Exec Search Underway at PacBio After CEO, CFO Announce Plans to Retire

Xconomy San Francisco — 

Gene sequencing company Pacific Biosciences of California is seeking two new leaders in the wake of retirement announcements by a pair of longtime top executives.

PacBio (NASDAQ: PACB) president and CEO Michael Hunkapiller plans to retire by year’s end, and the company’s chief financial officer, Susan Barnes, is slated to do the same in August.

Hunkapiller has served as chief executive since 2012, when he succeeded former company head Hugh Martin, stepping into the position about 15 months after the company went public and netted about $200 million.

Previously Hunkapiller, a DNA sequencing industry veteran, spent more than 20 years at Applied Biosystems (ABI). Hunkapiller left ABI in 2004 after nearly a decade as the company’s president and general manager and became a general partner at Alloy Ventures. The following year he led Alloy’s investment in PacBio, joining the company’s board of directors as part of the deal.
ABI later merged with Carlsbad, CA-based Invitrogen, creating Life Technologies; Life Tech was acquired in 2014 for $13.6 billion by Thermo Fisher Scientific (NYSE: TMO)—one of PacBio’s current competitors.

After retiring from PacBio, Hunkapiller plans to retain his seat on the board, the company said.

Barnes has been with PacBio for about a decade, joining in 2010. Previously she spent about eight years at Intuitive Surgical (NASDAQ: ISRG), maker of the da Vinci surgical system. Barnes was Intuitive’s CFO when she left the firm in 2005.

Their retirement announcements come about six months after the implosion of the company’s planned acquisition by DNA sequencing giant Illumina (NASDAQ: ILMN). Mounting antitrust concerns from regulators in the US and the UK scuttled the tie-up.

PacBio and the UK’s Oxford Nanopore Technologies lead the market when it comes to what are known as long-read sequencing technologies. As earlier limitations in long read accuracy and throughput have fallen away, Illumina, which designed its systems to produce short-read data, has evidenced increasing interest in gaining access to these technologies. PacBio’s single-molecule real-time (SMRT) sequencing technology, like Oxford’s nanopore sequencing, provides researchers with a more complete picture of genomes and transcriptomes.

Now PacBio is searching for a new chief executive with a “track record of significant commercial success”—and the ability to balance the company’s commercial opportunities with its innovative science and engineering, according to a prepared statement from board chairman Christian Henry.

Earlier this year one of the brains behind PacBio’s innovative technology left the company. Head of R&D Michael Phillips retired after about 15 years at the company. He was succeeded by Denis Zaccarin, who most recently led the team responsible for designing and developing the SMRT cell consumables used in PacBio instruments.

PacBio announced Hunkapiller and Barnes’s plans to retire on the same day the company filed what’s known as a mixed “shelf” registration of up to $250 million with the SEC. Such registrations are a mechanism used to register shares that a company intends to sell periodically in a number of separate offerings, allowing firms to position themselves to take advantage of more favorable market conditions, should they arise.

In the first quarter of the year the company reported net income of about $1.3 million on revenues of $15.6 million, compared with a net loss of $30 million on $16.4 million last year. But that profit was the result of a $34 million fee the company received from Illumina for extending the merger deadline when the firms were still pursuing finalization of that agreement.

PacBio shares, which priced at $16 at the time of its IPO, closed at $3.90 Monday. Back in November 2018 Illumina agreed to pay $8 per PacBio share as part of its acquisition proposal. At the time the shares were trading at about $4.50 apiece.