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PacBio Reports 18 Percent Q2 Revenue Drop, Books Seven Systems Orders

NEW YORK (GenomeWeb News) – Pacific Biosciences reported after the close of market on Thursday that while its second quarter 2013 revenues dropped roughly 18 percent year over year, its revenues grew 7 percent sequentially.

The Menlo Park, Calif.-based single-molecule sequencing technologies firm reported total revenues of $6 million for the three months ended June 30, compared to $7.3 million in the second quarter of 2012, and $5.6 million in the first quarter of 2013. It fell just shy of the consensus Wall Street estimate for revenues of $6.1 million.

Revenue reflects the installation of three PacBio RS II systems, the sale of reagent consumables, upgrades from the RS to the RS II system, and instrument service contracts.

Product revenue was $4.6 million, down from $5.8 in the year ago quarter, but up from $3.8 million in the first quarter of 2013. Service and other revenue was up year over year to $1.4 million from $1.3 million, and flat sequentially.

The company booked orders for seven of its PacBio RS II instruments in the quarter, matching its record for number of systems booked in a single quarter. It ended the quarter with 10 systems in backlog.

"We're certainly seeing an increased interest in the technology," President and CEO Mike Hunkapiller said during a conference call to discuss the company's second quarter performance. "Our pipeline is starting to grow again."

Instrument bookings have picked up significantly from the prior year's second quarter, when the firm booked just one system. Bookings were also up from the four systems the company booked in the first quarter this year.

The company also took orders for 23 upgrades to the RS II, adding to the 31 upgrades it booked in the first quarter. The RS II upgrade doubles the throughput compared to the RS system.

Upgrades to 34 systems were completed in the second quarter, contributing around $700,000 in revenue, said Ben Gong, the firm's VP of finance and treasurer. PacBio anticipates installing "most, if not all," of the 20 upgrades in backlog during the third quarter, Gong added.

Going forward, Gong said the firm anticipates that its third-quarter revenue will grow sequentially and that the company expects to "at least double" its total instrument bookings over 2012, from 12. As such, Gong said that total 2013 revenue would be higher than total 2012 revenue of $26.0 million.

PacBio's R&D costs for the quarter were $11.7 million, compared to $11.3 million in the second quarter of 2012, while SG&A expenses dropped to $9.4 million from $11.6 million in Q2 2012.

The firm's net loss for the quarter was $20.5 million, or $.33 per share, compared to $22.5 million, or $.40 per share, in Q2 2012. It beat analysts' consensus estimate for a loss of $.35 per share.

PacBio held cash and investments of $107 million as of the end of the quarter.