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Pacific Biosciences Q2 Revenues Drop 14 Percent

NEW YORK – Pacific Biosciences reported after the close of the market on Monday that its second quarter 2020 revenues fell 14 percent year over year.

For the three months ended June 30, the Menlo Park, California-based company recognized total revenues of $17.1 million, compared to $24.6 million in Q2 2019, beating analysts' average estimate of $13.7 million. Revenues included $13.8 million in product revenue and $3.3 million in service and other revenue. The company completed 23 Sequel II installations, bringing the total installed base to 148 instruments.

"Financial results for the first six months of 2020 were negatively impacted as many of our customers in multiple regions around the world shut down operations for various periods of time in efforts to curb the spread of the COVID-19 pandemic," PacBio said in a statement. "This resulted in lower product revenues for the first six months of 2020 compared to the same period of 2019. Due to the uncertain scope and duration of the pandemic, we cannot reasonably estimate the future impact to our operations and financial results."

On a conference call following the release of results, PacBio CEO Mike Hunkapiller said the drop in revenues was particularly attributable to lower instrument utilization at customer sites due to the pandemic. While utilization has improved since the beginning of the quarter, in June about 20 percent of customer sites remained closed and utilization of the Sequel instrument continues to lag, he said.

On a positive note, Hunkapiller said the firm is making "significant progress" in driving adoption of its HiFi reads protocol.

PacBio's net loss in the quarter was $23.1 million, or $.15 per share, down from $24.6 million, or $.16 per share, in the prior year period, and beating the Wall Street estimate of $.18 loss per share.

The firm's R&D expenses in Q2 2020 were $15 million, essentially flat compared to a year ago. Its SG&A expenditures fell 21 percent year over year to $15.1 million from $19.1 million.

PacBio noted it paid $6 million in fees to its financial advisor in April, out of the $98 million reverse termination fee from Illumina following the abandonment of the merger agreement between the firms in January. The fee was "less than the amount we initially expected," the firm said.

As of June 30, the company had $120 million in cash and investments.

PacBio officials said they would not provide a financial forecast, due to uncertainty brought by the pandemic, and that many research institutions are taking a conservative approach to capital expenditures. "It will be difficult to predict when and how quickly instrument sales will recover," Hunkapiller said.

In afterhours trading on the Nasdaq, shares of PacBio were trading down five percent percent at $3.70.

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