Pacific Biosciences Of California, Inc. Announces Third Quarter 2016 Financial Results

MENLO PARK, Calif., Nov. 02, 2016 (GLOBE NEWSWIRE) -- Pacific Biosciences of California, Inc. (NASDAQ:PACB) today announced financial results for its third quarter ended September 30, 2016.

Revenue for the third quarter of 2016 totaled $25.1 million, up 80% compared to $13.9 million for the third quarter of 2015. Product and service revenue for the third quarter of 2016 increased by 109% to $21.5 million, compared to $10.3 million for the third quarter of 2015. Revenue for the third quarter of each of 2016 and 2015 reflected $3.6 million of amortization of the upfront payment pursuant to the Company's development, commercialization and license agreement with F. Hoffman-La Roche Ltd.

Gross profit for the third quarter of 2016 was $12.6 million, resulting in a gross margin of 50.3%, an increase of $6.1 million compared to gross profit of $6.6 million and a gross margin of 47.1% for the third quarter of 2015. The growth in gross profit and margin was primarily driven by higher margin sales of the Company's Sequel TM System, which was launched in the fourth quarter of 2015.

Operating expenses for the third quarter of 2016 totaled $29.4 million, compared to $3.9 million for the third quarter of 2015. Operating expenses of $3.9 million for the third quarter of 2015 included aggregate expenses of $26.9 million offset by a one-time gain on lease amendments of $23.0 million. Operating expenses for the third quarters of 2016 and 2015 included non-cash stock-based compensation of $4.5 million and $2.9 million, respectively.

Net loss for the third quarter of 2016 was $17.5 million and net loss per share for the third quarter of 2016 was $0.19 per share. Net income for the third quarter of 2015 was $1.8 million and net income per share for the third quarter of 2015 was $0.02 per share, primarily driven by a one-time gain on lease amendments of $23.0 million.

Cash and investments at September 30, 2016 totaled $87.3 million, compared to $82.3 million at December 31, 2015. 

Quarterly Conference Call Information 

Management will host a quarterly conference call to discuss its third quarter 2016 results today at 4:30 p.m. Eastern Time. Investors may listen to the call by dialing 1.888.366.7247, or if outside the U.S., by dialing +1.707.287.9330. The call will be webcast live and will be available for replay at Pacific Biosciences' website at http://investor.pacificbiosciences.com/.

About Pacific Biosciences

Pacific Biosciences of California, Inc. (NASDAQ:PACB) offers sequencing systems to help scientists resolve genetically complex problems. Based on its novel Single Molecule, Real-Time (SMRT ®) Technology, Pacific Biosciences' products enable: de novo genome assembly to finish genomes in order to more fully identify, annotate and decipher genomic structures; full-length transcript analysis to improve annotations in reference genomes, characterize alternatively spliced isoforms in important gene families, and find novel genes; targeted sequencing to more comprehensively characterize genetic variations; and real-time kinetic information for epigenome characterization. Pacific Biosciences' technology provides high accuracy, ultra-long reads, uniform coverage, and is the only DNA sequencing technology that provides the ability to simultaneously detect epigenetic changes. PacBio ® sequencing systems, including consumables and software, provide a simple, fast, end-to-end workflow for SMRT Sequencing.  More information is available at www.pacb.com

Forward-Looking StatementsAll statements in this press release that are not historical are forward-looking statements, including, among other things, statements relating to the timeline for Pacific Biosciences' potential development of products, including for Roche, future uses, quality or performance of, or benefits of using, products or technologies and other future events. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, changes in circumstances and other factors that are, in some cases, beyond Pacific Biosciences' control and could cause actual results to differ materially from the information expressed or implied by forward-looking statements made in this press release. Factors that could materially affect actual results can be found in Pacific Biosciences' most recent filings with the Securities and Exchange Commission, including Pacific Biosciences' most recent reports on Forms 8-K, 10-K and 10-Q, and include those listed under the caption "Risk Factors." Pacific Biosciences undertakes no obligation to revise or update information in this press release to reflect events or circumstances in the future, even if new information becomes available.

Pacific Biosciences of California, Inc. Unaudited Condensed Consolidated Statement of Operations  (amounts in thousands, except per share amounts)
                         
                         
    Three-month Periods Ended September 30,   Nine -month Periods Ended September 30,
    2016   2015   2016   2015
Revenue:                        
Product revenue   $    18,050     $    7,570     $    44,016     $    27,703  
Service and other revenue        3,472          2,751          10,188          8,010  
Contractual revenue        3,596          3,596          10,788          20,788  
Total revenue        25,118          13,917          64,992          56,501  
Cost of Revenue:                        
Cost of product revenue        9,273          5,119          23,268          23,289  
Cost of service and other revenue        3,207          2,247          8,938          6,228  
Total cost of revenue        12,480          7,366          32,206          29,517  
Gross profit        12,638          6,551          32,786          26,984  
Operating Expense:                        
Research and development        17,479          16,162          51,362          45,688  
Sales, general and administrative        11,894          10,818          34,794          32,411  
Gain on lease amendments      —        (23,043 )      —        (23,043 )
Total operating expense        29,373          3,937          86,156          55,056  
Operating income (loss)        (16,735 )        2,614          (53,370 )        (28,072 )
Interest expense        (821 )        (741 )        (2,395 )        (2,153 )
Other income (expense), net        62          (52 )        420          (62 )
Net income (loss)   $    (17,494 )   $    1,821     $    (55,345 )   $    (30,287 )
                         
Net income (loss) per share:                        
Basic   $    (0.19 )   $    0.02     $    (0.63 )   $    (0.41 )
Diluted   $    (0.19 )   $    0.02     $    (0.63 )   $    (0.41 )
                         
Weighted average shares outstanding used in calculating net income (loss) per share
Basic        92,110          75,205          87,969          74,699  
Diluted        92,110          80,479          87,969          74,699  
                                         

Pacific Biosciences of California, Inc. Unaudited Condensed Consolidated Balance Sheets  (amounts in thousands)
           
           
  September 30,   December 31,
  2016   2015
Assets      
Cash and investments $  87,333   $  82,270
Accounts receivable    11,761      5,245
Inventory    16,473      10,955
Prepaid and other current assets    6,900      12,071
Property and equipment    14,003      8,548
Long-term restricted cash    4,500      4,500
Other long-term Assets    9,665      7,518
Total Assets $  150,635   $  131,107
           
Liabilities and Stockholders' Equity          
Accounts payable $  8,311   $  4,749
Accrued expenses    16,482      15,551
Deferred service revenue    7,456      7,958
Deferred contractual revenue    1,347      12,134
Other liabilities    2,347      1,627
Financing derivative    218      600
Notes payable    15,794      14,948
Stockholders' equity    98,680      73,540
Total Liabilities and Stockholders' Equity $  150,635   $  131,107
           

Contact: Trevin Rard 650.521.8450ir@pacificbiosciences.com

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