Pacific Biosciences of California (PACB) TD Cowen 45th Annual Healthcare Conference summary

Key priorities and innovation for 2025

• Focus on capitalizing recent product integration, targeting clinical markets and expanding relationships with major diagnostic customers.

• Continued innovation with two new sequencing platforms in development, including ultra-high-throughput short- and long-read sequencers.

• Expansion of the Vega platform, aiming for FDA clearance and broadening market reach, especially with new customers.

• Emphasis on gross margin expansion through reduced production costs and improved consumable yields.

• Guidance for 2025 anticipates a return to growth despite a highly uncertain environment.

Market dynamics and regional performance

• Guidance assumes 1-10% growth, with 15-20% of revenue exposed to NIH funding, and expects challenges in academic and capital markets.

• European market shows strong momentum, driven by clinical adoption and large-scale sequencing programs, offsetting U.S. academic headwinds.

• China remains challenging but stable due to a concentrated customer base and limited substitution for long-read sequencing.

• U.S. clinical market sees adoption in children’s hospitals and diagnostic labs, replacing legacy technologies and driving scaled opportunities.

Competitive landscape and technology differentiation

• Long-read sequencing demand is rising, with Spark Chemistry delivering throughput gains and enabling more sample types.

• Competitors are attempting to emulate long-read advantages, but cost reductions and unique capabilities (e.g., native long reads, epigenetics) provide a competitive edge.

• Cost parity with short-read sequencing is targeted through technology improvements, workflow innovation, and leveraging advances in compute.

• New competitors like Roche and Constellation are not seen as immediate threats due to technical limitations and higher costs.