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PacBio Q4 Revenues Drop 29 Percent, But Beat Wall Street Estimate

NEW YORK (GenomeWeb) – Pacific Biosciences reported after the close of the market Thursday that its fourth quarter 2016 revenues dropped 29 percent, due to a one-time $20.0 million milestone payment that it received from Roche in the fourth quarter of 2015.

The Menlo Park, California-based single-molecule sequencing company recognized total revenues of $25.7 million in the quarter, down from $36.3 million in the prior-year period but beating analysts' average revenue estimate of $23.1 million.

Discounting the year-ago milestone and contractual payments from Roche, as well as contractual revenue of $1.3 million in Q4 2016, PacBio's product and service revenue climbed 92 percent to $24.4 million in Q4 2016 from $12.7 million.

Instrument revenue was particularly strong, nearly tripling to $13.1 million in Q4 2016 from $5.2 in Q4 2015, driven by sales of the Sequel system, PacBio CEO Mike Hunkapiller said during a conference call discussing the firm's fourth quarter and fiscal year 2016 performance. In Q4 the firm received orders for 30 Sequel systems, he said, including five from GrandOmics, a sequencing service provider in China. In January, Novogene also placed an order for 10 systems.

Consumable revenue in the quarter increased 64 percent to $7.5 million from $4.6 million in Q4 2015.

Ben Gong, PacBio's VP of finance and treasurer, said during the call that the company anticipates growing its product and service revenue by 40 percent to 60 percent during 2017. In addition, he said, the company plans to raise up to $60 million by selling shares of its common stock in an at-the-market offering.Net loss in Q4 2016 was $19.0 million, or $.21 per share, up from $1.4 million, or $.02 per share, in Q4 2015. Wall Street, on average, anticipated a $.23 loss per share.

PacBio's R&D expenses in Q4 2016 were $16.3 million, up from $14.8 million in Q4 2015. Its SG&A expenses rose to $13.0 million from $12.8 million.

For fiscal year 2016, PacBio recognized total revenues of $90.7 million, down from $92.8 million in 2015, due to the decline in contractual revenue from Roche, but beating the Wall Street estimate of $88.0 million. Product and service revenue for 2016 jumped 62 percent to $78.6 million from $48.4 million in 2015.

PacBio's net loss in 2016 was $74.4 million, or $.83 per share, compared to a net loss of $31.7 million, or $.42 per share, in 2015. It beat Wall Street's average net loss estimate of $.86 per share.

Total R&D expenses for the year were $67.6 million, up from $60.4 million in 2015, while SG&A expenses were $47.8 million in 2016, up from $45.2 million the previous year.

PacBio ended 2016 with $72.0 million in cash and investments.

On Friday morning, PacBio shares were down about 4 percent on the Nasdaq, trading at $4.66.