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What: Pacific Biosciences of California (NASDAQ:PACB), which is unveiling its new DNA sequencer at the American Society of Human Genetics (ASHG) this week, rose as much as 25% today before giving a little of it back in afternoon trading.

So what: ASHG is the perfect place for Pacific Biosciences to unveil its new Sequel System since most of its potential customers will be at the scientific meeting.

Pacbiosequel

Sequel System. Souce: PacBio

Today the company held a "workshop" -- a sales pitch by any other name -- highlighting how the longer sequence reads that its sequencer can produce help fill in parts of the genome that are difficult to sequence. It's also possible to make de novo assemblies of the sequences from a whole genome. The shorter sequence reads from rival Illumina (NASDAQ:ILMN) require a reference genome that can introduce bias and cause variations to be missed.

The longer-reads-are-better concept isn't really new. It's the main -- perhaps only -- reason that researchers would buy the company's old PacBio RS II. Despite the issues with shorter sequences, Illumina's system can sequence a genome at a substantially lower cost.

The new Sequel System is cheaper than the PacBio RS II. The company has disclosed the list price for the system of $350,000, but that doesn't tell you how much the actual sequencing will cost since there are consumables used by the machine that factor into the cost.

Now what: The lower cost should result in more sales of the Sequel System compared to the 150 PacBio RS systems Pacific Biosciences has in place. The ultimate cost per genome, which should continue to come down as the company makes more tweaks to the new system, will ultimately determine how much of Illumina's business Pacific Biosciences can take.

While researchers are important, the larger market for the system will likely come from Pacific Biosciences' partnership with Roche, which is developing diagnostics to be used on the machines. The initial launch for clinical research will happen in the second half of 2016 followed by actual diagnostics run on the Sequel System.

Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Illumina and Pacific Biosciences of California. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.