Pacific Biosciences of California, Inc. (NASDAQ: PACB) today
announced financial results for its second quarter ended June 30,
2020.
Total revenue for the second quarter of 2020 was $17.1 million,
compared with $24.6 million for the same period of 2019. Instrument
revenue for the second quarter of 2020 was $8.9 million, compared
with $12.7 million for the same period of 2019. Consumables revenue
for the second quarter of 2020 was $4.8 million compared with $8.6
million for the same period of 2019. Service and other revenue for
the second quarter of 2020 was $3.3 million compared with $3.4
million for the same period of 2019.
Gross profit for the second quarter of 2020 was $6.6 million,
resulting in a gross margin of 38.7%. Gross profit for the second
quarter of 2019 was $9.6 million, resulting in a gross margin of
39.0%.
Operating expenses for the second quarter of 2020 totaled $30.1
million, compared to $34.0 million for the same period of 2019.
Operating expenses for the second quarter of 2020 and 2019 included
non-cash stock-based compensation of $2.8 million and $3.6 million,
respectively.
Net loss for the second quarter of 2020 was $23.1 million,
compared to $24.6 million for the same period of 2019.
Cash, cash equivalents and investments, excluding restricted
cash, at June 30, 2020 totaled $120.0 million, compared to $49.1
million at December 31, 2019.
As previously announced, in January 2020, we and Illumina
mutually agreed to terminate the Agreement and Plan of Merger (as
amended, the “Merger Agreement”). As part of our agreement to
terminate the Merger Agreement, Illumina paid us a $98.0 million
reverse termination fee in January 2020, from which we paid our
financial advisor associated fees of $6.0 million in April 2020,
which is less than the amount we initially expected. The $98.0
million in cash we received from Illumina is recorded as a
short-term liability and is expected to be subsequently recorded as
other income after September 30, 2020 when all contingency clauses
are expected to lapse. In addition, during the first quarter ended
March 31, 2020, as previously agreed to pursuant to the terms of
the Merger Agreement, Illumina paid us cash payments (“Continuation
Advances”) of $34.0 million, which resulted in a gain of $34.0
million for the quarter ended March 31, 2020 and six months ended
June 30, 2020.
Impact of COVID-19 Pandemic
We have implemented various measures to help protect our
employees while continuing to support our customers. In
accordance with local and state guidelines, a large number of our
Menlo Park-based employees are working remotely from their homes.
Additionally, we have implemented health and safety practices in
accordance with evolving government and public health agency
guidelines. However, as Pacific Biosciences is a designated
essential business, we continue to provide direct support to our
customers, including those customers working on COVID-19 related
research, testing, treatment, and prevention. This support includes
consumable and instrument shipments, field support, and limited
wet-lab activities.
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. 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.
As noted above, there were provisions in the Merger Agreement to
provide us with significant funding in the event that the merger
did not close. As a result, we ended the second quarter of 2020
with $120.0 million in Cash and Investments. However, we will
continue to monitor our operating expenses and cash flows in
response to the evolving market conditions.
Quarterly Conference Call Information
Management will host a quarterly conference call to discuss its
second quarter ended June 30, 2020 results today at 4:30 p.m.
Eastern Time. Investors may listen to the call by dialing
1.888.366.7247, or if outside the U.S., by dialing +1.707.287.9330,
using Conference ID # 7079947. The call will be webcast live and
will be available for replay at Pacific Biosciences’ website at
https://investor.pacificbiosciences.com/.
About Pacific BiosciencesPacific Biosciences of
California, Inc. (NASDAQ:PACB), is empowering life scientists
with highly accurate long-read sequencing. The company’s innovative
instruments are based on Single Molecule, Real-Time
(SMRT®) Sequencing technology,
which delivers a comprehensive view of genomes,
transcriptomes, and epigenomes, enabling access to the
full spectrum of genetic variation in any organism. Cited in
thousands of peer-reviewed publications,
PacBio® sequencing systems are in use by scientists
around the world to drive discovery in human biomedical
research, plant and animal sciences, and microbiology.
Forward-Looking StatementsAll statements in
this press release that are not historical are forward-looking
statements, including, among other things, the accounting treatment
of cash payments we received from Illumina, the impact of COVID-19
on our business including whether customers take delivery of our
systems, Pacific Biosciences’ potential development and
commercialization of products, future uses, quality or performance
of, or benefits of using, products or technologies, 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
Pacific Biosciences’ 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 June 30, |
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
$ |
13,756 |
|
|
$ |
21,250 |
|
|
$ |
26,049 |
|
|
$ |
34,707 |
|
Service and other revenue |
|
3,321 |
|
|
|
3,371 |
|
|
|
6,626 |
|
|
|
6,339 |
|
Total revenue |
|
17,077 |
|
|
|
24,621 |
|
|
|
32,675 |
|
|
|
41,046 |
|
Cost of Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
8,225 |
|
|
|
11,980 |
|
|
|
13,646 |
|
|
|
20,598 |
|
Cost of service and other revenue |
|
2,239 |
|
|
|
3,028 |
|
|
|
4,928 |
|
|
|
5,718 |
|
Total cost of revenue |
|
10,464 |
|
|
|
15,008 |
|
|
|
18,574 |
|
|
|
26,316 |
|
Gross profit |
|
6,613 |
|
|
|
9,613 |
|
|
|
14,101 |
|
|
|
14,730 |
|
Operating Expense: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
15,010 |
|
|
|
14,910 |
|
|
|
30,260 |
|
|
|
30,395 |
|
Sales, general and administrative |
|
15,127 |
|
|
|
19,083 |
|
|
|
40,074 |
|
|
|
38,849 |
|
Total operating expense |
|
30,137 |
|
|
|
33,993 |
|
|
|
70,334 |
|
|
|
69,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(23,524 |
) |
|
|
(24,380 |
) |
|
|
(56,233 |
) |
|
|
(54,514 |
) |
Gain from Continuation Advances from Illumina |
|
— |
|
|
|
— |
|
|
|
34,000 |
|
|
|
— |
|
Interest expense |
|
— |
|
|
|
(644 |
) |
|
|
(267 |
) |
|
|
(1,269 |
) |
Other income, net |
|
438 |
|
|
|
428 |
|
|
|
676 |
|
|
|
863 |
|
Net loss |
$ |
(23,086 |
) |
|
$ |
(24,596 |
) |
|
$ |
(21,824 |
) |
|
$ |
(54,920 |
) |
Basic and diluted net loss per share |
$ |
(0.15 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.36 |
) |
Shares used in computing basic and diluted net loss per
share |
|
154,172 |
|
|
|
152,776 |
|
|
|
153,229 |
|
|
|
152,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pacific Biosciences of California,
Inc.Unaudited Condensed Consolidated Balance
Sheets (amounts in thousands)
|
June
30, |
|
December
31, |
|
2020 |
|
2019 |
Assets |
|
|
|
Cash and investments |
$ |
119,963 |
|
$ |
49,099 |
Accounts receivable |
|
11,346 |
|
|
15,266 |
Inventory |
|
16,768 |
|
|
13,312 |
Prepaid and other current assets |
|
2,862 |
|
|
3,369 |
Property and equipment, net |
|
27,733 |
|
|
30,070 |
Operating lease right-of-use assets, net |
|
31,435 |
|
|
32,827 |
Long-term restricted cash |
|
3,500 |
|
|
4,000 |
Other long-term assets |
|
41 |
|
|
42 |
Total
Assets |
$ |
213,648 |
|
$ |
147,985 |
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Accounts payable |
$ |
7,436 |
|
$ |
8,368 |
Accrued expenses |
|
12,203 |
|
|
13,242 |
Deferred gain from Reverse Termination Fee from Illumina |
|
98,000 |
|
|
— |
Deferred revenue |
|
8,463 |
|
|
9,561 |
Operating lease liabilities |
|
43,966 |
|
|
45,801 |
Notes payable |
|
— |
|
|
15,871 |
Other liabilities |
|
2,188 |
|
|
225 |
Stockholders' equity |
|
41,392 |
|
|
54,917 |
Total Liabilities and
Stockholders' Equity |
$ |
213,648 |
|
$ |
147,985 |
|
|
|
|
|
|
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