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Uptick in PacBio RS II Sales Driven by Agbio, Human Sequencing Customers


NEW YORK (GenomeWeb) –As Pacific Biosciences continues to increase both the throughput and readlengths of its RS II sequencing system, the range of applications for which the single-molecule sequencing technology can be used continues to expand.

Increasingly, researchers are using the RS II to sequence plant, animal, and human genomes, CEO Mike Hunkapiller said during a conference call this week discussing the firm's 2014 Q4 and full-year results.

As a result, sales of the RS II are steadily growing. Pacific Biosciences said this week that it took orders for 10 systems in the last quarter of 2014, for a total of 40 for the year — 60 percent more than the 25 it booked in 2013. The company now has a total of 125 instruments installed.

In addition, Hunkapiller said that the company expects to reach a second development milestone earning it another $10 million in its agreement with Roche to develop a clinical sequencing system.

At the beginning of the fourth quarter in 2014, the firm launched new chemistry, P6-C4, that enabled average read lengths between 10,000 and 15,000 bases and throughput of up to 1 billion bases per SMRT cell.

Those enhancements have helped spur interest outside of the company's niche of bacterial and microbial genomics, Hunkapiller said.

"The traction we've gained in plant and animal sequencing has driven a significant amount of the increase in system utilization over the last two years," Hunkapiller said. "Agbio represents a large opportunity for us as we bring down the cost of SMRT sequencing."

Specifically, he said, at this year's Plant and Animal Genome conference in San Diego, 60 customers presented data on plant and animal sequencing. "The benefit of obtaining higher quality reference genomes for crops like spinach, rice, and cotton has resonated with many customers," Hunkapiller said.

Human sequencing, while still being done by a small portion of PacBio's customers, is one of the fastest growing applications, and interest in that area drove significant system sales in Q4, Hunkapiller said.

Researchers are looking to use PacBio sequencing to resolve complex regions of the human genome that cannot be assessed with shorter-read sequencing technology. For instance, Evan Eichler at the University of Washington recently showed that PacBio sequencing found an "astounding amount of information being missed by short-read sequencing technology," Hunkapiller said, adding that estimates indicate that up to 75 percent of the variation in the human genome is missed with short-read sequencing technology.

"The demand for high-quality human sequencing is continuing to grow for applications in cancer research, immunology, and other biomedical research," Hunkapiller said. Although PacBio is "satisfying a very small portion of that demand today," it aims to capture a larger share of that market as it improves its technology, he said.

In Q3 2014, Hunkapiller said that users of Illumina's HiSeq X Ten were a new potential market for PacBio, noting at the time that Korean sequencing firm Macrogen and Craig Venter's startup Human Longevity — which were among the first customers to purchase a HiSeq X Ten system — had each ordered two RS II instruments.

This week, Hunkapiller acknowledged that X Ten users continue to be interested in PacBio for resolving structural variations, repetitive regions, and other hard-to-sequence areas of the human genome, but declined to provide further details.

Following the call, Piper Jaffray analyst William Quirk wrote in a note that the firm considers "X Ten users as a near-to-mid-term customer opportunity for PacBio" both for "new and incremental systems."

Quirk added that while Piper Jaffray is "encouraged with the continued uptake of RS IIs as well as increased consumable usage," it remains "on the sidelines due to anticipated competitive launches."

In 2015, Hunkapiller said the firm is targeting another four-fold increase in throughput to 4 gigabases per SMRT cell and will increase its average read lengths to between 15,000 to 20,000 bases.