PacBio to cut jobs, lower spending over NIH funding cuts and tariffs
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FILE PHOTO: The patient's entrance at the National Institutes of Health is shown in Bethesda, Maryland October 16, 2014. REUTERS/Gary Cameron/File Photo
By Sneha S K
(Reuters) -Gene sequencing equipment maker PacBio plans to cut around 120 jobs and lower expenses due to fresh tariffs and reduced funding for federal health agency National Institutes of Health (NIH), it said on Wednesday.
The company plans to eliminate about "80 current positions and 40 open or planned positions across the organization," it said in an emailed statement.
WHY IT'S IMPORTANT
PacBio is the first life sciences company to announce cost saving measures after the NIH on February 7 said it would sharply reduce the rate at which it reimburses research institutions for "indirect costs," which include laboratory space, faculty, equipment and infrastructure.
A U.S. judge early last month blocked the Trump administration from cutting the funding.
Universities warn the cut would lead to layoffs, lab closures and a curtailment of scientific and medical studies.
On March 27, U.S. Secretary of Health and Human Services Robert F. Kennedy Jr announced plans to cut 1,200 jobs at the NIH, as part of his effort to reshape federal public health agencies.
BY THE NUMBERS
The company plans to reduce its projected annual adjusted operating expense run-rate by $45 million to $50 million by year-end.
It had earlier forecast a run-rate of $270 million to $280 million.
The life sciences company also reiterated its full-year revenue forecast of $155 million to $170 million.
It also reported preliminary first-quarter revenue of $36.9 million on Wednesday, higher than estimates of $33.5 million, according to data compiled by LSEG.
KEY QUOTES
The cost cutting is likely to be viewed positively but "caution from here is still warranted," Stephens analyst Mason Carrico said.
MARKET REACTION
Shares of the company, which had fallen about 53% since Trump took office, rose 8.7% in early trade.
(Reporting by Sneha S K in Bengaluru; Editing by Sahal Muhammed)
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