NEW YORK (GenomeWeb) – Pacific Biosciences reported after the close of the market on Thursday that its fourth quarter revenues fell 3 percent year over year, as contractual revenues zeroed out and service revenues dipped.
The single-molecule sequencing technology firm reported total Q4 revenues of $24.9 million, down from $25.7 million in Q4 2016, but beating the analysts' average estimate of $21.9 million.
Revenues included $21.8 million in product revenue, up from $20.6 million in Q4 2016, and $3.1 million in service and other revenue, down from $3.8 million in the year-ago period. The firm also noted that Q4 2016 revenues included $1.3 million in contractual revenues that were absent in Q4 2017.
Sales of consumables drove Q4 product revenues, increasing 70 percent year over year to $12.7 million from $7.5 million in Q4 2016. Instrument revenues, however, fell to $9.2 million from $13.1 million.
On a conference call with analysts following the release of the earnings, PacBio CEO Mike Hunkapiller said that the firm had been working through a backlog of Sequel orders throughout 2016, which contributed to the year-over-year decline in instrument sales.
He added that the firm now has a total installed base of more than 370 systems. As Hunkapiller discussed at the JP Morgan Healthcare conference last month, the firm has released upgraded versions of its chemistry and software in beta, which are delivering performance improvements in read length and throughput, and expects a full commercial release this month.
PacBio's Q4 net loss widened to $20.8 million from a $19.0 million in Q4 2016. However, its loss per share narrowed to $.18 on 116.3 million shares of common stock outstanding from $.21 on 92.7 million shares of common stock outstanding a year ago. Wall Street had anticipated a loss per share of $.20.
The firm's R&D expenses in the quarter were down 4 percent to $15.6 million from $16.3 million in the prior-year quarter, while SG&A expenses were up 11 percent to $14.4 million from $13.0 million.
Full-year 2017 revenues rose 3 percent to $93.5 million from $90.7 million in 2016, beating Wall Street's estimate of $90.3 million.
Revenues included $80.0 million in product revenue, up from $64.6 million in 2016, and $13.4 million in service and other revenue, down from $14.0 million the year before. The firm also noted that 2016 revenues included $12.1 million in contractual revenues that was absent in 2017.
Sales of consumables were the primary driver for full-year 2017 revenues as well, increasing 75 percent to $41.5 million from $23.7 million in 2016. Instrument revenues fell to $38.6 million in 2017 from $41.0 million the year prior, due to the backlog of Sequel orders.
The company's net loss widened in 2017 to $92.2 million, or $.87 per share, from $74.4 million, or $.83 per share, in 2016, but it beat the analysts' average estimate of a loss per share of $.89.
Full-year 2017 R&D expenses fell 3 percent to $65.3 million from $67.6 million in 2016. SG&A expenses climbed 24 percent to $59.1 million in 2017 from $47.8 million in the prior year.
PacBio ended the year with $62.9 million in cash and investments, and $4.5 million in long-term restricted cash.
Looking ahead, Ben Gong, PacBio's VP of finance and treasurer, said that the company expects 2018 revenues to grow 20 percent over 2017 to around $112 million, again driven by consumables sales. Analysts are expecting revenues of $112.8 million for 2018.
He added that the firm anticipates a net loss of $81 million in 2018, and that it plans to raise additional capital this year.
PacBio's stock was down 2 percent on the Nasdaq in Friday morning trading.