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Pacific Biosciences Raises Guidance on Strong Revio Launch Driving Record Q1 Revenues


NEW YORK – Pacific Biosciences on Tuesday raised its revenue forecast for 2023 based on strong early sales of its new Revio long-read sequencing instrument.

The firm shipped 32 Revio instruments in the first quarter, "surpassing expectations," CEO Christian Henry said on a call with investors following the release of the firm's financial results for the three months ended March 31, which saw revenues rise 17 percent year over year. "We're seeing customers transition to Revio faster than we predicted."

Those instruments went to customers in 10 countries around the world; all 32 have been installed and have completed their first runs.

"Early field performance has also exceeded expectations," Henry said. The instruments are averaging more than 90 Gb of sequencing output per SMRT cell, with many exceeding 100 Gb, he said. For example, GrandOmics, a China-based Revio customer, has reported an average of 102 Gb per SMRT cell, with a median Q score of 30 or better.

This first wave of new instruments already matches the total capacity for HiFi sequencing in the Sequel II and IIe installed base of more than 500 instruments, Henry noted.

PacBio also announced the first orders of its Onso short-read sequencing system and provided an update on its beta testing program.

On the strength of the Revio launch, PacBio increased its revenue expectations for the year to between $170 million and $185 million, from a previous range of $165 million to $180 million, representing growth between 33 percent and 44 percent. The lower end assumes a year-over-year decline in consumables as customers transition to Revio, while the high end assumes consumables revenues grow slightly, CFO Susan Kim said.

"We think this is likely conservative given [that] the wind down of legacy consumables revenue remains challenging to forecast," Canaccord Genuity Analyst Kyle Mikson wrote in a note to investors, adding that PacBio also shipped more Revio consumables than expected.

PacBio's revenues for the quarter were a record $38.9 million, up from $33.2 million in Q1 2022, beating analysts' average estimate of $34.4 million.

In Wednesday morning trading on the Nasdaq, shares of PacBio jumped 12 percent to $12.68.

Instrument revenue was $20.7 million, up 33 percent from $15.6 million a year ago, while consumables revenue was $14.0 million, up 10 percent from $12.7 million. Service and other revenue was $4.2 million, down 14 percent from $4.9 million a year ago.

Revenues from the Americas were flat at $19.1 million, and those from Europe, the Middle East, and Africa were $7.9 million, up 38 percent from $5.7 million a year ago, partially offset by 5 percent foreign exchange headwinds. Asia-Pacific revenues were $12.0 million, up 43 percent from $8.4 million, attributable to 43 percent growth in China as customers recovered from COVID-19 lockdowns and strong consumables revenues growth in Japan.

Besides the Revio sales, the company also placed six Sequel IIe systems in the quarter.

PacBio's net loss for the quarter was $88.0 million, or $.36 per share, compared to a net loss of $81.5 million, or $.37 per share, in the prior-year period. On an adjusted basis, loss per share was $.31, compared to a $.37 per share loss in Q1 2022, beating the consensus Wall Street estimate of a $.33 loss per share.

The firm's first quarter R&D expenses fell 8 percent to $48.9 million from $52.9 million in Q1 2022. Its SG&A expenses were flat, year over year, at $39.8 million.

The new Revio owners include commercial service providers, pharmaceutical firms, academic core labs, children's hospitals, and agricultural research labs, Henry said. In addition to GrandOmics, he mentioned the Australian Genome Research Facility and Weill Cornell Medicine's sequencing core by name. One-third of the instruments went to new-to-PacBio customers, a ratio he said is also seen in the remainder of the 2023 Revio sales pipeline.

Two customers, who Henry did not name, are planning to shift projects from short-read to long-read sequencing, he said, including a European genomic testing lab that will do long-read whole genomes instead of short-read exomes, and a Canadian hospital that has reallocated a portion of its short-read sequencing budget.

Revio is "reigniting" some legacy customers, Henry said, noting that Weill Cornell ordered its first PacBio instrument since the RSII.

During the Q&A portion of the call, he noted that there were some software issues during the launch, which he said are "mostly behind us now."

Henry noted that the Onso sequencer saw a successful rollout of the latest 2x150 bp paired-end chemistry among beta testers and that the company has completed its pilot manufacturing builds. "We're excited to share that the beta sites are seeing output that achieves our commercial specification of 800 million paired-end reads and regularly get over 90 percent of reads between Q40 and Q50," he said. PacBio has received its first orders for the instrument, he added, which will "likely" be available at the end of the second quarter.

As of March 31, the company had $874.9 million in cash and investments and $3.2 million in restricted cash, and it had 793 employees.

Kim noted that the firm expects to pay $200 million in cash and equity to former Omniome shareholders upon achievement of a milestone in connection with the commercial shipment of the Onso platform.