Pacific Biosciences (PACB) Goldman Sachs 46th Annual Global Healthcare Conference summary

Technology and innovation

• Focus on long-read sequencing with HiFi technology, enabling analysis of complex genomic regions and structural variations.

• Revio platform reduced genome sequencing cost from $3,000–$4,000 to $500, nearing short-read cost parity.

• Spark Chemistry, launched Q4 2024, increases output by 33% and lowers DNA input requirements, broadening sample compatibility.

• Development underway for multi-use smart cells to further lower costs and enhance Revio's value proposition.

• Paused high-throughput short-read development to focus on ultra-high throughput long-read systems, leveraging core strengths.

Market performance and customer segments

• Achieved record $20.1 million in consumable revenue in Q1, up 26% year-over-year, driven by strong Revio pull-through.

• Academic sector faces capital constraints, but consumable usage remains steady; Vega platform offers a lower-cost alternative.

• Clinical market now represents about 15% of the customer base, with notable adoption in genetic disease testing and carrier screening.

• International expansion includes distributor agreements in China for HLA and thalassemia testing using Vega.

• Over 50% of Vega customers in Q1 were new, supporting ecosystem growth and broader application adoption.

Financial strategy and outlook

• Targeting top-line growth by expanding clinical and biopharma use cases, aiming to increase market share from 2–3% to 5%.

• Gross margin expected to exceed 40% exiting 2024, driven by higher consumable mix, multi-use adoption, and manufacturing efficiencies.

• Annualized OpEx run rate to decrease by $45–$50 million, mainly from pausing short-read development and sales force restructuring.

• Cash position at $350 million, with debt maturities over four years out; proactive refinancing reduced principal and extended duration.

• Path to cash flow positivity by 2027–2028 relies on continued cost discipline, margin expansion, and leveraging existing technology investments.