Pacific Biosciences of California, Inc. Announces Financial Results for the Fourth Quarter and Year Ended December 31, 2011

MENLO PARK, Calif., Feb. 7, 2012 (GLOBE NEWSWIRE) — Pacific Biosciences of California, Inc. (Nasdaq:PACB) today announced financial results for the fourth quarter and the year ended December 31, 2011.

During the fourth quarter of 2011, the Company recognized revenue from deliveries of its third generation sequencing platform, the PacBio^® RS, SMRT^® Cell and reagent consumables, as well as revenue derived from instrument service contracts and grants, totaling $12.4 million, compared to revenue recognized of $10.5 million for the third quarter of 2011. Net loss for the quarter decreased to $22.8 million compared to the $29.3 million net loss recognized during the third quarter of 2011, which included workforce reduction charges of $4.9 million.

Gross profit for the fourth quarter totaled $1.5 million, resulting in a gross margin of 12%, compared to gross profit for the third quarter 2011 of $3.3 million and a gross margin of 32%. Gross margin for both the fourth and third quarters reflect the margin positive impact of significant instrument component costs that were expensed during prior periods. During development, costs relating to instrument components and manufacturing costs were expensed until commercial production started.

Operating expenses comprised of research and development and selling, general and administrative expenses for the fourth quarter of 2011 totaled $24.2 million, representing a 26% decrease compared to $32.8 million for the third quarter. Third quarter operating expenses included a $4.9 million of workforce reduction expense, of which $3.5 million and $1.4 million were recorded in research and development and selling, general and administrative expenses, respectively.

Research and development expense during the fourth quarter of 2011 totaled $12.4 million, representing a 38% decrease compared to $20.0 million for the third quarter. The reported expense includes non-cash stock-based compensation totaling $1.7 million and $1.6 million for the fourth and third quarters of 2011, respectively.

Selling, general and administrative expense during the fourth quarter of 2011 totaled $11.8 million, representing a 7% decrease compared to $12.8 million for the third quarter. The reported expense includes non-cash stock-based compensation totaling $1.6 million and $1.4 million for the fourth and third quarters of 2011, respectively.

Cash and investments at December 31, 2011 totaled $177.4 million compared to $193.7 million at September 30, 2011.

Fiscal Year 2011 Financial Highlights:

For the year ended December 31, 2011, the Company’s reported annual revenue of $33.9 million was derived primarily from the delivery of 48 PacBio RS instruments and related consumable products and product services. Net loss for 2011 decreased 22% to $109.4 million, compared to a net loss of $140.2 million for 2010. The decrease in net loss is largely attributable to increased revenue recognized during 2011.

Research and development expenses during fiscal 2011 totaled $76.1 million, compared to $111.8 million for fiscal 2010. Research and development expenses for periods prior to the fourth quarter of 2010 include all costs associated with manufacturing operations. Selling, general and administrative expenses during fiscal 2011 increased to $46.7 million from $30.1 million for fiscal 2010, reflecting the continued growth of the Company’s sales and customer support organizations due to the commercial launch of the PacBio RS in 2011.

The Company’s system revenue backlog totaled approximately $11.0 million as of December 31, 2011, which represents orders for 16 PacBio RS instruments received as of that date. The backlog of 16 instruments reflects the 27 instruments in backlog as of September 30, 2011, 17 deliveries and six bookings during the fourth quarter.

Quarterly Conference Call Information

Management will host a quarterly conference call to discuss its Fourth Quarter 2011 results today at 3:00pm Eastern / 12:00pm Pacific. Investors may listen to the call by dialing 866.700.0161, or if outside the U.S., by dialing +1.617.213.8832, and entering passcode 391.807.81. The call will be webcast live and will be available for replay at Pacific Biosciences’ website at http://investor.pacificbiosciences.com/.

Forward-Looking Statements

This press release contains forward-looking statements relating to the Company’s operations and operating results, including statements relating to the Company’s revenue. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company’s control and that could materially affect actual results. Factors that could materially affect actual results can be found in Pacific Biosciences of California’s filings with the Securities and Exchange Commission, including the most recently filed Quarterly Report on Form 10-Q, including those listed under the caption “Risk Factors.” Pacific Biosciences of California expressly disclaims any intent or
obligation to update these forward-looking statements, except as required by law. 

CONTACT: Trevin Rard

         650.521.8450

         ir@pacificbiosciences.com

Source: Pacific Biosciences of California, Inc.

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