NEW YORK (GenomeWeb) – Pacific Biosciences reported after the close of the market on Wednesday that its third quarter 2016 revenue jumped 80 percent over the third quarter of 2015.
The Menlo Park, California-based single-molecule sequencing firm reported $25.1 million total revenues in Q3 2016, up from $13.9 million in Q3 2015, and beating analysts' average estimate of $24.7 million. Product revenue increased to $18.1 million from $7.6 million and included $11.5 million in instrument revenue and $6.5 million in consumables revenue. Service and other revenue increased to $3.5 million from $2.8 million. In both quarters, PacBio recognized $3.6 million in contractual revenue from Roche.
PacBio shipped and installed 30 of its Sequel instruments in the quarter, bringing its total Sequel installations to over 75, CEO Mike Hunkapiller said during a conference call discussing the firm's Q3 performance. The company received orders for 20 instruments in the quarter, including for both Sequel and RSII, and now has a backlog of 40 systems. The order rate was lower than expected, and as a result, the company lowered its revenue expectations for full-year 2016.
Ben Gong, PacBio's vice president of finance and treasurer, said during the call that the company now expects its full-year product and services revenue to grow 55 percent to 65 percent over 2015's product and services revenue, down from a previous estimate of a 70 percent growth rate. The company anticipates total 2016 revenues will be between $86 million and $90 million, down from a previous estimate of $93 million.
Hunkapiller said that the lower-than-expected Sequel order rate was not due to a lack of interest in the system, but rather to the delays in SMRT cell production and slower activity during the summer months, which delayed the release of data from the instrument.
PacBio's net loss was $17.5 million, or $.19 per share, besting the Wall Street loss-per-share estimate of $.20. In Q3 2015, PacBio had net income of $1.8 million and EPS of $.02 per share, although that was driven primarily by a one-time gain on lease amendments of $23.0 million.
The company's R&D expenses totaled $17.5 million in the quarter, up from $16.2 million in the prior-year period, while SG&A expenses were $11.9 million, up from $10.9 million.
PacBio ended the quarter with $87.3 million in cash and investments.
The company also said today that it has filed a complaint with the US International Trade Commission against Oxford Nanopore. The complaint alleges that Oxford Nanopore's MinIon and PromethIon devices infringe on claims in US Patent No. 9,404,146 titled: Compositions and methods for nucleic acid sequencing. PacBio owns the '146 patent, which was issued this past August, and covers methods related to single-molecule sequencing using linked double-stranded nucleic acid templates in order to improve sequencing accuracy.
PacBio has asked the ITC to investigate the alleged infringement and to permanently bar infringing Oxford Nanopore products from entry into the US, as well as to prevent Oxford Nanopore from advertising or selling infringing products in the US.
"As a pioneer in the field of single-molecule, long-read sequencing, we have invested hundreds of millions of dollars in research and development across a broad array of disciplines, including nanofabrication, physics, organic chemistry, photonics, optics, molecular biology, engineering, signal processing, high-performance computing, and bioinformatics," Michael Hunkapiller, PacBio CEO, said in a statement. "We stand firm in our resolve to protect that investment and our leadership position in the field we have created."
In Thursday morning trading, PacBio's stock was down around 15 percent to $7.02.