Pacific Biosciences of California, Inc. (NASDAQ:PACB) Q1 2023 Earnings Call Transcript

So I think when you look out towards the remainder of this year, our objective is to, of course, do better than what we did for orders in Q1, but it may be lumpy from quarter to quarter. But on balance, I see that growing over the course of the year and into next year.

Operator: Thank you. The next question will come from Tejas Savant from Morgan Stanley. Please go ahead.

Tejas Savant: Hey, guys. Good evening. So, Christian, one on the hardware side and then a couple of the consumables. So on the instrument side for the Revio, can you just walk us through what your key learnings were in terms of the customer feedback you received during that April shipment pause that you had called out earlier in the year? And then on the consumable side of things, you’ve talked about sort of max pull-through on the box being about 400k or so, so about 30%, 35% of the max pull-through rather. Any early insights from these placements around the slope of that ramp? Is this sort of a two-year dynamic in your mind or could it be sort of more of a longer-term thing? And then my final sort of consumables question here is, can you just share some color around the process and duration of the workflow for long-read sequencing?

I mean, you highlighted the new Nanobind Extraction Kits, but are there any other sort of key areas you feel you need to do work in to support the higher throughput that the Revio enables? Thank you.

Christian Henry: Yeah, Tejas. Thank you for the questions. So the pause was quite modest, quite frankly. We were excited to continue shipping because the system is performing so well. But the key learnings were, there were some software issues that any launch will typically have. So we did some patches for bug squashing, which are mostly behind us now. We also just wanted to see how the first runs would be going in the field. And as I’ve said probably too many times already on this call, the runs have gone really well and we’re seeing above-spec output generally across all of our customers. We are seeing, one of the challenges, I guess if there was one, I would point out is that the loading characteristics of loading your DNA onto the SMRT Cell to get the optimal performance out of the 25M SMRT Cell is a little bit different than the 8M.

So our customers have been getting up to speed, basically for their sample type or their application, optimizing the amount of DNA loading that has to happen. So that’s that scenario where we probably have learned a little bit and perhaps can put some new processes in place to make that better. And particularly, as we scale to even higher density SMRT Cells down the road, we’ll take that learning and implement it into our development program. So those are some of the things. On balance, the launch is going extremely well, it’s actually been excellent. And I think customers so far are pretty darn satisfied. With any particular — we’re still going to have run failures. Run failures are at our target spec right now, which is good. We actually think we can do better and over the course of this quarter, we’ll make further enhancements to the platform to decrease run failures.