Illumina competitor Pacific Biosciences is closing its San Diego office, laying off workers – San Diego Union-Tribune
Illumina competitor Pacific Biosciences is closing its San Diego office, laying off workers – San Diego Union-Tribune
Author: Natallie Rocha
Published on: 2024-05-10 19:51:43
Source: Technology – San Diego Union-Tribune
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Genome sequencing company Pacific Biosciences, a competitor of Illumina, is shutting down its San Diego location, laying off nearly 200 workers and downsizing its research pipeline to save about $75 million annually.
The Menlo Park-based biotech is part of the competitive field of gene sequencing companies, many based in San Diego or with local operations. PacBio’s approach has been building gene sequencers that analyze large chunks of genetic data.
These gene sequencing tools are used to trace the story of our DNA from telling us our ancestral lineage to discovering the next generation of therapies for cancer patients.
The company reported in its first-quarter earnings Thursday that it will close its Sorrento Valley office at 6965 Lusk Blvd. The company rented the whole 74,000-square-foot facility, which used to house local startup Omniome, according to property records.
Omniome, which specialized in rapidly sequencing short sections of DNA, was acquired by Pacific Biosciences for $800 million in 2021. The deal sought to expand PacBio’s capabilities and competitiveness in the gene sequencing market.
Notably, in 2018 Illumina made a $1.2 billion bid to buy Pacific Biosciences. But Illumina abandoned the deal after getting pushback from regulators who said it would veer into a monopoly.
PacBio is laying off 108 San Diego employees by the end of June, according to its April 29 Worker Adjustment and Retraining Notification Act letter filed with the state. Local jobs impacted by the layoff include engineers, scientists and management level positions, such as directors and a vice president.
In Thursday’s earnings report, PacBio CEO Christian Henry said “first quarter revenue came in below our original expectations as we saw an increasing number of customers delay instrument purchases” and while some revenue segments grew, overall shipments were below expectations.
The company reported a net loss of $78.2 million during the first quarter, compared with a loss of $88 million during the same period last year.
In an email to the Union-Tribune on Friday, Todd Friedman, Pacific Bioscience’s senior director of investor relations, said the company had to make “difficult but necessary changes” in response “to headwinds that have affected our industry and our performance … We considered every option and ultimately determined that this is the path we must take to achieve our mission and enable PacBio to drive long-term value creation.”
PacBio said this cost reduction plan does not eliminate the Omnione segment that PacBio acquired. It will continue to sell and develop Omnione technology. The company’s research and development teams are being consolidated into PacBio’s Menlo Park facility.
“This swift and decisive action is a demonstration of our plan to achieve positive cash flows by the end of 2026, as originally outlined in our long-term guidance,” said Henry in PacBio’s earnings report. “We remain highly encouraged by PacBio’s long-term growth potential.”
It was not clear how much this restructuring will cost Pacific Biosciences.
The publicly traded company had 796 employees, the majority based in California, as of Dec. 31. PacBio is also cutting 71 workers from its Northern California headquarters.
PacBio had cash, cash equivalents and investments of $561.9 million at the end of the first quarter, compared with $631.4 million at the end of the year.
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