1. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Short Interest as % of Shares Outstanding: 22%
Number of Hedge Fund Investors In Q2 2024: 18
Ark Invest’s Q2 2024 Stake: $45.5 million
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a medical devices company that makes and sells products such as gene sequencing systems, sequencing kits, and consumables. It has one of the most diversified portfolios when it comes to gene sequencing, as the firm sells both long and short sequencing products. However, the revolutionary nature of Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s products means that they might not be easily popular among users. At the same time, the high costs of developing these machines, which cost more than $700,000 in several cases, mean that the firm has to ensure a stable revenue flow to keep investors happy. Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s consumables business also tends to thrive when rates are low as it allows more biotechnology and high growth pharma firms to develop new products. The firm is yet to generate an operating profit and management expects the business to turn cash flow positive in 2026.
Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s management shared key details for cost control, which should drive its hypothesis until sales pick up, during the Q2 2024 earnings call:
“As we discussed, we have made significant progress on improving the per unit production costs of both Revio instruments and Revio consumables, and expect both to end the year approximately 20% lower than when we launch the platform. We anticipate that these costs and operational improvements will continue beyond 2024 and are expected to drive quarterly growth margin expansion this year and going forward. However, our total growth margins in the second half may fluctuate quarter-to-quarter based off on product mix, customer project mix, and ASP. Moving to operating expenses, we remain diligent in our efforts to lower cash burn and spend profile and expect non-GAAP operating expenses to be around the lower end of our 300 million to 310 million range.”
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