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Pacific Biosciences Plans Sequencing Updates, Enters New Collaborations

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NEW YORK – Pacific Biosciences this week announced plans to further improve its sequencing technology, along with new and expanded research collaborations.

Specifically, the company plans to make updates to its Sequel II and IIe sequencing kits and software. It will also collaborate with Google Health on basecalling algorithms and partner with Singapore's KK Women's and Children's Hospital to study neurodevelopmental disorders, and it has expanded its existing collaboration with ARUP Laboratories.

The new sequencing kits "will cut the upfront workflow time nearly in half, require customers to order and store fewer materials, and lower DNA input requirements even further," CEO Christian Henry said Tuesday on a conference call with investors following the release of the firm's fourth quarter financial results. The software upgrade will enable direct methylation detection on the Sequel IIe.

The updates come as PacBio reported having a "transformative" year in 2021, nearly doubling its installed base of long-read sequencing instruments compared to a year ago. But early trends from January suggest that utilization of those instruments has slowed, due to COVID-19 and macroeconomic conditions, and PacBio officials issued Q1 and full-year 2022 revenue guidance below the consensus Wall Street estimate.

"The company's [Q1] and 2022 revenue guidance ranges are somewhat disappointing compared to PacBio's performance in 2021," Canaccord Genuity analyst Kyle Mikson wrote in a note to investors. "However, we believe it is too early to assume the company has lost its momentum just yet."

The sequencing upgrades are slated to be available in April, a year after the company launched its Version 10.1 sequencing kits, which featured a new polymerase that cut DNA input requirements, among other improvements.

The new kits will lower DNA input even further: "We anticipate that DNA input requirements for whole-genome sequencing will be decreased fivefold relative to what it was just one year ago, to just 1 µg per SMRT Cell in human whole-genome applications," Henry said.

PacBio will also upgrade its software, enabling all Sequel IIe instrument to do on-instrument methylation detection "with no additional cost or workflow steps," Henry said. Researchers at Children's Mercy Hospital with early access to this feature have reported uncovering a long repeat expansion as well as hypermethylation in the DMPK gene of a patient diagnosed with that type of muscular dystrophy, he said. "Further, the team believed that directly and accurately connecting genetics and epigenetics with the same HiFi workflow could have significant near-term applicability in medical genomics."

Collaborations

Henry added that the firm has begun working with Google Health to codevelop deep learning-based methods to improve raw base accuracy. "With small improvements to our raw read accuracy, we can shorten our run times, increase our throughput, and allow for even greater consensus accuracy," he said.

In a separate announcement on Wednesday, PacBio said it is collaborating with Singapore's KK Women's and Children's Hospital on a study of the genetic causes of unexplained neurodevelopmental disorders.

Researchers in the Bringing Research Innovations for the Diagnosis of Genetic Diseases in Singapore program will use HiFi long-read sequencing to investigate its effects on diagnostic yield in unresolved cases. Only 39 percent of such cases have been resolved using short-read sequencing, the partners said in a statement.

PacBio will also work with KKH to build a bioinformatics pipeline optimized for HiFi long-read sequencing data analysis. Financial and other details of the collaboration were not disclosed.

The company is also expanding existing collaborations. "ARUP Laboratories, for example, will explore the use of HiFi whole-genome sequencing as part of the Utah NeoSeq Project, which is a project that aims to provide genetic diagnosis for patients in the neonatal intensive care unit," Henry said.

Other technologies

PacBio's incorporation of Omniome, following the $800 million acquisition of that firm last year, continues to progress well, Henry said.

Toward the end of 2021, the company implemented a new clustering method for Omniome's sequencing-by-binding chemistry. "We are now consistently observing exquisite accuracy on our alpha systems with over 90 percent of the reads at Q40 levels, or above one error in every 10,000 bases," Henry said. "The team is working diligently to incorporate these advancements into beta systems that we expect will output greater than 120 gigabases per flow cell."

He added that the company expects to place beta systems with customers in the second half of 2022 and launch the sequencer globally in the first half of 2023.

During the Q&A session, Henry addressed questions from analysts about looming competition in the long-read sequencing market from Illumina and its Infinity synthetic long read product in development.

"Stitched-together short reads are not really a solution for clinical sequencing. [They're] just not, when you can get more information out of a native long read, whether it's us or any long read," Henry said. "And if you can do [this] economically, there's no reason to stitch together short reads," he said. "I don't think that this has a material impact on our future."

Even if researchers initially bypass PacBio's long-read offering, they could be "inspired" to become customers, he suggested. "[It] gives us an opportunity to sell into those customers when they start to get serious … So from that perspective, it will expand our market to be sure."

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