Full Press Release Details
Pacific Biosciences of California, Inc. Announces Second Quarter 2019 Financial Results
Menlo Park, Calif. August 6, 2019 Pacific Biosciences of California, Inc. (NASDAQ: PACB) today announced financial results for its second quarter ended June 30, 2019.
On April 24, 2019, the Company announced the commercial launch of the Sequel II System and the Single Molecule, Real-Time (SMRT ) Cell 8M chip, and began shipping Sequel II Systems to customers beyond the five early access sites. As of June 30, 2019, the Company had installed a total of 41 Sequel II Systems, which includes a number of sites with multiple systems installed.
On November 1, 2018, the Company entered into an Agreement and Plan of Merger with Illumina, Inc. ( Illumina ) and FC Ops Corp., 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 FC Ops Corp. 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 will continue to work cooperatively with the FTC and the CMA. The Company and Illumina expect the Merger to be completed in the fourth quarter of 2019, at which time the Company will become a wholly owned subsidiary of Illumina and will cease to be a publicly traded company. For the three and six months ended June 30, 2019, the Company recognized approximately $3.8 million and $9.3 million, respectively, in operating expenses in connection with the Merger.
Given the pending Merger with Illumina, management will not be hosting a conference call to discuss its financial results for the second quarter ended June 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 Statements
All 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.
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, | ||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||
| Revenue: | |||||||||||
| Product revenue | $ | 21,250 | $ | 18,485 | $ | 34,707 | $ | 34,767 | |||
| Service and other revenue | 3,371 | 3,093 | 6,339 | 6,173 | |||||||
| Total revenue | 24,621 | 21,578 | 41,046 | 40,940 | |||||||
| Cost of Revenue: | |||||||||||
| Cost of product revenue | 11,980 | 9,858 | 20,598 | 18,877 | |||||||
| Cost of service and other revenue | 3,028 | 2,858 | 5,718 | 5,905 | |||||||
| Total cost of revenue | 15,008 | 12,716 | 26,316 | 24,782 | |||||||
| Gross profit | 9,613 | 8,862 | 14,730 | 16,158 | |||||||
| Operating Expense: | |||||||||||
| Research and development | 14,910 | 15,664 | 30,395 | 31,975 | |||||||
| Sales, general and administrative | 19,083 | 14,943 | 38,849 | 29,877 | |||||||
| Total operating expense | 33,993 | 30,607 | 69,244 | 61,852 | |||||||
| Operating loss | (24,380) | (21,745) | (54,514) | (45,694) | |||||||
| Interest expense | (644) | (598) | (1,269) | (1,179) | |||||||
| Other income (expense), net | 428 | (197) | 863 | 154 | |||||||
| Net loss | $ | (24,596) | $ | (22,540) | $ | (54,920) | $ | (46,719) | |||
| Basic and diluted net loss per share | $ | (0.16) | $ | (0.17) | $ | (0.36) | $ | (0.37) | |||
| Shares used in computing basic and diluted net loss per share | 152,776 | 131,882 | 152,029 | 127,847 |
Pacific Biosciences of California, Inc.
Unaudited Condensed Consolidated Balance Sheets
(amounts in thousands)
| June 30, | December 31, | ||||
| 2019 | 2018 | ||||
| Assets | |||||
| Cash and investments | $ | 66,844 | $ | 102,354 | |
| Accounts receivable | 12,123 | 8,595 | |||
| Inventory | 17,404 | 17,878 | |||
| Prepaid and other current assets | 2,538 | 2,832 | |||
| Property and equipment, net | 33,457 | 34,073 | |||
| Operating lease right-of-use assets, net | 34,175 | ||||
| Long-term restricted cash | 4,000 | 4,500 | |||
| Other long-term assets | 41 | 43 | |||
| Total Assets | $ | 170,582 | $ | 170,275 | |
| Liabilities and Stockholders' Equity | |||||
| Accounts payable | $ | 8,011 | $ | 6,736 | |
| Accrued expenses | 14,107 | 12,823 | |||
| Deferred service revenue | 8,161 | 7,427 | |||
| Operating lease liabilities | 47,552 | ||||
| Notes payable | 15,233 | 14,659 | |||
| Deferred rent | 13,765 | ||||
| Other liabilities | 1,764 | 788 | |||
| Financing derivative | 16 | ||||
| Stockholders' equity | 75,754 | 114,061 | |||
| Total Liabilities and Stockholders' Equity | $ | 170,582 | $ | 170,275 |