Consortium Delivers Publicly Available Datasets that Enrich Detection of Rare and Novel Genetic Variants for Advances in Human Disease Research "Joining forces with PacBio has enabled us to leverage their HiFi sequencing capabilities, enhancing the depth and accuracy of the genomic data we can offer to the research community," said Michael Schatz, Bloomberg Distinguished Professor at Johns Hopkins University. "This effort complements existing databases such as gnomAD, as long reads enable much greater sensi ...

Core Viewpoint - Pacific Biosciences of California, Inc. (PacBio) is experiencing growth driven by its focus on research and development, with optimism stemming from a solid first-quarter 2024 performance and ongoing product development activities, despite facing competition and macroeconomic challenges [1][3][10]. Company Performance - Year-to-date, PacBio's stock has declined by 80.9%, contrasting with a 6.9% growth in the industry and an 11.6% gain in the S&P 500 Composite [2]. - The company has a market capitalization of $509 million and projects an 18% growth for 2024, with earnings surpassing the Zacks Consensus Estimate in three of the last four quarters, averaging a surprise of 11.6% [3][10]. Research and Development Focus - PacBio is committed to enhancing its R&D efforts, focusing on developing new and existing platforms while increasing throughput and reducing costs for customers [4]. - The company is developing a high-throughput short-read platform expected to serve high-throughput labs, with an addressable market estimated at over $1 billion annually [6]. - Ongoing development of the next-generation SMRT cell aims to support a new high-throughput long-read platform, significantly increasing throughput compared to the Revio system [7]. Product Development Activities - PacBio is expanding its presence in the RNA-sequencing market, recently launching the PureTarget repeat expansion panel to examine genes linked to severe neurological conditions [8]. - The company introduced two high-throughput library preparation kits optimized for its Revio sequencing system and a versatile Nanobind DNA extraction kit, broadening the range of sample types for long-read sequencing [9]. Financial Results - In the first quarter of 2024, PacBio's earnings aligned with the Zacks Consensus Estimate, while revenues exceeded expectations, with notable growth in product and consumables revenues [10]. - Strong geographical performance in the Asia-Pacific region and EMEA contributed positively, alongside an expansion of the adjusted gross margin [10]. Market Challenges - Macroeconomic factors, including rising inflation and global supply-chain constraints, have negatively impacted PacBio's customers and extended sales cycles, potentially affecting revenues and operations throughout 2024 [11]. - The company faces stiff competition in the nucleic acid sequencing market, with competitors having more resources to adapt to new opportunities and technologies [12]. Estimate Trends - PacBio has seen a positive revision trend for 2024 estimates, with the Zacks Consensus Estimate for adjusted loss per share narrowing from $1.01 to $0.91 over the past 60 days [13]. - The estimated fiscal 2024 revenues are projected at $176.3 million, reflecting a 12.1% decrease from the previous year [13].

Core Viewpoint - Pacific Biosciences of California (PACB) has shown significant stock performance, returning +36% over the past month, outperforming the S&P 500 composite's +6.1% and the Zacks Medical - Instruments industry's +6.9% [2] Earnings Estimate Revisions - The company is expected to report a loss of $0.23 per share for the current quarter, reflecting a year-over-year change of +11.5% [5] - The consensus earnings estimate for the current fiscal year is -$0.91, indicating a year-over-year change of +18%, with a recent change of +8.8% over the last 30 days [5] - For the next fiscal year, the consensus estimate is -$0.75, showing a change of +17.5% from the previous year, although this estimate has decreased by -10.7% recently [6] - The Zacks Rank for Pacific Biosciences is 3 (Hold), indicating a neutral outlook based on earnings estimate revisions [7] Revenue Growth Forecast - The consensus sales estimate for the current quarter is $40.4 million, representing a year-over-year decline of -15.1% [10] - The sales estimates for the current and next fiscal years are $176.32 million and $231.05 million, indicating changes of -12.1% and +31%, respectively [10] Last Reported Results and Surprise History - In the last reported quarter, Pacific Biosciences generated revenues of $38.81 million, a slight year-over-year decrease of -0.2% [11] - The EPS for the same period was -$0.26, compared to -$0.31 a year ago, with a revenue surprise of +0.08% against the Zacks Consensus Estimate [11] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped revenue estimates each time [12] Valuation - Pacific Biosciences is graded D on the Zacks Value Style Score, indicating it is trading at a premium compared to its peers [16]

Core Insights - The GREGoR Consortium has selected Ambry Genetics and PacBio to support the Pediatric Mendelian Genomics Research Center program aimed at understanding rare diseases [1][2] - The initiative will utilize long-read sequencing technology to analyze up to 7,000 human whole genomes over three years, focusing on rare disease etiology [2][3] Company Overview - Ambry Genetics is a leader in clinical genomic testing, translating scientific research into actionable test results and has a strong track record in genetic disease understanding [5] - PacBio specializes in advanced sequencing solutions, focusing on accuracy and quality through its HiFi long-read and SBB short-read sequencing technologies [6] Research Objectives - The collaboration aims to enhance understanding of rare diseases by incorporating innovative methods such as phenotyping, variant identification, and functional analysis of genetic alterations [3][4] - The project seeks to discover new rare variants and understand the role of epigenomics in disease manifestation, potentially revolutionizing diagnostic capabilities [3][4]

Pacific Biosciences of California, Inc. (PACB) , popularly known as PacBio, delivered an adjusted loss per share of 26 cents in first-quarter 2024, narrower than the year-ago loss of 31 cents per share. The adjusted loss per share aligned with the Zacks Consensus Estimate.The company’s GAAP loss per share was 29 cents in the quarter, narrower than the year-ago period’s loss of 36 cents.Revenues in DetailPacBio registered revenues of $38.8 million in the first quarter, down 0.2% year over year. The figure be ...

Financial Performance & Guidance - Q1 2024 revenue was $38.8 million, approximately flat compared to Q1 2023[5, 83] - Q1 2024 Non-GAAP gross margin was approximately 33%, compared to 26% in Q1 2023[83] - PacBio expects full-year 2024 revenue to be between $170 million and $200 million[12, 64] - Non-GAAP operating expenses for 2024 are expected to decline compared to $355 million in 2023, landing between approximately $300 million and $310 million[86] - The company anticipates non-GAAP annualized restructuring savings to exceed $75 million by the end of the year[69] - PacBio projects ending cash, cash equivalents, and investments to be between $435 million and $450 million, representing a cash burn of $189 million at the midpoint[69] Business Updates - Consumable revenue increased by 15% year-over-year, but fell short of expectations[17, 83] - Instrument revenue was $19.0 million, a decrease of 8% year-over-year[83] - The installed base of Revio systems reached 201 as of March 31, 2024, with 28 new installations since December 31, 2023[63] - PacBio is focused on four strategic priorities, including improving commercial execution, reducing operating expenses, continuing platform development, and expanding gross margins[31, 58, 59, 80, 81, 103] - Long-read data generated from PacBio sequencers increased by approximately 2.5x year-over-year, indicating continued market share gain for long-reads[50]

For the quarter ended March 2024, Pacific Biosciences of California (PACB) reported revenue of $38.81 million, down 0.2% over the same period last year. EPS came in at -$0.26, compared to -$0.31 in the year-ago quarter.The reported revenue represents a surprise of +0.08% over the Zacks Consensus Estimate of $38.78 million. With the consensus EPS estimate being -$0.26, the company has not delivered EPS surprise.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings - ...

Pacific Biosciences of California (PACB) came out with a quarterly loss of $0.26 per share in line with the Zacks Consensus Estimate. This compares to loss of $0.31 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this maker of genetic analysis technology would post a loss of $0.31 per share when it actually produced a loss of $0.27, delivering a surprise of 12.90%.Over the last four quarters, the company has surpassed consensus EPS estimates three ...

Revenue Performance - Revenue for the three months ended March 31, 2024, decreased slightly to $38.8 million, compared to $38.9 million for the same period in 2023[119]. - Instrument revenue decreased by $1.7 million, or 8%, to $19.0 million, primarily due to the sale of 28 Revio systems compared to 32 in the prior year[126]. - Consumables revenue increased by $2.0 million, or 15%, to $16.0 million, driven by higher Revio consumables sales[127]. Profitability and Loss - Gross profit increased by $1.5 million, or 16%, to $11.3 million, with a gross margin of 29% for the three months ended March 31, 2024, compared to 25% in the prior year[130]. - Operating loss decreased by $9.9 million, or 11%, to $81.4 million for the three months ended March 31, 2024[124]. - The company reported a net loss of $78.2 million for the three months ended March 31, 2024, compared to a net loss of $88.0 million for the same period in 2023[146][147]. Expenses - Research and development expenses decreased by $5.5 million, or 11%, to $43.5 million, primarily due to restructuring activities[131]. - Sales, general, and administrative expenses increased by $3.9 million, or 10%, to $43.8 million, driven by an increase in personnel expenses[132]. Cash Flow and Investments - Cash used in operating activities was $75.7 million for Q1 2024, a decrease from $94.7 million in Q1 2023, indicating improved cash flow management[144][146][147]. - Cash used in investing activities for Q1 2024 was $34.1 million, significantly lower than $72.6 million in Q1 2023, reflecting a strategic shift in investment[144][149]. - The company provided $6.6 million in cash from financing activities in Q1 2024, compared to $195.9 million in Q1 2023, indicating a decrease in capital raised[144][150][151]. Cash Position - Cash, cash equivalents, and short-term investments were $561.9 million at March 31, 2024, representing an 11% decrease compared to December 31, 2023[119]. - As of March 31, 2024, the company had cash, cash equivalents, and investments totaling $561.9 million, down from $631.4 million as of December 31, 2023[139]. Future Outlook and Initiatives - The company plans to reduce certain annualized run-rate operating expenses by the end of 2024, including workforce reductions and facilities downsizing[117]. - The company implemented efficiency and expense reduction initiatives expected to lower annualized operating expenses by the end of 2024[141]. - The median sales cycle for Revio instrument purchases increased more than expected, attributed to funding uncertainties and procurement delays[121]. - The company expects to achieve a milestone payment of $25.0 million upon reaching $50 million in revenue from Apton's technology within five years of the acquisition[135][143]. Investment Portfolio and Interest Expenses - The fair value of the company's investment portfolio could be affected by a hypothetical 100 basis-point change in interest rates, impacting it by approximately $3.1 million[161]. - The company incurred interest expenses of $3.6 million for both Q1 2024 and Q1 2023, primarily related to convertible senior notes[137]. - The company achieved a milestone payment of approximately $100.9 million in cash and 9.0 million shares to former Omniome securityholders following a milestone achievement in September 2023[134].

[Q1 2024 Performance Summary](index=1&type=section&id=Q1%202024%20Performance%20Summary) PacBio's Q1 2024 revenue was nearly flat at $38.8 million due to delayed instrument purchases, though gross margin improved and net loss narrowed Q1 2024 Revenue Breakdown (vs. Q1 2023) | Revenue Category | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Instrument Revenue | $19.0M | $20.7M | -8.2% | | Consumables Revenue | $16.0M | $14.0M | +14.3% | | Service & Other Revenue | $3.8M | $4.2M | -9.5% | | **Total Revenue** | **$38.8M** | **$38.9M** | **-0.3%** | Q1 2024 Key GAAP Financials (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Gross Profit | $11.3M | $9.8M | | Gross Margin | 29% | 25% | | Operating Expenses | $92.6M | $101.0M | | Net Loss | $(78.2)M | $(88.0)M | | Net Loss Per Share | $(0.29) | $(0.36) | Q1 2024 Key Non-GAAP Financials (vs. Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Non-GAAP Gross Profit | $12.6M | $9.9M | | Non-GAAP Gross Margin | 33% | 26% | | Non-GAAP Operating Expenses | $87.2M | $88.7M | | Non-GAAP Net Loss | $(71.4)M | $(75.5)M | | Non-GAAP Net Loss Per Share | $(0.26) | $(0.31) | - Key operational updates include the selection of the Revio system by the University of Tartu for a 10,000-genome project, the launch of the PureTarget repeat expansion panel for neurological disorder research, and the initiation of a significant cost reduction program[10](index=10&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management attributed Q1 revenue miss to delayed instrument purchases, focusing on commercial execution, product pipeline, and a cost-reduction plan for positive cash flow by 2026 - Management cited delayed instrument purchases as the primary reason for missing revenue expectations, although consumables revenue grew **15%** year-over-year[11](index=11&type=chunk) - Strategic priorities include improving commercial execution and developing new products such as a benchtop long-read platform and high-throughput short-read and long-read platforms[11](index=11&type=chunk) - The company has taken swift action to reduce its cost structure, including a headcount reduction of **195** employees. This is expected to lower the non-GAAP annualized expense run rate by more than **$75 million** by the end of 2024[11](index=11&type=chunk) - These cost-saving measures are part of a broader plan to achieve positive cash flows by the end of **2026**, consistent with the company's long-term guidance[11](index=11&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents unaudited condensed consolidated financial statements for Q1 2024, including the Statement of Operations, Balance Sheets, and GAAP to non-GAAP reconciliations [Unaudited Condensed Consolidated Statement of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Operations) Q1 2024 total revenue was $38.8 million, with gross profit improving to $11.3 million, and net loss narrowing to $78.2 million Q1 2024 Statement of Operations Highlights (in thousands) | Line Item | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenue | $38,810 | $38,900 | | Gross Profit | $11,282 | $9,761 | | Total Operating Expense | $92,644 | $101,013 | | Operating Loss | $(81,362) | $(91,252) | | Net Loss | $(78,178) | $(88,015) | | Net Loss Per Share (Basic) | $(0.29) | $(0.36) | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, PacBio reported $561.9 million in cash and investments, with total assets at $1.67 billion and liabilities at $1.02 billion Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and investments | $561,914 | $631,416 | | Inventory, net | $67,343 | $56,676 | | Total Assets | $1,669,920 | $1,746,013 | | Convertible senior notes, net | $892,545 | $892,243 | | Total Stockholders' Equity | $649,017 | $701,304 | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP figures, showing a Q1 2024 non-GAAP net loss of $71.4 million after adjustments Q1 2024 GAAP to Non-GAAP Net Loss Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | **GAAP net loss** | **$(78,178)** | | Change in fair value of contingent consideration | $(70) | | Amortization of acquired intangible assets | $6,849 | | **Non-GAAP net loss** | **$(71,399)** | Q1 2024 GAAP to Non-GAAP Gross Profit Reconciliation (in thousands) | Description | Amount | | :--- | :--- | | **GAAP gross profit** | **$11,282** | | Amortization of acquired intangible assets | $1,343 | | **Non-GAAP gross profit** | **$12,625** | [Disclosures](index=2&type=section&id=Disclosures) This section explains PacBio's use of non-GAAP measures for comparability and internal planning, alongside forward-looking statements detailing risks and uncertainties - PacBio reports non-GAAP measures because it believes they provide consistency and comparability with past financial performance, and uses them for internal forecasting and strategic planning[14](index=14&type=chunk)[15](index=15&type=chunk) - The report contains forward-looking statements concerning cost-saving plans, financial guidance, and new product impacts. These are subject to risks such as competition, supply chain interruptions, and potential product performance issues[17](index=17&type=chunk)