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Pacific Biosciences Q3 Revenues Climb 178 Percent

NEW YORK (GenomeWeb News) – Pacific Biosciences reported after the close of the market Thursday that its third quarter 2014 revenues rose 178 percent year over year and 81 percent sequentially.

The Menlo Park, Calif.-based single-molecule sequencing technologies firm reported Q3 revenues of $20.6 million, compared to $7.4 million in Q3 2013 and $11.4 million in Q2 2014. It beat the consensus Wall Street estimate of $17.2 million in revenues for the quarter.

Its product revenues were $6.8 million, up 17 percent from $5.8 million in the year-ago third quarter, while service and other revenue increased 38 percent to $2.2 million from $1.6 million in Q3 2013. Product revenues included $3.3 million in consumable revenue and $3.5 million in instrument revenue.

The company installed six PacBio RS II instruments in the quarter and took orders for 16 systems, ending the quarter with 20 instruments in backlog. In addition, the firm's revenues included a $10 million milestone payment related to its Roche agreement along with $1.7 million in quarterly payments.

"The jump in bookings this past quarter was characterized by multiple-unit system orders and repeat sales to existing customers," CEO Mike Hunkapiller said during a conference call discussing the company's third quarter performance. The US Centers for Disease Control and Prevention ordered two systems in Q3, adding to the one it already had installed, Hunkapiller said. In addition, the Icahn Institute for Genomics and Multiscale Biology at Mt. Sinai purchased its third system this quarter, which it plans to install in a new facility in Connecticut. The University of Zurich and the University of Tokyo each ordered a second system.

Due to its strong bookings in the quarter and the $10 million milestone payment from Roche, the company expects its FY 2014 revenues to more than double those reported for FY 2013, up from its previous estimate of 70 percent growth year over year. According to Ben Gong, vice president of finance and treasurer, the company expects FY 2014 revenues to be over $58 million, up from $28.2 million. Previously, it had predicted total revenues would be between $47 million and $48 million.

Going forward, Hunkapiller said that one new source of potential revenue is customers who are investing in Illumina HiSeq X Ten systems for large-scale human sequencing studies that want to use PacBio's long reads to get further clarity on structural variations and other complex regions, like the major histocompatibility complex. As evidence, he cited Korean firm Macrogen and J. Craig Venter's Human Longevity, each of which purchased two PacBio RS II instruments after having invested in HiSeq X Ten systems.

PacBio posted a net loss for the quarter of $9.2 million, or $.13 per share, down substantially from its Q3 2013 net loss of $20.5 million, or $.31 per share. It beat the average Wall Street estimate for a loss per share of $.16.

The firm's R&D expenses increased this quarter to $11.7 million from $10.4 million in Q3 2013, while SG&A expenses fell to $9.9 million from $10.8 million year over year.

As of Sept. 30, Pacific Biosciences had cash and investments totaling $99.3 million.

In Friday morning trade on the Nasdaq, shares of PacBio were up around 4 percent at $5.91.