About Pacific Biosciences of California

Pacific Biosciences of California, Inc. operates as a life science technology company. The company engages in designing, developing, and manufacturing advanced sequencing solutions that enable scientists and clinical researchers to improve their understanding of the genome and ultimately, resolve genetically complex problems. The company’s products and technology under development stem from two highly differentiated core technologies focused on accuracy, quality, and completeness, which include the company’s existing HiFi long-read sequencing technology and the company’s emerging Sequencing by Binding (SBB) short-read sequencing technology. The company’s products address solutions across a broad set of applications, including human genomics sequencing, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications. The company’s focus is on providing its customers with advanced sequencing technologies with higher throughput and improved workflows that will enable dramatic advancements in routine healthcare. The company’s customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations (CROs), pharmaceutical companies, and agricultural companies. On October 25, 2022, the company announced two new sequencing platforms, Revio and Onso. Revio is a new long-read sequencing system designed to enable the use of HiFi sequencing for large studies in human genetics, cancer research, and agricultural genomics. The company began taking orders for Revio in the fourth quarter of 2022 and expects to commence commercial Revio shipments in March 2023. Onso, a short-read DNA sequencing system, is designed to deliver industry-leading sensitivity and specificity for novel insights in oncology, disease research, and other applications. The company commenced the beta program for Onso in the fourth quarter of 2022. The company began taking orders for Onso during the first quarter of 2023 and remain on track for commercial shipment in the second quarter of 2023. Principal Markets Researchers utilize the company’s solutions in human genomics, plant and animal sciences, infectious disease and microbiology, oncology, and other emerging applications. Technology, Products, and Solutions The company has developed HiFi long-read sequencing based on Single-Molecule Real-Time (SMRT) technology, which accurately detects the nucleotide sequence and epigenetic status of individual DNA molecules. The company is also expanding its genomic solutions with its short-read SBB chemistry, which offers sensitive sequencing for short-read applications. Upon launch of the SBB platform, the company will be the only company offering both native long-read and native short-read technologies into the market. The company’s sales consist of sequencing instruments, nanofluidic chips (SMRT Cells), and reagents for preparing DNA and performing sequencing based on its SMRT technology; reagents for DNA extraction based on the company’s nanobind technology; and the services the company performs for customers. HiFi Long-Read Sequencing The company’s HiFi long-read sequencing protocol was built upon the company’s SMRT sequencing systems, including consumables and software, and offers customized end-to-end workflows for different sequencing applications. Highly accurate, long sequence reads simplify and accelerate data analysis algorithms, reducing the needs for error correction steps and/or assembly aspects, depending on the application. Customers use the company’s HiFi long-read sequencing platforms in a wide range of sequencing applications, including whole genome sequencing and de novo genome assembly, long-range phasing, targeted sequencing, full-length RNA and single-cell sequencing, characterization of metagenomic communities and other mixed DNA samples, viral genome sequencing, and others. The company’s technology is also capable of detecting epigenetic markers simultaneously by analyzing the kinetics of DNA polymerization that is affected, and thereby detectable, by epigenetic markers, such as 5-methylcytosine or N6-methyladenine. SMRT Technology The company’s proprietary SMRT Technology enables the observation of DNA synthesis as it occurs in real time by harnessing the natural process of DNA replication, which in nature is a highly efficient and accurate process actuated by DNA polymerases. DNA polymerases attach to a strand of DNA to be replicated, examine the individual base at the point it is attached, and then determine which of the four building blocks, or nucleotides (A, C, G, or T), is required to complement that individual base. After determining which nucleotide is required, the polymerases incorporate that nucleotide into the growing strand being produced. SMRT Sequencing is based on following the activity of DNA polymerase on individual DNA molecules in real time that occurs on the company’s SMRT Cells that are monitored and analyzed within the company’s HiFi long-read sequencing systems: the Revio system, Sequel II system, Sequel IIe system, and Sequel system. Carried out on SMRTbell templates, which attach hairpin adapters to the ends of double-stranded DNA molecules to be sequenced, SMRT sequencing allows for the successive sequencing of both the forward and reverse strands of the individual DNA molecule occurring multiple times, thereby allowing for the same base of the same molecule to be sequenced more than once in a sequencing run. HiFi Long-Read Sequencing Instruments: Revio system + Sequel Systems The company’s Revio, Sequel, Sequel II, and Sequel IIe instruments conduct, monitor, and analyze single-molecule biochemical reactions in real time. The instruments use extremely sensitive imaging systems to collect the light pulses emitted by fluorescent reagents allowing the observation of biological processes. Computer algorithms are used to translate the information that is captured by the optics system. Using the recorded information, light pulses are converted into either an A, C, G, or T base call with associated quality metrics. Once sequencing is started, the real-time data is delivered to the system’s primary analysis pipeline, which outputs base identity and quality values. HiFi Consumables Customers purchase proprietary consumable products to run their PacBio systems, including the company’s SMRT Cells and reagent kits. One SMRT Cell is consumed per sequencing reaction, and scientists can choose the number of SMRT Cells they use per experiment. The company offers several reagent kits, each designed to address a specific step in the core sequencing workflow. A library preparation kit is used to convert DNA into SMRTbell double-stranded DNA library formats and includes typical molecular biology reagents, such as ligase, buffers, and exonucleases. The company’s binding kits include its modified DNA polymerase and are used to bind SMRTbell libraries to the polymerase in preparation for sequencing. The company’s core sequencing kits contain reagents required for on-instrument, real-time sequencing, including phospholinked nucleotides. The company has also developed and offers the Multiplexed Arrays Sequencing (MAS-Seq) 3’ kit to enable cost-effective long-read single-cell RNA sequencing for a more complete interrogation of the transcriptome. The MAS-Seq kit takes single-cell cDNA as an input and outputs a sequencing-ready library, which enables researchers to move beyond gene counting to get full-length isoform information, characterize the full diversity of transcript isoforms at the single-cell level and ultimately reveal cell type-specific spliced isoforms and expressed variants. In addition, the company offers HiFiViral for SARS-CoV-2, its first fit-for-purpose, end-to-end solution for COVID-19 genome sequencing. This solution uses a differentiated molecular inversion probe (MIPs) design that is robust to the emergence of new variants in the COVID-19 genome and allows for detection of all known classes of variation across the entire viral genome. Both characteristics are required for efficient and effective public health surveillance programs battling the COVID-19 pandemic. The solution also includes fit-for-purpose software that enables automated variant calling and preparation of files for submission into public databases tracking the evolution of the COVID-19 genome. SBB Short-Read Sequencing The company’s proprietary SBB approach will enable researchers to address the gap in detecting rare variants, especially in complex heterogenous samples. Employing a two-phase sequencing chemistry, the SBB approach binds a dye-labeled nucleotide without incorporation into the DNA chain, then removes that base, then blocks and extends with a terminated nucleotide. Using nucleotides with single modifications, the company incorporates more native bases, avoiding potential scarring due to fluorescent linker presence. This design helps avoid raw errors and can help the company develop a product with substantially greater accuracy than marketed short-read sequencing products. SBB enables simplified upfront library preparation, redefines coverage requirements, and reduces bioinformatic workload for downstream analysis. The accuracy of the company’s novel sequencing approach has the potential to advance translational cancer research, drive higher fidelity single-cell applications, and broadly enable clinical sequencing—even in regions of the genome prone to sequencing errors with other short-read sequencing technologies. SBB Short-Read Sequencing Instrument: Onso system The company’s Onso instrument, under development, conducts, monitors, and analyzes SBB biochemical reactions. The instrument uses extremely sensitive imaging systems to collect the light emitted by fluorescent reagents allowing the observation of biological processes. Computer algorithms are used to translate the information that is captured by the optics system. Using the recorded information, light pulses are converted into either an A, C, G, or T base call with associated quality metrics. Once sequencing is started, the imaging data is delivered to the system’s primary analysis pipeline, which outputs base identity and quality values. SBB Consumables After Onso’s anticipated launch in the second quarter of 2023, the company’s SBB consumable products will be available for purchase, including flow cells, clustering, and sequencing reagent kits. One flow cell and associated sequencing reagent pack is consumed per sequencing reaction. Each flow cell contains two lanes and scientists can choose to sequence different samples in each lane while additionally combining any number of flow cells needed per experiment. The company intends to offer several reagent kits, each designed to address a specific step in the core sequencing workflow. A library preparation kit is used to convert DNA into SBB compatible, double-stranded DNA library formats and includes typical molecular biology reagents, such as ligase, buffers, and exonucleases. Additionally for library preparation, the company’s conversion kits include reagents to enable scientists to convert existing sequencing libraries into an SBB compatible format. Finally, the company’s clustering and sequencing kits contain all reagents required for generating sequence ready clusters on flow cell and performing SBB sequencing reactions on instrument, respectively. Strategy for Growth To enable the promise of genomics, the company’s strategy includes the following key elements: driving rapid adoption of Revio by converting existing Sequel II/IIe customers and attracting new PacBio customers; demonstrating Onso’s extraordinary level of accuracy in the field and show how it can transform research in needle-in-haystack applications; progressing development of ultra-high-throughput and bench top long-read sequencers and next generation SBB short-read sequencer; leveraging current infrastructure to drive toward positive cash flow; and expanding partnerships across ecosystem and workflow to drive customer adoption of SBB short-read sequencing and HiFi long-read sequencing. Marketing, Sales, Service, and Support The company markets its products through a global sales force and through distribution partners in Asia and Australia, certain parts of Europe, the Middle East and Africa, and Latin America. The company plans to continue to invest in growing its marketing, sales, service, and support resources as the company drives continued adoption of products, launch new products, and expand the company’s customer base. Customers The company’s customers include academic and governmental research institutions, commercial testing and service laboratories, genome centers, public health labs, hospitals and clinical research institutes, contract research organizations (CROs), pharmaceutical companies, and agricultural companies. In general, the company’s customers will isolate, prepare, and analyze genetic samples using PacBio sequencing systems in their own laboratories, or they will send their genetic samples to third-party service providers who in turn will sequence the samples with PacBio systems and provide the sequence data back to the customer for further analysis. For example, customers in academic research institutions may have bacteria, animal, or human DNA samples isolated from various sources while agricultural biology companies may have DNA samples isolated from different strains of rice, corn, or other crops. The majority of the company’s customers are early adopters of sequencing technology. By focusing the company’s efforts on high-value applications, and developing whole product solutions around these applications, the company seeks to drive the adoption of its products across a broader customer base and into numerous large-scale projects. Intellectual Property As of December 31, 2022, the company owned or held exclusive licenses to 406 issued U.S. patents, 100 pending U.S. patent applications, 396 granted foreign patents, and 158 pending foreign patent applications, including foreign counterparts of the U.S. patent and patent applications. The full term of the issued U.S. patents will expire between 2023 and 2041. The company also has non-exclusive patent licenses with various third parties to supplement the company’s own large and robust patent portfolio. Government Regulation The company must comply with complex foreign and the U.S. laws and regulations, such as the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other local laws prohibiting corrupt payments to governmental officials, anti-competition regulations and sanctions imposed by the U.S. Office of Foreign Assets Control, and other similar laws and regulations. Research and Development The company’s research and development expenditures were $193.0 million in 2022. History Pacific Biosciences of California, Inc. was founded in 2000. The company was incorporated in the state of Delaware in 2000.