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PacBio's Q3 Revenues Jump 164 Percent

NEW YORK (GenomeWeb News) – Pacific Biosciences reported after the close of the market Tuesday that its third quarter 2013 revenues climbed 164 percent year over year and grew 23 percent sequentially.

The Menlo Park, Calif.-based single-molecule sequencing technologies firm reported Q3 revenues of $7.4 million, compared to just $2.8 million in Q3 2012 and up from $6 million in Q2 2013. It beat the consensus Wall Street estimate of $7.1 million in revenues for the quarter.

Revenue reflects the installation of six PacBio RS II machines. The company booked five new systems, ending the quarter with nine systems in backlog and an installed base of 83. It also took seven orders for upgrades to the PacBio RS II, bringing its total upgrades to 61 out of a possible 74 that were installed prior to the release of the RS II.

The five new system bookings, while up year over year from four, were down from the seven it booked in the previous quarter. President and CEO Mike Hunkapiller said during a conference call discussing the firm's third quarter results that while the company is "a bit disappointed with the sequential decrease, we continue to have a healthy pipeline, and for the year we continue to target a doubling of total 2013 bookings compared with our bookings for last year."

Looking forward, Ben Gong, PacBio's VP of finance and treasurer, said that the US federal government shutdown will have an impact on consumable sales in the fourth quarter. "Several of our busier customers were not permitted to run their systems," he said. Gong said that normally the company would predict sequential growth in consumable revenue in the fourth quarter, but the government shutdown may cause consumable revenue to be flat.

Product revenue for Q3 was $5.8 million, up from $1.3 million in the year-ago quarter, and also up sequentially from $4.6 million. Total product revenue included $3.7 million in instrument revenue compared to none in the prior year's third quarter, and $2.1 million in consumable revenue, a 64 percent increase year over year

Service and other revenue was up year over year to $1.6 million from $1.3 million, and up sequentially from $1.4 million.

PacBio's R&D costs were $10.4 million, down 17 percent year over year from $12.6 million, while SG&A costs were $10.8 million, up 7 percent from $10.1 million in Q3 2012.

Its operating expenses included $2.0 million in advisory and professional fees connected to the company's development, commercialization, and license agreement with Roche Diagnostics announced in September.

With regards to the Roche deal, Hunkapiller did not provide many additional details but said that it "accelerates our ability to participate in the large and growing molecular diagnostic market."

PacBio posted a net loss of $20.5 million, or $.31 per share, down from $22.7 million, or $.41 per share, in the prior year's quarter. It fell just shy of the average analyst estimate for a loss of $.30 per share.

The company ended the quarter with cash and investments of $126.9 million compared to $107.0 million at June 30, 2013. This increase reflects an up-front, non-refundable $35.0 million payment received from Roche.

In Wednesday morning trade on the Nasdaq, shares of PacBio were down 14 percent at $4.50.