Pacific Biosciences Lays Off 130 Employees

Pacific Biosciences let go of 28 percent of its workforce Tuesday afternoon, after company execs realized that the demand was not high enough for their product.

Employees say that the company, which is located at 1380 Willow Road, wants to conserve its resources so that it can keep producing its next generation gene sequencing machines. 

In under a day, they sequenced the strain of cholera causing an outbreak in Haiti to determine its origins. They also sequenced the E. coli from the outbreak in Germany, according to people who are familiar with the matter.

But demand was not high enough for their services or machines, according to a recent SEC filing, And they’ve been part of a lawsuit which is slurping cash from their coffers. 

In August 2010, Helicos Biosciences Corporation sued them, claiming that Pacific Biosciences’ machines are infringing on two of its patents. The cost of this lawsuit reduced the amount of cash the company had on hand just before they went public in October 2010. The company sold 12.5 million shares of common stock at $16 per share, raising $200 million.

This was not enough money to support the lack of customers for their products, according to CEO Hugh Martin, so they let 130 people go on Tuesday. 

“We had higher expectations as to the rate with which adoption would occur,” Martin said.  “Our internal infrastructure was therefore built to handle a faster generational transition. Consequently, our burn rate was not in line with the speed with which the business was evolving,”

The company will refocus their resources to stay afloat.

The City of Menlo Park’s last permit application from the company states that they had 450 employees at the end of 2010.

Employees who were let go yesterday will receive severance packages that include salary and benefits equivalent to 60 days of work, and an undisclosed amount of cash that’s based on how long the employee had been with the company.

PACB was trading at $4.50 as of 9 a.m. on Sept. 21.