The Federal Trade Commission's action to block Illumina (ILMN) from acquiring Pacific Biosciences of California (PACB) due to anti-competitive concerns is unsurprising given the U.K.'s Competition and Markets Authority's decision to block the deal, Piper Jaffray analyst William Quirk tells investors in a research note. The analyst believes Illumina will continue to invest in its own long-read technology and look into a distribution partnership with Pacific Biosciences. The latter's Sequel II launch is progressing well and any partnership with Illumina would drive additional volume, contends Quirk. As such, he views the selloff in shares of Pacific Biosciences as a "strong buying opportunity." The analyst reiterates an Overweight rating on the name with a $7 price target. The stock in premarket trading is down 8% to $4.93.

Bernstein lowered the firm's price target on PacBio to $2.50 from $9 and keeps an Outperform rating on the shares following the "weak" Q1 preannouncement. The firm says the number one question it is getting from investors is: Is PacBio the next NanoString Technologies (NSTG), in essence will the company go bankrupt? While Bernstein thinks the next twelve months will continue to be very challenging for PacBio, it reiterates an Outperform rating after pressure testing the company's prospects. While a delay in achieving positive cash flow "could be dangerous for the stock," becoming cash flow positive in 2027 is crucial for the company to avoid entering a refinancing negotiation in a very weak position, the analyst tells investors in a research note. Bernstein believes this is possible.