Pacific Biosciences of California, Inc. (NASDAQ: PACB) today
announced financial results for its third quarter ended September
30, 2020.
Third Quarter 2020 Financial Results
Total revenue for the third quarter of 2020 was $19.1 million,
compared with $21.9 million for the same period of 2019. Instrument
revenue for the third quarter of 2020 was $7.7 million, compared
with $11.6 million for the same period of 2019. Consumables revenue
for the third quarter of 2020 was $8.0 million compared with $6.9
million for the same period of 2019. Service and other revenue for
the third quarter of 2020 was $3.4 million compared with $3.4
million for the same period of 2019.
Gross profit for the third quarter of 2020 was $7.1 million,
resulting in a gross margin of 37.0%. Gross profit for the third
quarter of 2019 was $6.9 million, resulting in a gross margin of
31.5%.
Operating expenses for the third quarter of 2020 totaled $31.2
million, compared to $35.0 million for the same period of 2019.
Operating expenses for the third quarter of 2020 and 2019 included
non-cash stock-based compensation of $4.3 million and $3.6 million,
respectively.
Net loss for the third quarter of 2020 was $23.7 million,
compared to $29.1 million for the same period of 2019.
Cash, cash equivalents and investments, excluding restricted
cash, at September 30, 2020 totaled $208.6 million, compared to
$49.1 million at December 31, 2019. The Company received $93.6
million in net proceeds, after deducting the underwriting discount
and offering expenses payable by the Company, from a public
offering of common stock in August 2020.
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.
The $98.0 million in cash we received from Illumina for the reverse
termination fee was recorded as a short-term liability as of
September 30, 2020 and, on October 1, 2020, after the contingency
clauses lapsed, it was subsequently recognized as a gain and will
be reflected in the fourth quarter of 2020 as other income.
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 of $34.0 million, which resulted in
a gain of $34.0 million for the three months ended March 31, 2020
and nine months ended September 30, 2020.
Recent Company Highlights
- Announced the appointments of
Christian Henry as President & Chief Executive Officer and
Susan Kim as Chief Financial Officer
- Launched the new Sequel IIe System,
representing the next evolution in our sequencing platform. The
system features significantly increased computational capacity and
on-instrument data processing to generate PacBio HiFi reads more
efficiently. The Sequel IIe system can reduce compute costs by 80%
or more when compared to the Sequel II system
- Entered into multiple collaborations
with customers focused on clinical research and potential
diagnostic applications using PacBio sequencing, including:
- A collaboration with Asuragen, Inc. to develop assays based on
SMRT Sequencing for the carrier screening market
- A collaboration with Children’s Mercy Kansas City to sequence a
cohort of rare disease cases for which previous whole-genome and
whole-exome sequencing studies using short-read sequencing yielded
no answers
- A collaboration with Invitae Corporation to study clinically
relevant targets for use in the development of advanced diagnostic
testing for epilepsy
“It is an exciting time to join Pacific Biosciences,” said
Christian Henry. “Our newly launched Sequel IIe instrument will
make the use of our long-read technology accessible to more
customers than ever before. In addition, HiFi sequencing provides
researchers with more complete and accurate sequences, which is one
reason why we are engaging in so many important customer
collaborations. With the positive customer momentum building around
PacBio HiFi sequencing, we expect sequential growth for Q4.
Notwithstanding capital sales being impacted in the near term as a
result of the COVID-19 pandemic, we continue to be enthusiastic
about the long-term growth opportunity for the business.”
Impact of COVID-19 Pandemic
Financial results for the nine 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 nine 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.
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 continue to work remotely from their homes.
Additionally, we have implemented health and safety practices in
accordance with evolving government and public health agency
guidelines. 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. 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
third quarter ended September 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 # 5173038. The call will be webcast live and
will be available for replay at Pacific Biosciences’ website at
https://investor.pacificbiosciences.com/.
About Pacific Biosciences
Pacific 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 Statements
All statements in this press release that are not historical are
forward-looking statements, including, among other things, our
financial outlook for the fourth quarter of 2020 and long-term, the
accounting treatment of payments we received from Illumina,
expectations related to the newly launched Sequel IIe instrument,
the future impact of COVID-19 on our business, including the impact
to revenue and the impact and sufficiency of safety measures we
have implemented. 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 650.521.8450
ir@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, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Product revenue |
$ |
15,749 |
|
|
$ |
18,484 |
|
|
$ |
41,798 |
|
|
$ |
53,191 |
|
Service and other revenue |
|
3,333 |
|
|
|
3,431 |
|
|
|
9,959 |
|
|
|
9,770 |
|
Total revenue |
|
19,082 |
|
|
|
21,915 |
|
|
|
51,757 |
|
|
|
62,961 |
|
Cost of Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue |
|
9,228 |
|
|
|
12,188 |
|
|
|
22,874 |
|
|
|
32,786 |
|
Cost of service and other revenue |
|
2,790 |
|
|
|
2,813 |
|
|
|
7,718 |
|
|
|
8,531 |
|
Total cost of revenue |
|
12,018 |
|
|
|
15,001 |
|
|
|
30,592 |
|
|
|
41,317 |
|
Gross profit |
|
7,064 |
|
|
|
6,914 |
|
|
|
21,165 |
|
|
|
21,644 |
|
Operating Expense: |
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
16,467 |
|
|
|
14,962 |
|
|
|
46,727 |
|
|
|
45,357 |
|
Sales, general and administrative |
|
14,772 |
|
|
|
20,066 |
|
|
|
54,846 |
|
|
|
58,915 |
|
Total operating expense |
|
31,239 |
|
|
|
35,028 |
|
|
|
101,573 |
|
|
|
104,272 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(24,175 |
) |
|
|
(28,114 |
) |
|
|
(80,408 |
) |
|
|
(82,628 |
) |
Gain from Continuation Advances from Illumina |
|
— |
|
|
|
— |
|
|
|
34,000 |
|
|
|
— |
|
Interest expense |
|
— |
|
|
|
(664 |
) |
|
|
(267 |
) |
|
|
(1,933 |
) |
Other income (expenses), net |
|
467 |
|
|
|
(345 |
) |
|
|
1,143 |
|
|
|
518 |
|
Net loss |
$ |
(23,708 |
) |
|
$ |
(29,123 |
) |
|
$ |
(45,532 |
) |
|
$ |
(84,043 |
) |
Basic and diluted net loss per
share |
$ |
(0.14 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.55 |
) |
Shares used in computing basic
and diluted net loss per share |
|
166,862 |
|
|
|
152,983 |
|
|
|
158,195 |
|
|
|
152,351 |
|
Pacific Biosciences of California,
Inc.Unaudited Condensed Consolidated Balance
Sheets (amounts in thousands)
|
September 30, |
|
December 31, |
|
2020 |
|
2019 |
Assets |
|
|
|
Cash and investments |
$ |
208,550 |
|
$ |
49,099 |
Accounts receivable |
|
11,806 |
|
|
15,266 |
Inventory |
|
15,940 |
|
|
13,312 |
Prepaid and other current assets |
|
3,212 |
|
|
3,369 |
Property and equipment, net |
|
26,568 |
|
|
30,070 |
Operating lease right-of-use assets, net |
|
30,700 |
|
|
32,827 |
Long-term restricted cash |
|
3,500 |
|
|
4,000 |
Other long-term assets |
|
42 |
|
|
42 |
Total
Assets |
$ |
300,318 |
|
$ |
147,985 |
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
Accounts payable |
$ |
5,406 |
|
$ |
8,368 |
Accrued expenses |
|
15,079 |
|
|
13,242 |
Deferred gain from Reverse Termination Fee from Illumina |
|
98,000 |
|
|
— |
Deferred revenue |
|
8,743 |
|
|
9,561 |
Operating lease liabilities |
|
43,010 |
|
|
45,801 |
Notes payable |
|
— |
|
|
15,871 |
Other liabilities |
|
584 |
|
|
225 |
Stockholders' equity |
|
129,496 |
|
|
54,917 |
Total Liabilities and
Stockholders' Equity |
$ |
300,318 |
|
$ |
147,985 |
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