PacBio plans to reduce annualized operating expense run rate by $50M-$75M

CEO Christian Henry said, “Following the successful launch of the Revio system and a record 2023, we entered the year with optimism regarding our growth prospects. As we reached the last couple of weeks of the first quarter, however, we saw an increasing number of customers delay instrument purchases and we experienced some unexpected softness in consumable shipments. As a result, the first quarter came in below our original expectations. We expect these factors to have an impact on our 2024 performance, and we expect to provide further details on our full year outlook on our earnings call scheduled for May 9, 2024. Looking ahead, we are focused on four strategic priorities. First, improving commercial execution to drive adoption of both the Revio and Onso platforms; second, continuing the development of our benchtop long read and high throughput short-read platforms; third, implementing projects to improve our gross margin and drive manufacturing efficiencies; and finally, reducing annualized run-rate operating expenses on a non-GAAP basis by $50 million to $75 million by the end of 2024 in relation to our prior guidance of 5% operating expense growth. Despite these near-term headwinds, we remain highly encouraged by PacBio’s long-term growth potential. We are continuing to see new customers adopt Revio as evidenced by the fact that nearly 60% of our Revio placements in the quarter were to new customers. We are also starting to see significant traction with large-scale projects, such as the Estonia National Biobank project announced last month, the first Revio in Latin America to be used for a 1,000-sample whole genome project, and pediatric genome initiatives at hospitals in Canada and Korea. Additionally, we expect consumables to return to sequential growth going forward this year as we continue to grow the Revio installed base and see encouraging trends that point toward increased sequencing on the Revio system. It should be noted that March Revio utilization was at an all-time high – including some of our top customers exceeding our expectations. We have expanded the capabilities of the Revio platform through the roll-out of v13 software upgrade which has enabled our customers with more functionality and better performance. We’ve also recently launched new reagent kits that improve our customer workflows and launched our new Kinnex kits to continue to drive new customer adoption. I am confident in our ability to create value for all our stockholders and stakeholders. PacBio has some of the world’s most advanced sequencing technology and our customers continue to uncover insights into the genome unimaginable with other technologies.”