SAN FRANCISCO (GenomeWeb) – Pacific Biosciences said that it introduced a software upgrade to its Sequel system which has increased read lengths and throughput, and that it is planning additional improvements to sample prep, chemistry, and software throughout the year that should double average throughput.
In addition, PacBio CEO Mike Hunkapiller said during a conference call discussing the firm's second quarter results that the firm is looking at the potential of forming a clinical distribution agreement with another company, in particular, one based in China.
Hunkapiller said that the firm released a software update last month that improves analysis of structural variants and minor variants. In addition, it also includes improved protocols for amplicon sequencing. The new release, Version 5.0, has already resulted in major improvements for some customers, Hunkapiller said, particularly for amplicon sequencing. For instance, he said, one customer reported average read lengths of 33 kilobases, while another achieved 15 gigabases of sequence data from one SMRT cell. Hunkapiller acknowledged that those customers were "on the high end," but said that average reads of 20 kb as well as throughput of 10 Gb per SMRT cell are "becoming quite common." He anticipated that most Sequel customers would be upgraded to the new software this quarter.
When PacBio first launched Sequel in 2015, it said the system would deliver average read lengths of 8 kb to 12 kb with average throughput of 7 Gb per SMRT cell. However, it wasn't until last year that customers routinely achieved those numbers, once PacBio implemented updates and switched from its prototype chip manufacturer to its high-volume manufacturer.
Hunkapiller said that PacBio is also planning to introduce additional sample prep, chemistry, and software updates this year in order to further increase read lengths and throughput. For instance, he said, the firm is working on a sample prep kit that will decrease the time and labor and "improve the overall quality of long insert libraries used in de novo genome assembly and structural variant analysis." In addition, new chemistry that will be released by the end of the year will increase reads for all sample types and increase the number of reads per SMRT cell.
As previously reported, PacBio is also developing a new version of its chip that will have eight times the capacity of the current chip, which Hunkapiller said was on schedule to be released by the end of 2018.
Eventually, the new chip will enable a high-quality human genome to be sequenced for $1,000 and will enable low-pass sequencing for structural variant analysis to be done for $100, Hunkapiller said.
Similar to the last few quarters, PacBio has continued to see business in China grow. Overall, sales to Chinese customers now represent around 25 percent of PacBio's total sales, Hunkapiller said.
The ramp in China contrasts with sales in the US, where many government-funded agencies have delayed Sequel system orders due to concerns about funding. Hunkapiller said that although funding concerns there have somewhat dissipated as evidenced by a couple orders in Q2 from US government-funded entities, agencies are still trying to get a sense of what's going to happen in 2018 "before they pull the trigger."
This week, Chinese service provider Novogene said it planned to purchase 10 Sequel instruments, adding to the 10 it already has, making it PacBio's largest customer.
Hunkapiller said that Novogene quickly ramped up utilization of its first 10 Sequel instruments, so he expected the same for the next set of instruments. Novogene is using the Sequel for a number of large-scale studies. It has partnered with the Global Ant Genomics Alliance to sequence 300 species of ant on the Sequel. It also plans to use the Sequel to sequence 1,000 Chinese individuals and construct a database of structural variants, Novo-Disease SV Genomes.
Hunkapiller said that PacBio has been working with Novogene, providing them with early access to its upcoming simplified sample prep protocol and structural variant analysis.
Hunkapiller also noted that the firm is interested in forging clinical distribution partnerships, and said that such a partnership could potentially occur with a Chinese company.
Ben Gong, PacBio's vice president of finance and treasurer said during the conference call that the firm "may want to have flexibility to enter into a clinical distribution agreement with a partner who would also like to take an equity position." As such, he said, the company raised $65 million in Q2 2017 through a combination of a follow-on stock offering as well as through its ATM facility, and also filed a new S3 shelf in case it wants to raise additional capital. Gong added that the company is not currently negotiating a clinical distribution agreement, but said that it is interested in doing so with a partner that could "provide assistance in obtaining local regulatory approvals for marketing and selling our products for clinical applications."
Hunkapiller said that a Chinese company would be especially appealing both because the clinical market in China is large and growing, particularly with the government's investment in its precision medicine initiative. In addition, he said, due to the regulatory structure in China, it is often necessary to work with a Chinese company to bring instruments and assays through China Food and Drug Administration clearance. For instance, Illumina partnered with Berry Genomics in order to bring a version of its NextSeq platform and noninvasive prenatal assay through CFDA approval.