Pacific Biosciences of California, Inc. Announces Third Quarter 2019 Financial Results
November 07 2019 - 4:01PM
Pacific Biosciences of California, Inc. (NASDAQ: PACB) (the
“Company’) today announced financial results for its third quarter
ended September 30, 2019.
The Company has continued its commercial launch of the Sequel II
System, which it began during the second quarter of 2019. As
of September 30, 2019, the Company had installed a total of 75
Sequel II Systems, which includes a number of sites with multiple
systems installed. Instrument revenue for the three months
ended September 30, 2019 totaled $11.6 million, compared with $6.3
million in instrument revenue for the same period in 2018, driven
by robust demand for Sequel II instruments. However,
consumable revenue for the three months ended September 30, 2019
totaled $6.9 million, compared with $8.9 million for the same
period in 2018. The decrease in consumable revenue was driven by
lower utilization of Sequel instruments as a number of customers
are transitioning from Sequel to Sequel II. Total revenue for the
third quarter of 2019 was $21.9 million, compared with $18.2
million for the third quarter of 2018.
On November 1, 2018, the Company entered into an Agreement and
Plan of Merger with Illumina, Inc. (“Illumina”) and FC Ops Corp.
(“Merger Subsidiary”), a wholly-owned subsidiary of Illumina (the
“Merger Agreement”) pursuant to which Illumina will acquire the
Company for $8.00 per share of the Company’s common stock in an
all-cash transaction and Merger Subsidiary will be merged with and
into the Company (the “Merger”), with the Company surviving the
Merger and becoming a wholly-owned subsidiary of Illumina.
Completion of the transaction is subject to terms and conditions
set forth in the Merger Agreement, including expiration or
termination of any waiting periods applicable to the consummation
of the Merger under the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and clearance under the
antitrust laws of certain non-U.S. jurisdictions. The Merger has
been notified to the United States Federal Trade Commission (“FTC”)
and to the Competition and Markets Authority of the United Kingdom
(“CMA”) and is under review by both the FTC and the CMA. The
Company and Illumina continue to work cooperatively with the FTC
and the CMA.
On September 25, 2019, the Company, Illumina and Merger
Subsidiary entered into Amendment No. 1 (the “Amendment”) to the
Merger Agreement. The Amendment, among other things, extends the
End Time (as defined in the Merger Agreement) to December 31, 2019,
subject to Illumina’s unilateral right to further extend the End
Time to March 31, 2020. In addition, the Amendment provides that
Illumina will make cash payments to the Company of $6 million on or
before each of October 1, 2019, November 1, 2019 and December 2,
2019 and we have received the October 1, 2019 and November 1, 2019
cash payments. If Illumina elects to further extend the End Time to
March 31, 2020, then Illumina will make cash payments to the
Company of $6 million on or before each of January 2, 2020, and
March 2, 2020, and a cash payment of $22 million on or before
February 3, 2020. The Company will use these payments, which are
collectively referred to as the “Continuation Advances,” to fund
its continuing operations. Up to the full amount of the
Continuation Advances actually paid to the Company are repayable
without interest if (1) the Merger Agreement is terminated and (2)
within two years of termination, the Company enters into certain
change-of-control transactions with a third party (in which case
the entire amount will be repayable) or raises at least $100
million in equity or debt financing in a single transaction (with
the amount repayable dependent on the amount raised by the
Company).
For the three and nine months ended September 30, 2019, the
Company recognized approximately $3.6 million and $12.8 million,
respectively, in operating expenses in connection with the
Merger.
No Conference Call
Given the pending Merger with Illumina, management will not be
hosting a conference call to discuss its financial results for the
third quarter ended September 30, 2019 and does not expect to do so
for future quarters.
About Pacific Biosciences
Pacific Biosciences of California, Inc. (NASDAQ: PACB) offers
sequencing systems to help scientists resolve genetically complex
problems. Based on its novel SMRT® Technology, Pacific Biosciences’
products enable: de novo genome assembly to finish genomes in order
to more fully identify, annotate and decipher genomic structures;
full-length transcript analysis to improve annotations in reference
genomes, characterize alternatively spliced isoforms in important
gene families, and find novel genes; targeted sequencing to more
comprehensively characterize genetic variations; and real-time
kinetic information for epigenome characterization. Pacific
Biosciences’ technology provides high accuracy, ultra-long reads,
uniform coverage, and the ability to simultaneously detect
epigenetic changes. PacBio® sequencing systems, including
consumables and software, provide a simple, fast, end-to-end
workflow for SMRT Sequencing.
Forward-Looking StatementsAll statements in
this press release that are not historical are forward-looking
statements, including, among other things, statements relating to
the timeline for Pacific Biosciences’ potential development and
commercialization of products, future uses, quality or performance
of, or benefits of using, products or technologies, the commercial
launch of the Sequel II System, the expected availability of SMRT®
Cell 8M chips, the performance of the Sequel II System, the Merger
Agreement and Merger including the expected timing of the
completion of the Merger and whether the Merger will be
consummated, and other future events. You should not place undue
reliance on forward-looking statements because they involve known
and unknown risks, uncertainties, changes in circumstances and
other factors that are, in some cases, beyond Pacific Biosciences’
control and could cause actual results to differ materially from
the information expressed or implied by forward-looking statements
made in this press release. Factors that could materially affect
actual results can be found in Pacific Biosciences’ most recent
filings with the Securities and Exchange Commission, including
Pacific Biosciences’ most recent reports on Forms 8-K, 10-K and
10-Q, and include those listed under the caption “Risk Factors.”
Pacific Biosciences undertakes no obligation to revise or update
information in this press release to reflect events or
circumstances in the future, even if new information becomes
available.
The condensed consolidated financial statements that follow
should be read in conjunction with the notes set forth in the
Company’s Quarterly Report on Form 10-Q when filed with the
Securities and Exchange Commission.
Contact: Trevin Rard
650.521.8450ir@pacificbiosciences.com
Pacific Biosciences of California,
Inc.Unaudited Condensed Consolidated Statement of
Operations (amounts in thousands, except per share
amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
$ |
18,484 |
|
|
$ |
15,150 |
|
|
$ |
53,191 |
|
|
$ |
49,917 |
|
Service and other revenue |
|
3,431 |
|
|
|
3,010 |
|
|
|
9,770 |
|
|
|
9,183 |
|
Total revenue |
|
21,915 |
|
|
|
18,160 |
|
|
|
62,961 |
|
|
|
59,100 |
|
Cost of Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
12,188 |
|
|
|
12,250 |
|
|
|
32,786 |
|
|
|
31,127 |
|
Cost of service and other revenue |
|
2,813 |
|
|
|
2,718 |
|
|
|
8,531 |
|
|
|
8,623 |
|
Total cost of revenue |
|
15,001 |
|
|
|
14,968 |
|
|
|
41,317 |
|
|
|
39,750 |
|
Gross profit |
|
6,914 |
|
|
|
3,192 |
|
|
|
21,644 |
|
|
|
19,350 |
|
Operating Expense: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
14,962 |
|
|
|
14,356 |
|
|
|
45,357 |
|
|
|
46,331 |
|
Sales, general and administrative |
|
20,066 |
|
|
|
13,506 |
|
|
|
58,915 |
|
|
|
43,383 |
|
Total operating expense |
|
35,028 |
|
|
|
27,862 |
|
|
|
104,272 |
|
|
|
89,714 |
|
Operating loss |
|
(28,114 |
) |
|
|
(24,670 |
) |
|
|
(82,628 |
) |
|
|
(70,364 |
) |
Interest expense |
|
(664 |
) |
|
|
(616 |
) |
|
|
(1,933 |
) |
|
|
(1,795 |
) |
Other income (expense), net |
|
(345 |
) |
|
|
242 |
|
|
|
518 |
|
|
|
396 |
|
Net loss |
$ |
(29,123 |
) |
|
$ |
(25,044 |
) |
|
$ |
(84,043 |
) |
|
$ |
(71,763 |
) |
Basic and diluted net loss per share |
$ |
(0.19 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.55 |
) |
Shares used in computing basic and diluted net loss per
share |
|
152,983 |
|
|
|
135,130 |
|
|
|
152,351 |
|
|
|
130,302 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Biosciences of California,
Inc.Unaudited Condensed Consolidated Balance
Sheets (amounts in thousands)
|
September
30, |
|
December 31, |
|
2019 |
|
2018 |
Assets |
|
|
|
Cash and investments |
$ |
49,204 |
|
$ |
102,354 |
Accounts receivable |
|
9,966 |
|
|
8,595 |
Inventory |
|
15,067 |
|
|
17,878 |
Prepaid and other current assets |
|
2,704 |
|
|
2,832 |
Property and equipment, net |
|
31,618 |
|
|
34,073 |
Operating lease right-of-use assets, net |
|
33,510 |
|
|
— |
Long-term restricted cash |
|
4,000 |
|
|
4,500 |
Other long-term assets |
|
41 |
|
|
43 |
Total Assets |
$ |
146,110 |
|
$ |
170,275 |
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
Accounts payable |
$ |
8,111 |
|
$ |
6,736 |
Accrued expenses |
|
15,823 |
|
|
12,823 |
Deferred service revenue |
|
7,814 |
|
|
7,427 |
Operating lease liabilities |
|
46,692 |
|
|
— |
Notes payable |
|
15,546 |
|
|
14,659 |
Deferred rent |
|
— |
|
|
13,765 |
Other liabilities |
|
1,110 |
|
|
788 |
Financing derivative |
|
— |
|
|
16 |
Stockholders' equity |
|
51,014 |
|
|
114,061 |
Total Liabilities and Stockholders' Equity |
$ |
146,110 |
|
$ |
170,275 |
|
|
|
|
|
|
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