However, a long-term expected earnings growth rate of 30.0%, and a projected sales growth of 18.92%, compared with the industry’s 18.44% instills some confidence in investors.
Meanwhile, the estimate revision trend for the stock has been dismal as three estimates moved south and none moved north in the last two months. Notably, the current year estimate for the stock stands at a loss of 86 cents per share.
The agreement was entered into by the parties in 2013. Upon termination, other than retaining certain non-exclusive rights with respect to using products already purchased from Pacific Biosciences under the agreement, Roche will have no rights to the SMRT technology. Also, Pacific Biosciences will be free to commercialize products based on the Sequel sequencing platform into the clinical research and sequencing market.
Pacific Biosciences of California develops, manufactures and markets sequencing systems, which help in studying synthesis, composition, structure and regulation of deoxyribonucleic acid, popularly known as DNA.
Going forward, we believe Pacific Biosciences’ business would continue to witness growth. The company’s product and service revenue for 2016 is expected to grow between 55% and 65% over 2015. The company is also targeting product and service revenue growth by another 40% to 60% in 2017.
Zacks Rank & Key Picks
Currently, Pacific Biosciences has a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader medical space include Addus HomeCare Corporation (ADUS - Free Report) , LHC Group, Inc. and HMS Holdings Corp. . Addus HomeCare and LHC Group sport a Zacks Rank #1 (Strong Buy) while HMS Holdings carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Addus HomeCare has a long-term expected earnings growth rate of approximately 15%. Notably, the stock represents an impressive one-year return of 42.4%.
LHC Group has a long-term expected earnings growth rate of 15%. The company has returned almost 1.5% in the last one month.
HMS Holdings has an expected earnings growth of almost 14.3%. The company posted a promising year-to-date return of 53.9%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>