Good afternoon, ladies and gentlemen, and welcome to the Pacific Biosciences of California Incorporated Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would like to turn the conference over to your host today, Mr.
Todd Finman, Director of Investor Relations. Sir, you may begin.
Good afternoon, and welcome to the Pacific Biosciences' 2nd quarter 2021 earnings conference call. Earlier today, we issued a press Call. Outlining the financial results we will be discussing on today's call, a copy of which is available in the Investors section of our website atwww.pacb.com or alternatively as furnished on Form 8 ks available on the Securities and Exchange Commission website atwww.sec.gov. With me today are Christian Henry, President and Chief Executive Officer Susan Kim, Chief Financial Officer and Mark Van Owen, Chief Operating Officer. Similar to last quarter, we're hosting our conference call from a number of different locations.
So bear with us if there are any technical issues or pauses. Before we begin, I'd like to remind you that on today's call, we will be making forward looking statements, Call, including providing predictions, estimates, plans, expectations and further information. You should not place undue reliance on forward looking statements because they are Call, subject to assumptions, risks and uncertainties and may differ materially from actual results. These risks and uncertainties are more fully described Call in our press release issued earlier today or in our filings with the Securities and Exchange Commission. We disclaim any obligation to update or revise these forward looking statements.
In addition, please note that today's call is being recorded and will be available for audio replay on the Investors section of our website shortly after the call. Investors electing to use the audio replay are cautioned that forward looking statements made on today's call may differ or change materially Call after the completion of the live call. I'll now turn the call over to Christian.
Thank you, Todd, and good afternoon, everybody. Thanks for joining us today. To start, I'd like to welcome the Circulomics team to the PacBio family. As you may have seen, this morning, we announced that PacBio has acquired Circulomics, a long read sample prep company specializing in manipulating high molecular weight DNA, Conference Call, especially in extraction. Circulomics sells its products to approximately 700 customers worldwide.
These customers use Circulomics as Sample Prep Solutions across almost every sample type from cells, bacteria and blood Call to animal tissue, insects, fungi and plants. Several large sequencing initiatives have used Circulomics' NanoBind extraction kit, including customers like the NIH Center for Alzheimer's and Related Dementias, who used it to extract DNA from blood and brain samples. Nanobind was also used by biologists to sequence the 27 gigabytes hexaploid giant redwood genome. As I've indicated in the past, an important part of our acquisition strategy is to obtain capabilities Call. We'll improve our overall sequencing workflows for our smart sequencing customers.
Circulomics as part of PacBio, Call. We will be able to deeply leverage both their proprietary nanobiology and significant technical expertise into our complete sequencing workflow, which will simplify our sample and library preparation processes and ultimately enable our customers to consistently generate even higher quality Hi Fi data. The Circumomics team is based in Baltimore, Maryland, and the team will report to Doctor. Kathy Ball, our Senior Vice President of Research. Finally, I want to assure all of Circulomics' current customers that we will continue to support all of the current products on the market, even for those customers that use other platforms that require the extraction of high quality, high molecular weight DNA.
As we shared a few weeks ago, We also entered into an agreement to acquire Omnia, a San Diego based company developing a proprietary short read of short read sequencing in areas like liquid biopsy, minimal residual disease and other clinical applications. These two acquisitions underscore both our commitment to strengthening long read Hi Fi sequencing Call. As we begin to position it for clinical germline applications and our strategy to build scale by adding a differentiated technology that is intended to allow us to serve more customers more broadly. With respect to the proposed acquisition of Omnium, I am pleased to report that we have filled, filed all required regulatory documents and we continue to believe that we are on track Call to complete the acquisition later this quarter. Now, let's turn to 2nd quarter highlights and talk about the business.
We continue to see strength in our business as PacBio achieved its 2nd consecutive quarter of record revenue. Product and services revenue of $30,600,000 was in line with our expectations and represented an increase of 6% sequentially and grew 79% compared to the Q2 of last year. The record quarter was driven in part by strong consumable sales. Consumable revenue of $12,200,000 was up 18% sequentially from the Q1 of 2021 Group and grew over 150% compared to the Q2 of 2020. PacBio's growing consumable revenue is a result of the SQL2 and 2e installed base expansion.
In the Q2, we installed 38 SQL2 and 2E systems, bringing the total installed base to 282 compared to 148 at the same point last year. Our 2nd quarter placements included 10 SQL IIs and 28 SQL IIEs. About one quarter of our SQL IIe placements were to new instrument customers. Nearly half of our installed base is now using the SQL2E platform, meaning more customers are benefiting from significant compute savings Call and can spend less time on data processing. Some of our new quarters in the quarter included Dante Labs, an Italian company planning to use Hi Fi sequencing to transport health information into diagnostic and therapeutic solutions.
Call. Additional new customers also included an academic reference laboratory that purchased and installed a SQL2e to expand rare and inherited disease research where short read exome and short read whole genome sequencing was unable to explain the newborn's condition. From a regional perspective, Asia Pacific Call. In China, Novogene expanded its PacBio fleet with an order of 8 SQL2 E Systems, some of which were installed and recognized as revenue in Q2. 2.
This was a competitive win and Novogene is adding capacity for human genomic and de novo agricultural studies. Novogene has already completed over 2,600 projects on Pac Biotechnology, Call, including animal and plant de novo genome sequencing, microbial sequencing, full length transcriptome sequencing and human genome sequencing. These systems will help them further scale their HiFi sequencing services Call to customers all across China. In Japan, a new PacBio customer, Bioengineering Lab, adopted the SQL2E to run its metagenomics and de novo plant and animal projects. This customer previously used another long read technology, that adopted PacBio sequencing because of HiFi's accuracy and completeness.
Moving to EMEA. Strong consumable sales in the region were driven by growth in plant and animal sequencing as our customers leverage our highly accurate long reads Call to understand the genetic variation that can ultimately help organisms adapt to changing climates, conserve endangered species and produce Higher Yielding and Disease resistant crops. Also in Europe, the Genomics core Leuven installed their SQL2e, the first in Belgium, and will use their new instrument to research structural variation and other human applications. Finally, the Americas region had record revenue in the 2nd quarter. Sequencing for the NIH's All of Us Research Program is underway and is expected to add thousands of high quality long read genomes to the program's database over the coming quarters.
COVID surveillance using PacBio sequencing continued in the 2nd quarter, contributing to modest consumable revenue Call with volume slowing in June corresponding to the overall COVID cases declining in the United States. And in the second quarter, We booked another SQL2e system at a university lab to ramp up their COVID surveillance efforts and to detect other emerging viruses. We remain committed to serving the broader surveillance need, especially in light of the growing Delta variant, and we expect to offer our fully kitted COVID solution before the end of the year. Taking a step back from business updates, This past quarter was a landmark in the ongoing genomics revolution. Nearly 2 decades after the completion of the Human Genome Project, Researchers finally assembled a human genome in its entirety.
We believe this feat could not have been done without our highly accurate Call. This new sequence decoded the last 8% of the genome that has been missed Call of the year. The new reference now includes assemblies for all 22 autosomes plus chromosome X, including 200,000,000 base pairs of new sequence containing over 2,200 gene copies, Conference, 115 of which are predicted to be protein coding. I'd like to congratulate everybody involved in the Telomere to Telomere Consortium, And we are incredibly proud of the contribution PacBio sequencing made to this important effort. This study shows there is still So much to learn about the genome and highly accurate long reads are one of the best technologies to teach us.
The goal of research initiatives like the Telomere to Telomere Consortium is to gain deeper understandings of biology so that we can ultimately better human health. We share this mission with our research customers, which is why we continue to collaborate with leading institutions like Rady's of the U. S. Children's Hospital to demonstrate PacBio sequencing in the clinical research setting. As part of our collaboration, PacBio and ReDS will work together on a study focused on long read whole genome sequencing of rare disease cases for which previous short read whole genome and exome sequencing yielded no answers.
The study, which is currently underway, of Disease, we are pleased to see that ACMG updated its guidelines and now provides a strong recommendation to support the use of exome or genome sequencing as either a first or second line test in patients presenting with congenital anomalies or intellectual disabilities. These updated guidelines can provide clinicians with justification for ordering sequencing based tests and may ultimately reduce the diagnostic odyssey for patients and their families. We strongly believe HiFi whole genome sequencing technology could be used to develop first line tests as it elucidates parts of the genome undetected by other technologies. Short tandem repeats, for example, have proven association with dozens of disorders and are challenging areas for other sequencing technologies to sequence. Call.
And as a recent study by researchers from the Garvin Institute in Australia explains, established short read NGS platforms are unable to genotype large and complex repeat expansions, potentially leaving cases unsolved. We also believe that our HiFi sequencing can address other key clinical applications. For example, our collaboration with Berry Genomics continues to show the benefit of PacBio sequencing in its thalassemia carrier screening test, which is in development. Research results from their latest study in July reveal that HiFi sequencing was able to identify all panel variants Call. Present with no false negative results and was able to improve carrier assignment through the identification of rare variants Call missed by current panel tests.
Additional studies continue to show Hi Fi's utility in pharmacogenomics. Call. Last month, scientists at Leiden University Medical Center used PAC Bio Sequencing to develop a computational method that significantly improved the prediction of drug metabolism based on the CYP2D6 sequence. SHIP-two D6 is responsible for the metabolism and elimination of approximately 25% of the clinically used drugs and is difficult to sequence due to its pseudogene and several structural variants. This is just one more example where having complete Long read gene information can be clinically beneficial.
Turning to our organizational updates. We made significant progress in expanding our team. We added 11 quota carrying sales reps in the 2nd quarter, call, bringing the total to 39 at the end of Q2, and we're well on our way to achieving our goal to double our ending 2020 sales rep headcount by the end of the year. We also successfully broke out our Americas and EMEA regions with the hire of Neil Ward as the EMEA General Manager. Neil brings extensive experience developing sequencing markets in the region and deep customer relationships Call.
With his time, working with the U. K. Biobank and Genomics England. Under Neil's leadership, Conference Call. We are now in the range of $1,000,000,000 in the range of $1,000,000,000 in Call.
We are pleased to announce our results for early research and technology development activities to broaden our toolkit and feed our product development pipeline. I'll now turn the call over to Susan to discuss our financial results. Susan?
Thank you, Christian. As discussed, we achieved another record in the 2nd quarter with $30,600,000 in revenue, which represented an increase of 6% from $29,000,000 in the Q1 of 2021 and an increase of 79% from 17 $100,000 in the Q2 of 2020. Internal revenue in the 2nd quarter was $14,300,000 a decrease of 4% sequentially from $14,900,000 in the 1st quarter and a 60% increase from 8 $900,000 recorded in the prior year quarter. We delivered 38 SQL2 and 2E systems during the 2nd quarter, growing the installed base to 282 systems as of June 30. Consistent with last quarter, about 3 quarters of these shipments were Sequel 2e Systems.
Customers continue to upgrade to Sequel 2e from Sequel 2 in the 2nd quarter representing approximately $400,000 in revenue. Turning to consumables. Revenue of $12,200,000 in the 2nd quarter grew 18% sequentially from $10,400,000 in the prior quarter and was up over 150% from $4,800,000 in the Q2 of last year. The growth in consumer revenue reflects increased SmartCell usage as a result of our growing installed base of SQL2 and 2E systems. Sequel 2 and 2E consumables represented approximately 85% of our total consumable shipments in the 2nd quarter with the rest from older systems.
We continue to expect the proportion of consumable sales from SQL2 systems to grow as the installed base for these systems expands and customers migrate to our newest platforms. Annualized pull through revenue per system on the SQL2 and TUI installed base in the 2nd quarter approximated 170,000. Finally, service and other revenue grew to $4,100,000 in the 2nd quarter compared to $3,700,000 in the prior quarter and $3,300,000 in the Q2 of 2020. Our service revenue growth reflects the growing installed base of SQL2 and 2E. Moving to gross profit and gross margin.
2nd quarter gross profit of $13,800,000 was in line with our expectations and represented a gross margin of 44.9 percent compared to gross profit of 13,000,000 or 44.8 percent in the Q1 of 2021. Year over year gross Profit more than doubled to $13,800,000 driven by the growth in revenue with gross margin approximately 6.2 points was higher primarily due to higher volumes and higher utilization in our factory. Moving on, operating expenses were in line with our expectations. Operating expenses in the Q2 2021 totaled $51,300,000 up 10% sequentially compared with $46,700,000 in the first quarter and 70% higher than $30,100,000 in the Q2 of the prior year. The increase in operating expense compared to the previous quarter last year was primarily a result of higher headcount related spend as we continue to build our commercial and R and D organizations.
In terms of headcount, we ended the quarter with 4 92 employees, 57 more than where we ended the 1st quarter. We grew our quota carrying sales force by 11 people, majority of whom were added to our Americas and EMEA regions, bringing the total to 39 and we're well ahead of our target to double our ending 2020 sales rep headcount. We also added new hires in our research and development organization to support our growing number of initiatives. Non cash stock based compensation included in operating expenses was $13,900,000 in the 2nd quarter compared to $9,200,000 in the prior quarter and $2,800,000 in the Q2 of 2020. Other income and expense in the Q2 of $3,400,000 reflects a full quarter of interest expense associated with our convertible notes.
2nd quarter net loss was therefore $41,000,000 and a net loss per share was $0.21 compared to net loss of 87,400,000 and net loss per share of $0.45 in the Q1 of 2021 and a net loss of 23,100,000 or $0.15 per share in the Q2 of 2020. As a reminder, net loss in the Q1 Call. 2021 included a $52,000,000 expense related to the repayment of continuation advances to Illumina due to our $900,000,000 convertible note financing earlier in the Q1. Now turning to the balance sheet. We ended the 2nd quarter with $1,140,000,000 in unrestricted cash and investments compared to $1,160,000,000 at the end of last quarter and $319,000,000 at the end of 2020.
Inventory balances increased in the second quarter to of $18,000,000 representing 3.9 inventory turns compared with 16 point $3,000,000 at the end of the Q1 of 2021, which represented 4.2 inventory turns. Accounts receivable increased in the 2nd quarter to $19,900,000 reflecting a DSO of 49 days compared with $12,900,000 at the end of the Q1 of 2021, reflecting a DSO of 46 days. The increase in accounts receivable and DSO compared to the Q1 were primarily a function of revenue linearity in the second quarter. Long term deferred revenue grew approximately $4,500,000 in the second quarter to a balance of $10,200,000 The increase reflecting largely the cash received from Enrique as part of our collaboration agreement to develop our ultra high throughput sequencer. Now moving to guidance.
I'd like to take this opportunity to provide our estimates for fiscal year 2021. We continue to see growing customer demand for our SQL2, 2E platform and our HiFi chemistry. As a result, on a quarterly basis, we expect revenue to continue growing sequentially. However, The quarterly revenue mix can shift based on the volume of instrument placements in any given quarter. Additionally, multi instrument orders from customers with larger projects can add additional variability to timing of orders in any particular quarter.
For the full year 2021, We expect revenue to grow in the range of 62% to 67% compared to 2020, which represents revenue of approximately $128,000,000 to $132,000,000 with sequential growth in each Q3 and Q4. In the first half of twenty twenty one, We placed 79 SQL2 and 2E systems, which exceeded our internal expectations, and we continue to project the number of installs to grow in the second half relative to the first half, reflecting our increased commercial presence and customer demand. Moving down the P and L, we expect full year 2021 gross margins to be between 45% 46%. For operating expenses, we expect the full year to be between $218,000,000 $222,000,000 which includes in ZK R and D expenses, which we estimate between $20,000,000 $25,000,000 for the full year. As a reminder, as part of the terms of our convertible notes, we expect to incur approximately $3,500,000 in interest expense every quarter going forward until maturity or conversion of the notes, which represents 1.5% interest per annum and amortization of debt issuance costs.
We expect weighted average share count for purposes of EPS for the full year to be approximately 200,000,000 shares. Please note that these estimates exclude call the impact from the proposed Omniome acquisition and the related type financing announced last month. We do expect that the first Full quarter post closing of the OmniHome acquisition will increase our quarterly operating expense run rate by approximately an incremental $12,000,000 to $19,000,000 We expect the impact from the acquisition of Circulomics to have an immaterial contribution to our P and L in 2021. We are also mindful that there is a growing uncertainty around the COVID-nineteen delta variant and its effect on commercial activity and therefore our estimates reflect our best estimates given the current state of the pandemic. With that, I will turn the call back to Christian.
Christian?
Thank you, Susan. When I joined PacBio last September, I laid out a clear plan to drive revenue growth, expand our product offering Call and to show how PacBio HiFi Genomes can have a real impact in clinical whole genome applications. We've now had 5 consecutive quarters of revenue growth, achieving quarterly revenue over $30,000,000 for the first time. Our results indicate that our commitment to commercial expansion is beginning to drive us forward. We've also been able to expand our research and development teams and are progressing well against developing our multiproductlongread sequencing portfolio that we expect will enable our customers to dramatically expand the size of their projects as we push the cost of HiFi sequencing well below the $1,000 genome Barrier.
Finally, we have entered into several transformative collaborations that are demonstrating the power of Hi Fi in understanding the genetic basis for rare and undiagnosed disease. Additionally, with the acquisition of Circulomics, We are delivering on our strategy to dramatically improve the front end of our smart sequencing workflow, so that customers can operate at greater scale with even better sequencing results. And then finally, our announced acquisition of Omniome represents the beginning of a new era in sequencing. Omnium's highly accurate short read sequencing platform is expected to enable us to enter into large markets Conference Call, where our long read sequencing technology has not historically been able to access. We will soon have the ability to offer our customers the right Sequencing technology for all of their applications.
We will reach more customers than ever before, which will not only lead to the sales of Omniome's platform, but our SQL platforms as well. The addition of the Omniome team will also allow us to to further scale our organization to meet the challenges of the future. To close, I am both pleased with our continued execution and hungry to drive further expansion into our end markets. It's rewarding to see firsthand how our technology is in enabling better science. Looking at the sequencing landscape today, I am confident that there are thousands of more customers that can realize the benefit from Call.
Thank you. And with that, I'd like to open up the call for questions. Operator?
The first question comes from the line of Tycho Peterson from JPMorgan. Your line is open.
Hey, good afternoon. Christian, I want to start with one on O'Neill. One of the questions we've gotten is just they're using the Molson PCR upfront. And that's been a cumbersome issue for some of your competitors in the past. So I guess in your view, How easy is it going to be to kind of move away from that?
And can you maybe talk to some of the steps that are required? We've heard anecdotally that maybe you have to redesign the flow cell. You may need to innovate around chemistry. So I'm just curious as you think about kind of roadmap in that path to first commercial launch in the first half of twenty twenty three, What are some of the key steps you think that need to be taken here? And then does Circulomics play into any of that here on the sample prep side or is that mainly for Sequel?
Okay. So with Circulomics, we'll just start there. Circulomics is principally driven Call. For the SQL platform and long reads, the team there is world class at understanding how to handle long fragments of DNA and We're going to leverage their capability into our long lead work. That makes sense, they are experts Kind of thinking about Hand with B and A in general.
And so I suspect over time, they may find their way onto the omnium side of the equation as well. But the principal driver is really developing our long read workflows. With respect to Omnium, We were very thoughtful about that, about EPCR and thinking through how do we get broad market adoption. And We think EPCR could be useful in some applications, but the reality is that we would much prefer to have a different Clustering capability. And so as we were doing the diligence, we definitely approached we definitely came up with some different approaches.
And one of the reasons why we decided to slow the development down because I think as I've said a couple of weeks ago, They are ready to go to beta right now effectively is in order to really nail down that To nail down that clustering method so that we can operate at a much bigger scale, much higher density. And we believe that we're confident that we can get that done. Interestingly, we'll be leveraging some of the internal PacBio Expertise to help in that mission, which is pretty exciting and will show how the combination of both companies will give us Expertise on the short read side and then I suspect some of the OmniHome folks will help us on the long read side as well. With respect to redesigning the chemistry in the flow cell, it's unlikely that we're going to have to do significant changes there. So I don't think that's a big barrier for us.
Okay. That's helpful. And then a follow-up unrelated question around guidance. I guess, two parts. Just any color you can give us on 3Q versus 4Q?
Just trying to think about kind of year end budget flush and how you're thinking about the sequential step up into 4Q. And then given that you are guiding a bit below The Street, Street's at $134,000,000 I'm just wondering if there are things that would drive you to the upside, for example, like COVID surveillance, did you make anything for that? Yes, Tycho, that's great. I think Susan in her remarks I just tried to point out that we expect to continue growing sequentially. So we would expect Q3 to be better than Q2 And Q4 to be better than Q3.
And so I would be thinking along those lines. We guided In a pretty tight range and where the street is, we're in the same ballpark. And so I'm not really We are just looking at we're trying to think through the environment with respect to COVID and Delta variant And where the state of the market is. The good news is that we have record demand generation coming into our funnels in Q2. Call.
Q1, we're happy in Q2. We're continuing to expand the sales force. And so I'm actually very Optimistic about our opportunity that's in front of us, but we thought that as we put guidance out for the first time kind of on an extended basis that we would be thoughtful about. Yes, that's very helpful. Thank you.
The
next question comes from the line of taijat Sivan from Morgan Stanley. Your line is open.
Hey, guys. Good evening. I just want to follow-up on the guidance question that Tycho just asked Specifically in terms of the instrument installed cadence, Christian, I mean, you had about sort of 41 units in the Q1 and 38 here. Was there any pull forward from multiunit orders or some such that we need to be thinking about? Because it looks like, I mean, in terms of Installed, we are sort of flattish in the 3rd quarter with a slight tick up in the 4th quarter.
So we're just trying to do some Quick mental math here in terms of what it implies for your instrument placements this year.
Yes. So Call. I do believe that instruments are going to grow in each quarter from here. I do think the reality is that when we get Larger Bolt instrument orders, the timing of when they actually come in, do they come in, in the Q3 or do they come in, in the Q4? How does it manifest variable and that will and unfortunately when we're still a little bit small, A few instruments have an impact on the rest of the business when you look at the consumables Still not being larger than instruments.
Now you saw in Q2, we had a great consumable quarter and I think that the installed base growth is starting to pay dividends for us on that front, and you'll continue to see that through the rest of the year. But I'm actually Very encouraged at what we're seeing in the sales funnels with respect to the instrument placements. And as you know, the more we can place the instruments Over time, that will drive consumable growth, which will help drive gross margin expansion and also create More sustainable long term growth. And so on balance with the guidance we gave, we do see instrument placements increasing over the back half of the year. And the timing in any particular quarter can change, of course, but The other piece to think through is that we had very good success competitively in the market in Q2.
I think we highlighted that in one particular Significant deal with Novogen. That was a very competitive deal that we won. And so I think on balance, we are capturing The minds of customers with respect to HiFi and its power. And I think that's only going to bode well for us as we get into the back half of the year ended 2022.
Got it. Very helpful. And then one quick one on circlomix. Can you I know the press release said that the contribution for 'twenty one is pretty small, but as we think about the longer term trajectory here, can you help us dimension the size of that opportunity and perhaps share What fraction of their sales are from customers who are using other long read technologies in the market?
Well, I think we'll give some generalities. I mean, the reality is their revenue is very small and that's why we said what we said in the press release. They do have a significant of their revenue, there's a significant proportion going to other technologies, And that may or may not continue on. It's our intent to fully support all of those customers in the market. And I was on the phone Call with competitors this morning reassuring them to that effect, that we will support everyone in the market.
But what you really need to think about is How this impacts our sequencing workflow and allows us to make the upfront extraction and library sample preparation library prep easier so that customers can scale faster using the smart sequencing technology. And so the real benefit here is to our base business and to our ability to accelerate our consumable pull because customers will have an easier. This is going to be especially important as we think about launching new platforms as we've talked about that can sequence many, many more samples per year than our current platforms can. And so what we're really doing is we're setting the stage to have, well, be ready to operate at very high scale, That makes sense.
Got it. And one final one for me, Christian. Can you just confirm Your plans on the core sort of sequel platform in terms of new chemistry or software releases, should we expect Call. One around that ASAPG timeframe like PacBio has done in years past. And sort of on a related note, I mean, you're integrating a couple of deals here and managing these external collaborations as well.
What are you doing internally to make sure that the focus on the Sequo commercial scale up and So scale up and onboarding all these new employees remains intact.
Yes. That's a really, really important question. And the truth is, this would be possible, it hadn't started with a vision to build out a very Call. Your management team that's capable of handling scale. And so if you look at the leadership team that I've been fortunate enough to recruit, All of these managers have significant experience at operating at multibillion dollar scale with very large teams and lots of complexity.
And so that was the first that was the reason why I went so hard to hire such a senior team. And so we've put that team in place and now we can use leverage those capabilities to keep us laser focused on Developing the long read technology and taking really the foundational assets of the company To the place where they need to go because we think there's significant opportunity in front of us in long read sequencing and we're definitely going to Make sure we don't take our eye off the ball there. With respect to the SQL platform, we will continue to develop and improve on that platform. And so, although I'm not going to comment with respect to the timing of enhancements to the platform on this call, You can be assured we will continue to improve that platform, make it more robust, more usable, more valuable to our customers So that we can keep expanding our installed base. And then at the right time, when the next generations of products are ready, We'll move those into the market and give customers much greater choice and flexibility and what scale they want to operate Yes.
And I think that will help us really maximize our opportunity in the market.
Very helpful. Thank you.
Yes. Thank you.
Your next question comes from the line of Stephen Ma from Piper Sandler. Your line is open.
Great. Thanks and thanks for the questions. So one on SQL 2 ASP trends. I'm just looking at my model, it looks like ASPs for SQL 2 in the quarter ticked up incrementally. And just wondering if you can confirm that and then maybe some of the rationale and some of the trends that caused that.
Was it due to less Multi unit orders or was it something else?
Yes. Susan, do you want to comment on the actual ASP in the quarter?
Happy to. So that is confirmed that the ASP incrementally was higher in Q2 than Q1, But it's not materially different. And you're right that there is a mix shift in terms of the instruments that come in and The different capacity with respect to multiunit orders, but we had multiunit orders in Q1. We had multiunit orders in Q2. So it's not a big driver, but also the ASP difference isn't that big between the two quarters.
Yes. Some of it is Some of it's also regional differences, where in any given quarter, the ASPs might be a little different From region to region, I don't think there was enough of a difference to really fundamental change in the way we're selling. In fact, I've instructed the sales force that instrument placements are a top priority and that we're going to Keep building out that installed base. So we were happy with the ASP in Q2, but It really does.
Okay. And then maybe just a follow-up talking about SQL 2. Can you give us a sense for 2022 Sequel placements, given all the investments in the sales and marketing and commercial organization and sales force?
Well, I think that if you look at the demand generation in our funnels, if that's any indication, I do think there's an opportunity to continue growing. Of course, we're not in a position to start guiding to 2022 yet, but the reality is that We are really starting to reach more customers than the company ever has before. And that very fact Is starting to spread the word, so to speak, of HiFi, which we believe will generate demand. And that's If you remember, when I first joined the company, one of my foundational strategies was to increase our commercial footprint Because when I did my channel checks and even today, not enough people understand what PacBio does and why we do it and why long reads are important. Call.
And so we're really growing our commercial footprint and then backing that up with enhancements to the Sequel platform that make it more useful. And I think you're starting to see that. You're seeing the consumables grow. You're seeing the total revenue of the company grow. We've had 5 quarters in a row of sequential growth now and we're really starting gets some momentum going.
And so, I'm excited about the rest of this year and 2022 as well, but probably too early to really comment on Anything specific there?
Okay. Yes, I appreciate the color you were able to provide. So yes, maybe just moving then on to the Consumables, I know you did about $170,000 per instrument this year. Is that a good run rate going forward? And also could you give us a sense given that you guys are placing so many more instruments now, could you comment on the consumables ramp Call.
On a new SQL2 instrument?
Yes. I think in general, it still fits customers a few quarters to ramp to a reasonable run rate. And that will be dependent on if it's a brand new customer or it's an addition to their installed base. Imagine a Core Lab that has a 3 or 4 month backlog, we put a new system in there, they're going to ramp very quickly, Whereas a brand new customer will take a little bit longer to get the workflows nailed down and how they're going to analyze the data. And so It's going to be variable.
I think where we are in the 170s is not an unreasonable place to be. You see it bounce around from quarter to quarter. That's a little bit dependent on how customers take their shipments and Also, how many systems we're placing in any given quarter, but put on balance, this is a these are pretty recent places For us to be. If you looked at the actual utilization, I think we see overall utilization starting to click up some and on a per system basis, which will ultimately help us a little bit as well.
Okay, great. And if I can sneak in a final one regarding Sertralon. You mentioned in the press release the potential for an automated workflow. Do you envision It's staying as a standalone instrument or would you integrate it with SQL2? And If you are integrating it, are you going to integrate it also into the low cost long read clinical sequencer you're developing with Invitae?
Thank you.
Hey Mark, you want to take this one?
Yes, happy to. So I do believe that At least initially, this would be a standalone instrument for automation. One of the great things about these NanoBine disks is that they are a little bit easier for us to automate. No, Kelvin and team have shown that even just things like Kingfisher extraction robots can be used quite readily. So think of this as a standalone, Not something that I would initially try to integrate into the SQL type platform.
And the focus and Christian mentioned this earlier in his in the questions. The focus right now is for this with the long reads. There are synergies of the team and there are opportunities for us to explore how we can use this for extraction or purification for For Suri Technologies, but the focus initially is to make sure that we're optimizing the long reads and focus on the SQL platform with this team.
Our last question comes from the line of Kyle Mixon from Canaccord Genuity. Your line is open.
Hello?
Mr. Kyle Mixon from Canaccord Genuity. Your line is open. You may ask the question.
Looks like we lost Kyle.
Yes, perhaps.
Can you hear me? Hello?
Yes, there you go.
Okay. Sorry, guys. Hi, guys. Thanks for taking the question. Sorry for the audio.
Congrats on this acquisition today. I know it's small, but it's nice to see everything kind of coming together. And on Circulemics, obviously, you're investing now and optimizing the front end of the workflow and you've already Got a great long read and I guess short read platform as well. I'm just curious if you're interested in deploying capital to Maybe inorganically enhance the back end technology and analytics similar to what Illumina has done with Edico and BlueBee and Annuncio Recently. And I think it's interesting because back in 2011, women acquired Epicenter and then from there went on to have some clinical deals, right.
And so it's an interesting Kind of Tom, I guess, on kind of the parallels or interest. And so I'm curious to hear your thoughts around the bigger picture, hearing your thoughts on the analytical kind of data side too.
Yes. I think thank you for the question, Kyle. And the truth is we're looking across the entire workflow Starting with sample prep and kind of the front end because we really need to make sure that we get very high quality DNA going into the sequencers so that we get high quality data coming out of it. But it is the back end and the informatics and data science side is going to be very, very important to us, particularly as we get to scale with the next generations of systems and with our collaboration with Invitae, for example. So yes, we're thinking through Strategically, how do we address that side of the equation and what are our opportunities?
And so That definitely is on our radar. But I think at this moment, what's most important is making sure that we get Very strong workflow up to the data analysis part and then as we Get the new systems to market and really start to think about how do we integrate the data infrastructure between both OmniOM and The PacBio infrastructure, what are the data science solutions that are going to be Call to help our customers solve their problems. And so it's clearly on our radar, but it's one step at a time here.
Okay. That's helpful. Thank you for that. And I guess just sticking with Stryculomics, the kits it appears the kits can kind of increase the yield on, I guess, the high I see what you're thinking about. Does that impact the cost at all?
I just wanted to kind of understand that. And obviously, it seems like there's more of an emphasis lately on accuracy and read length. Didn't realize they weren't exactly talked about as bottlenecks months ago. So I guess if you were to update your list of priorities, where does Reducing the cost like we talked about, in the past kind of fallen on that list now?
It's still right at the top. And I do think making sample prep easier gives you more yield through the sequencer. More yield means lower cost per base. So therefore, lower costs overall. So driving the cost down still is a very, very top priority.
The second priority is making sure that each system has the throughput that operates at a Scale the customer is looking for. So we're really interested in getting into the very high volume sample Human germline sequencing areas. And as a result, we need to make sure we build out our platform such that it can due large, large numbers of samples at very low cost. And so everything, of course, is interrelated, starting with the actual cost per base And then going to the throughput, which lowers the cost of the capital, so to speak, as you amortize it in a lab. And then none of this data quality, read length, accuracy, none of that can be sacrificed, Because really that's our leader.
We are the leaders in the market in accuracy. We need to continue that and forward and we're going to be Pushing really hard on that lever while we drive cost down and drive scale up for everyone.
Okay, awesome. And Susan, just had a question for you. On the so the Invitae agreement announced back, I guess, like in January, We've discussed the economics, but I know that a certain portion of revenue is going to hit the P and L at some point. Is that included in this outlook for The end of 2021 or how should we think about that, the top line impact from Invitae agreement?
So Kyle, the way to think about that is the revenue won't hit until we actually launch the product. So the investment that Invitae is making is sitting in our long term deferred revenue balance on the balance sheet and none of that hits the revenue in 2021.
Okay. Got it. That's right. That's right. All right.
Just one last question for me. I think I'm the last one in the queue. So, Christian, it's been about a year since you kind of took the role of the CEO member in August 7, I think of last year was when that press release went out. If you could look back and kind of reflect on the past year some of those objectives that you put out there, how would you kind of say that the company has done in executing on those? And What do you what's your goal is now looking forward a year in advance?
Thanks.
I am really proud of what we've been able to accomplish in this time. If you think about it, we've completely transformed the company in basically every respect. We've taken the leading moderate sequencing capability and we've deployed a new commercial organization to accelerate revenue and get more customers using the technology than ever before. We've created a new leadership team and a bold vision of where this company could go thinking about Being a multiomics platform, where customers can where we can solve customers' problems Call. As opposed to just offer one technology, we'll have a whole suite of technologies that we can offer.
And then the leadership team we've built, Quite frankly, in my opinion, is second to none. At every step of the way, from Mark and Susan, who are on this call, The new marketing and commercial team that we've built, Peter Froman as our Chief Commercial Officer, all the way down the line, we've been able to really upgrade the talent and create a vision for where the company is going to go. So I actually think that we've exceeded Call. My expectations for the 1st year, however, we're at the very beginning of this journey. If you look at the genomics landscape, The opportunities are still just right in front of us.
If you think about it, the Omniom acquisition itself basically doubles Call. And we have the management team and the ability to That will take you to really take advantage of that. And so I think when people think of PacBio, they think of us a lot differently than they did 12 months ago. And so I'm excited about what we've done, but I'm even more excited about what's in front of us and the next couple of years as they unfold and as we continue to transform this landscape. It's going to be a lot of fun.
That's great. Well, Seth, really excited to see that going forward. Thanks a lot guys for taking the time. Thank you.
I am showing no further question at this time. I would like to turn the conference back to Todd Friedman for closing remarks.
Thank you. As a reminder, a replay of this call will be available on our website in the Investors section as well as through the dial in instructions contained in today's earnings release. Thank you for joining us today. This concludes our call and we look forward to updating you on our progress in the Q3.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and have a wonderful day. You may all disconnect.