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Pacific Biosciences' Q1 Revenues Better Than Anticipated, Down Sequentially

NEW YORK (GenomeWeb News) – Pacific Biosciences reported after the close of the market Tuesday first-quarter revenues of $10 million, beating Wall Street's consensus estimate of $7.1 million.

The revenues compared to $270,000 in revenue for the first quarter of 2011, before the firm launched its PacBio RS system. The Q1 2012 revenues compare to fourth-quarter 2011 revenues of $12.4 million.

PacBio's product revenue for the first quarter was $8.7 million versus $11.5 million for Q4 2011 and no product revenues for Q1 2011. Service and other revenues were $1.1 million, up from $760,000 for Q4 2011.

Ben Gong, VP of finance and treasurer of PacBio, said on a conference call following the release of the results that the firm installed more instruments than anticipated during the quarter, which led to the higher revenue figure than the company's previous guidance of between $7 million and $8 million. With the 11 instruments shipped during Q1, PacBio now has an installed base of 59 systems.

PacBio officials also said that consumables had sequential revenue growth of $900,000.

PacBio launched its C2 chemistry in early February and finished upgrading all of its systems in the field by mid-April, Chairman, President and CEO Michael Hunkapiller said on the call. The C2 chemistry is designed to provide longer read lengths, better accuracy, and higher throughput of the RS systems.

Hunkapiller said the firm has made significant progress with system reliability and performance, and since the C2 launch many customers are reporting average read lengths exceeding 3,000 bases, with some reads as long as 15,000.

"The consistency of the output is much improved," he added. "As a result, utilization rates for systems in the field have picked up and we see evidence of this in our consumables shipments."

The firm's net loss for the quarter was $27.6 million, or $.50 per share, compared to $34.8 million, or $.66 per share, for the first quarter of 2011. Its Q4 2011 net loss was $22.8 million, or $.42 per share.

PacBio's net loss was affected by a one-time $1.8 million expense to settle lawsuits with Life Technologies and Helicos BioSciences. That increased its loss per share by $.03.

Analysts had expected a loss per share of $.47.

PacBio's R&D spending was cut in half year over year to $12.1 million from $24.1 million, while its SG&A expenses were up 38 percent to $15.3 million from $11.1 million.

The firm finished the year with $161.3 million in cash and investments. It expects to burn around $80 million in 2012, said Gong.

PacBio's system revenue backlog as of the end of the quarter was $4.7 million, representing orders for seven RS instruments. Assuming those seven instruments are installed during the quarter, PacBio expects second-quarter revenues of around $7 million.

Among the products it expects to release in the coming months is a software tool that will enable customers to perform base modification analyses with the system, said Hunkapiller. And later in the second quarter, the firm intends to launch software tools for analyzing the kinetic data captured by the PacBio RS.

In early Wednesday trade on the Nasdaq, shares of PacBio were down around 3 percent at $2.51.

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