I am by no means new to the biotech world, but I am new to trading (actually not trading anything), so I was shocked in a pleasant way to see PACB (known to me commonly as PacBio, or Pacific Biosciences) on Tim’s watchlist last weekend (this is mid December 2015).  

 

I know the company from an end-user perspective and can say that it is a SOLiD competitor in the genomics world (biotech people will find that to be an amusing pun).  PACB single molecule sequencing technology is especially useful for genome assembly when the genome being sequenced is from a never-before-sequenced genome.  

 

As I examined the SEC filings last Sunday evening, and found that PACB was into a thirteen year contract with Roche, meeting their milestones, and bringing in a few million dollars, it made sense that their stock prices and volumes were up.  However, this was brewing since mid 2015 or before.  More than a 50% increase in stock value over a year is a lot, but apparently not in the Penny Stock world. That alone might have been the reason to start watching PACB.  However, I (albeit with zero trading experience) could not find any news that would make PACB potentially worthy of either a major spike, or a major crash - just mildly increased interest (volatility?) in their company.  

 

What I still do not know is why this is a thirteen year contract, what tests will be performed using PACB technology, and how profitable these tests will be to both PACB and Roche.  For example, is this going to be a widely adopted and low cost HIV or breast cancer screen, or something less lucrative like a test for rare and neglected tropical diseases? Maybe the conferences on diagnostic medicine in early 2016 will reveal more.  Is PACB less of a penny stock thing, and more of a longer term hold type thing?  I don't know.

 

 

However, I suspect that thirteen years is what still remained on some exclusive patent rights for the diagnostic tests or underlying technology that has been developed.  I have not yet delved into the PACB or Roche patent applications to try and find out (assuming it is their own technology and not just a license).  Thirteen years is a long time for PennyStockers.  I would hope that the new tests will be profitable - that is what companies are supposed to be about.  But, I am still left wondering: as a potential short term penny stock trade target, Why PACB?