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PacBio Expects No Instrument Revenue Before Year's End; Shipped Seven Sequencers as of Sept. 15


By Julia Karow

This story was originally published Sept. 23.

Pacific Biosciences earlier this month provided an update on its business and plans in an amended S-1 filing with the Securities and Exchange Commission in connection with its planned initial public offering.

The company seeks to raise $200 million in the IPO (IS 8/24/2010), or $180 million in net proceeds. Of that amount, it plans to invest $60 million to $70 million in current and future applications of its single-molecule real-time technology, $40 to $60 million to fund its anticipated future working capital needs, $20 million to $30 million to fund planned capital expenditures, and $40 million to $60 million for general corporate purposes.

As of Sept. 15, the company had shipped seven PacBio RS instruments to early-access customers under its "limited production release" program, and said it plans to ship the remaining four instruments before the end the year. The recipients have to pay a deposit after accepting the instrument. After receiving an upgrade to a commercial-release instrument, which PacBio plans to launch early next year, they will have to pay the balance of their order and PacBio will recognize revenue.

The company said in the filing, posted on the SEC website last week, that it does not expect to recognize revenue on any of its orders before the end of this year. As of June 30, it had a backlog of purchase orders or signed contracts of approximately $15 million — including both early-access customers and customers ordering a commercial-grade instrument — and expects to ship these orders by the end of 2011. At a list price of $695,000, this would correspond to about 21 instruments. Included in the purchase price are a one-year service contract and a one-year instrument warranty.

PacBio noted in its update that the "limited production release" instruments will not have the same performance as the commercial instrument. Performance metrics such as read length and throughput will evolve during the early-access testing period, it said, as the company develops new versions of its software and consumables.

In regards to the patent lawsuit Helicos BioSciences filed against PacBio last month (IS 8/31/2010), the company said that it expects to incur "substantial costs, and experience diversion of attention of our management and technical personnel" to defend itself.

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