By Monica Heger
Pacific Biosciences said today that it has had to cut approximately 130 employees, or 28 percent of its workforce, in response to "uncertainties associated with the economic environment" and a slower-than-projected adoption rate of its PacBio RS.
The company did not disclose specifics about the cuts, but operations and research and development were most affected. Hugh Martin will remain CEO and Eric Schadt will remain chief scientific officer.
In a statement, Martin said that PacBio had "higher expectations as to the rate with which adoption would occur" and noted that the company's infrastructure "was therefore built to handle a faster generational transition."
As a result he said, "our burn rate was not in line with the speed with which the business was evolving."
He added that the company will continue to support its current and future customers and to improve the performance of the SMRT technology.
A company spokesperson told In Sequence via e-mail that PacBio is still planning to launch its C2 chemistry in the fourth quarter, which would enable increased read lengths to an average of 2,700 base pairs, a single-pass accuracy of 87 percent, and a double-pass circular consensus accuracy of 93 percent. The upgrade would also double throughput to 90 megabases per SMRT cell.
Following PacBio's second-quarter earnings call in August, some analysts expressed concern over the rate of uptake of the RS, lowering their revenue projections for future years (IS 8/9/2011).
PacBio took orders for seven instruments in the second quarter and reported a backlog of 35 instruments, with projected 2011 revenue of $35 million. The spokesperson declined to provide an update on orders placed since August or revised revenue estimates.
The company currently has a cash balance of around $190 million and the cuts will give it "time and flexibility to drive adoption of our product," Martin said in the statement.
As a result of the reductions, the company expects to record a restructuring charge of around $5.2 million in the third quarter.
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