Pacific Biosciences axes 130 jobs as it slams brakes on spending

Creating a company on the bleeding edge of a new technology can cut both ways. After the initial demand for its highly touted sequencing tech fell short of expectations, Menlo Park, CA-based Pacific Biosciences ($PACB) has chosen to slash 130 jobs, or 28% of its staff, according to an SEC filing. Though the cuts are companywide, R&D and operations will bear the brunt of the layoffs.

The 2009 Fierce 15 company, which has developed technology that can quickly and cheaply sequence DNA, raised $200 million in its IPO last October. But PacBio's stock has taken a beating this year on a less than stellar earnings report in August and concerns that government cutbacks for science funding may impact the company's business, notes Xconomy.

The developer has a backlog of 35 sequencing machines--less than what analysts had anticipated. "The actions taken were in consideration of uncertainties associated with the economic environment and to position the company for long-term success," PacBio noted in an SEC filing, adding that the company was staffed to meet greater demand for its product that it's currently experiencing.

"PacBio is in the process of introducing a game changing, new generation of sequencing technology," explained CEO Hugh Martin in a statement. "Even in stable, high growth markets, adoption rates of such a disruptive platform can be difficult to predict. In today's turbulent economy, it is even more difficult." The developer will take a $5.2 million restructuring charge for the third quarter.

Two years ago, with plenty of venture cash to rely on, Martin was much more bullish. "What we really need to do is dramatically lower the cost of sequencing and decrease the time it takes to sequence, then we can turn disease discovery into a software problem," the CEO told FierceBiotech Editor John Carroll. But technological progress doesn't always translate into immediate financial rewards.

- here's the story and statement from Xconomy
- read more from GenomeWeb