Pacific Biosciences is reducing both headcount and spending across its DNA sequencing business, in the face of escalating global tariffs and threats to federal biomedical research grants.
Looking to get its earnings out early, PacBio posted preliminary revenue estimates this week ahead of its full quarterly report scheduled for May 8. The company said it collected $36.9 million in sales for the first three months of this year—down nearly 5% compared to the year before, but in line with its expectations despite the most recent actions of the Trump administration.
This week the White House increased its duties on imports from China to 104%—amid new tariffs taking effect worldwide—while the country retaliated by increasing its own levies on U.S. goods to a cumulative 84%.
China also recently banned incoming shipments of Illumina’s DNA sequencers, and that manufacturer said it would be forced to cut $100 million in costs in response.
“We believe we are on pace to achieve the financial goals we set earlier this year,” CEO Christian Henry said in a statement. “However, given the persistent uncertainty surrounding academic and NIH funding, along with the introduction of new tariffs, we are taking strategic steps to reduce spending and reinforce our plan to reach positive cash flow by the end of 2027.”
That includes cutting annualized operating expenses by $45 million to $50 million, down from its prior forecasts of $270 million to $280 million in costs. The company also stuck to its previous revenue guidance, with full-year 2025 sales landing between $155 million and $170 million.
Going forward, PacBio said it will “focus on its highest-impact long-read platform development initiatives” via its HiFi sequencing instruments, including the Vega benchtop analyzer announced last fall. The company previously unveiled its first short-read DNA sequencer, the Onso, in late 2022.
“We are also restructuring our commercial organization to streamline management and improve sales force efficiency, while maintaining our commitment to serving customers across all segments and product lines,” said Henry. PacBio’s stock price jumped as much as 16% in opening trading following the news.
The company said it has seen growing adoption of its Vega system among new and existing customers following its commercial rollout last quarter; it offers the same functionality of its Revio sequencer, but with a lower throughput, smaller footprint and more affordable list price of $169,000.
PacBio said it expects new Vega shipments to offset year-over-year declines in Revio instrument sales—while currently installed Revios continue to bring in about $236,000 apiece in annual consumable purchases, pushing total recurring revenue to a new company record.
For the first quarter of this year, total instrument sales fell to $10.8 million, down from $19.0 million, with 28 Vega and 12 Revio placements versus the 28 Revios installed in the first three months of 2024. Consumable revenue, meanwhile, increased to $20.1 million compared to $16.0 million, and services grew to $6.0 million over $3.8 million.
Nearly one year ago, PacBio announced a plan to reduce expenses by $50 million to $75 million by the end of 2024, after underperforming international instrument sales and slower-than-expected usage of machines delivered to first-time buyers.