JPM24: PacBio puts up 56% annual growth after 2023's long- and short-read DNA sequencer launches

After rolling out not one but two major DNA sequencing machine launches this past year, Pacific Biosciences has put forward massive gains in its quarterly and annual revenues.

In a preliminary look at its earnings during the J.P. Morgan Healthcare Conference in San Francisco this week, the company said it more than doubled its fourth-quarter sales compared to the year prior—logging $58.4 million, for a 113% increase over the $27.4 million collected in the last three months of 2022.

For the entirety of 2023, a $200.5 million haul amounted to 56% year-over-year growth. And PacBio said it expects this trajectory to continue: With a target of 40% to 50% annual growth, the company said it aims to break $500 million in annual revenue by the end of 2026. More specific financial forecasts for 2024 are slated for release next month, alongside the complete earnings report.

Following the March 2023 debut of its latest long-read sequencer, the Revio, PacBio was able to ship 173 systems before the end of December. Revio also accounted for a growing percentage of the company’s consumables revenue over the course of the year, taking over from its preceding Sequel II/IIe systems to claim about two-thirds of the $18.9 million brought in during the fourth quarter. At the same time, PacBio logged a 68% boost in the total petabases of genomic data generated by its systems in 2023.

“The hallmark of Revio is its unprecedented scale. It's 15 times more powerful than any sequencer that PacBio has launched in its history,” President and CEO Christian Henry said during the company’s conference presentation. “This gives us the ability to sequence over 1,000 human genomes per year at a price of under $1,000 per genome. So, we're finally unlocking the scalability and affordability required to do population-scale research.”

Meanwhile, the company’s first short-read platform, the Onso, began shipping in August 2023, and PacBio has been working to scale up its manufacturing.

Born out of the company’s $800 million acquisition of Omniome in July 2021, the Onso system is designed to compete with DNA sequencing giant Illumina’s short-read machines, which have enjoyed a massive international market share. 

With its multiple offerings, PacBio’s ultimate goal is to be able to address each potential customer’s needs across the spectrum of genetic testing and research, with long-read technology used for whole-genome studies and short-read approaches better suited to applications such as monitoring cancer recurrence in liquid biopsy tests or helping clinicians select the right therapies based on genetic mutations.

“I believe that you're going to see an incredible bifurcation of the sequencing market over the next five years,” said Henry. “You’re going to see perhaps up to half the market move to long reads, while the other half of the market continues on short reads.”

“And the reason for that is that virtually all germline genomic applications benefit from a more comprehensive view of the genome. It's just that simple,” he explained. “You can see parts of the genome that you can't see with short reads. … You can see methylation, you can see structural variation, you can see the dark regions of the genome.”

“I think that it could be almost as much as a 50-50 split,” Henry continued. “Now, could it end up being 60-40 or something like that? Sure, none of us have a crystal ball. But the message is that you're going to see long reads take a very significant swath of the market over the next five years.”