UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 23, 2014
Pacific Biosciences of California, Inc.
(Exact name of registrant as specified in its charter)
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Delaware |
001-34899 |
16-1590339 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1380 Willow Road
Menlo Park, California 94025
(Address of principal executive offices, including zip code)
(650) 521-8000
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02.Results of Operations and Financial Condition.
This current report on Form 8-K contains forward-looking statements that involve risks and uncertainties. Forward-looking statements are based on management’s beliefs and assumptions and on information currently available to them. The Company’s actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us and described in the Company’s most recently filed Quarterly Report on Form 10-Q, Annual Report on Form 10-K, or the Company’s other filings with the SEC, as the case may be. You should not place undue reliance on forward-looking statements, which apply only as of the date of this Current Report on Form 8-K. The Company assumes no obligation to update these forward-looking statements.
On October 23, 2014, Pacific Biosciences of California, Inc. (the “Company”) reported its financial results for the quarter ended September 30, 2014. The Company’s unaudited Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss and Condensed Consolidated Statements of Cash Flows are included as Exhibits 99.1, 99.2 and 99.3 hereto, respectively, and are incorporated herein by reference.
Revenue for the third quarter of 2014 totaled $20.6 million, compared to $7.4 million for the third quarter of 2013. Third quarter 2014 revenue reflects the delivery of six PacBio RS II systems, same as in the third quarter of 2013. Total revenue for the third quarter of 2014 also included $10.0 million from the achievement of a milestone pursuant to the Roche agreement. The Company expects 2014 total revenue to be at least $58 million.
As of September 30, 2014, the Company’s instrument backlog was comprised of 20 instruments.
Compared to the third quarter of 2013, gross profit increased $12.0 million to $13.2 million for the third quarter of 2014. The increase in gross profit from 2013 to 2014 primarily reflects an increase in Roche contractual revenue. Gross margin for the third quarter of 2014 was 63.8% compared to 16.7% for the same period during 2013. Gross margin increased primarily due to an increase in contractual revenue. Gross margin is expected to remain variable depending on the revenue mix; however in the short-term, the Company expects gross margin to decrease due to a higher mix of instrument revenue and the non-recurring nature of the milestone revenue recognized during the third quarter of 2014.
Operating expenses totaled $21.6 million for the quarter ended September 30, 2014 compared to $21.2 million for the quarter ended September 30, 2013. Operating expenses for the third quarter of 2014 and 2013 included non-cash stock-based compensation of $2.2 million and $2.1 million, respectively. The Company anticipates quarterly operating expenses to remain near current levels for the remainder of 2014.
The net loss for the quarter was $9.2 million, compared to $20.5 million for the third quarter of 2013.
Cash and investments at September 30, 2014 totaled $99.3 million, compared to $112.5 million at December 31, 2013. During the nine-month period ended September 30, 2014, the Company received $20.8 million through the sale of common stock under its current “at-the-market” offering program. Excluding proceeds from the “at-the-market” offering, cash and investments decreased by $34.0 million compared to December 31, 2013, primarily reflecting $36.1 million of cash used in operating activities and $1.1 million of fixed asset purchases partially offset by $3.3 million of proceeds received from equity sales through the Company’s employee equity plans.
The information set forth in this Item 2.02, as well as Exhibit 99.1, 99.2 and 99.3 referenced therein, shall be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended, and shall be incorporated by reference into the Company’s filings under the Securities Act of 1933, as amended.
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ITEM 9.01. |
FINANCIAL STATEMENTS AND EXHIBITS. |
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(d) |
Exhibits. |
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99.1 |
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Condensed Consolidated Balance Sheets (unaudited) |
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99.2 |
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Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) |
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99.3 |
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Condensed Consolidated Statements of Cash Flows (unaudited) |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Pacific Biosciences of California, Inc. |
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By: |
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/s/ Brian B. Dow |
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Brian B. Dow Vice President and Principal Accounting Officer |
Date: October 23, 2014
EXHIBIT INDEX
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Exhibit No. |
Description |
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99.1 |
Condensed Consolidated Balance Sheets (unaudited) |
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99.2 |
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) |
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99.3 |
Condensed Consolidated Statements of Cash Flows (unaudited) |
PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
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September 30, |
December 31, |
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(in thousands except par value amounts) |
2014 |
2013 |
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Assets |
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Current assets |
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Cash and cash equivalents |
$ |
35,411 |
$ |
26,362 | |
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Investments |
63,901 | 86,166 | |||
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Accounts receivable |
2,370 | 2,746 | |||
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Inventory, net |
11,398 | 10,050 | |||
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Prepaid expenses and other current assets |
1,057 | 1,135 | |||
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Total current assets |
114,137 | 126,459 | |||
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Property and equipment, net |
7,034 | 9,236 | |||
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Other long-term assets |
471 | 490 | |||
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Total assets |
$ |
121,642 |
$ |
136,185 | |
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable |
$ |
5,845 |
$ |
1,717 | |
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Accrued expenses |
8,726 | 7,905 | |||
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Deferred service revenue, current |
5,307 | 4,046 | |||
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Deferred contractual revenue, current |
6,785 | 6,785 | |||
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Other liabilities, current |
2,477 | 2,102 | |||
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Total current liabilities |
29,140 | 22,555 | |||
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Deferred service revenue, non-current |
918 | 518 | |||
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Deferred contractual revenue, non-current |
21,431 | 26,519 | |||
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Other liabilities, non-current |
2,505 | 3,517 | |||
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Notes payable |
13,914 | 13,347 | |||
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Financing derivative |
699 | 549 | |||
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Total liabilities |
68,607 | 67,005 | |||
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Commitments and contingencies |
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Stockholders’ equity |
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Preferred Stock, $0.001 par value: |
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Authorized 50,000 shares; No shares issued or outstanding |
— |
— |
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Common Stock, $0.001 par value: |
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Authorized 1,000,000 shares; Issued and outstanding 70,976 shares at September 30, 2014 and 66,275 shares at December 31, 2013, respectively |
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71 |
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66 |
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Additional paid-in capital |
715,439 | 684,413 | |||
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Accumulated other comprehensive income |
23 | 14 | |||
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Accumulated deficit |
(662,498) | (615,313) | |||
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Total stockholders’ equity |
53,035 | 69,180 | |||
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Total liabilities and stockholders’ equity |
$ |
121,642 |
$ |
136,185 | |
Exhibit 99.2
PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
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Three-Month Periods Ended |
Nine-Month Periods Ended |
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September 30, |
September 30, |
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(in thousands, except per share amounts) |
2014 |
2013 |
2014 |
2013 |
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Revenue: |
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Product revenue |
$ |
6,762 |
$ |
5,814 |
$ |
22,376 |
$ |
14,248 | ||||
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Service and other revenue |
2,165 | 1,607 | 6,226 | 4,800 | ||||||||
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Contractual revenue |
11,696 |
— |
15,088 |
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Total revenue |
20,623 | 7,421 | 43,690 | 19,048 | ||||||||
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Cost of Revenue: |
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Cost of product revenue |
5,608 | 4,616 | 19,048 | 11,138 | ||||||||
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Cost of service and other revenue |
1,853 | 1,564 | 5,678 | 4,680 | ||||||||
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Total cost of revenue |
7,461 | 6,180 | 24,726 | 15,818 | ||||||||
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Gross profit |
13,162 | 1,241 | 18,964 | 3,230 | ||||||||
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Operating Expense: |
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Research and development |
11,693 | 10,419 | 35,899 | 34,084 | ||||||||
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Sales, general and administrative |
9,882 | 10,757 | 28,025 | 29,685 | ||||||||
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Total operating expense |
21,575 | 21,176 | 63,924 | 63,769 | ||||||||
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Operating loss |
(8,413) | (19,935) | (44,960) | (60,539) | ||||||||
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Interest expense |
(716) | (686) | (2,103) | (1,785) | ||||||||
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Other income (expense), net |
(34) | 134 | (122) | 262 | ||||||||
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Net loss |
(9,163) | (20,487) | (47,185) | (62,062) | ||||||||
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Other comprehensive income (loss): |
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Unrealized gain (loss) on investments |
(19) | 13 | 9 | (19) | ||||||||
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Comprehensive loss |
$ |
(9,182) |
$ |
(20,474) |
$ |
(47,176) |
$ |
(62,081) | ||||
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Net loss per share: |
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Basic and diluted net loss per share |
$ |
(0.13) |
$ |
(0.31) |
$ |
(0.68) |
$ |
(1.01) | ||||
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Shares used in computing basic and diluted net loss per share |
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70,740 |
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65,523 |
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69,716 |
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61,636 |
Exhibit 99.3
PACIFIC BIOSCIENCES OF CALIFORNIA, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Nine-Month Periods Ended September 30, |
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(in thousands) |
2014 |
2013 |
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Cash flows from operating activities |
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Net loss |
$ |
(47,185) |
$ |
(62,062) | |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Depreciation |
3,311 | 4,238 | |||
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Amortization of debt discount and financing costs |
579 | 418 | |||
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Stock-based compensation |
6,944 | 7,361 | |||
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Other |
242 | (73) | |||
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Changes in assets and liabilities |
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Accounts receivable |
376 | (992) | |||
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Inventory |
(1,348) | 171 | |||
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Prepaid expenses and other assets |
85 | 791 | |||
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Accounts payable |
4,128 | 425 | |||
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Accrued expenses |
821 | 544 | |||
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Deferred service revenue |
1,661 | 56 | |||
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Deferred contractual revenue |
(5,088) | 35,000 | |||
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Other liabilities |
(637) | (1,136) | |||
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Net cash used in operating activities |
(36,111) | (15,259) | |||
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Cash flows from investing activities |
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Purchase of property and equipment |
(1,132) | (807) | |||
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Purchase of investments |
(97,468) | (141,549) | |||
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Maturities of investments |
119,673 | 133,391 | |||
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Net cash provided by (used in) investing activities |
21,073 | (8,965) | |||
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Cash flows from financing activities |
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Proceeds from issuance of common stock from equity plans |
3,319 | 2,731 | |||
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Proceeds from issuance of common stock from at-the-market equity offering, net of issuance costs |
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20,768 |
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19,954 |
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Proceeds from issuance of Facility Agreement, net of issuance costs |
— |
19,766 | |||
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Net cash provided by financing activities |
24,087 | 42,451 | |||
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Net increase in cash and cash equivalents |
9,049 | 18,227 | |||
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Cash and cash equivalents at beginning of period |
26,362 | 46,540 | |||
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Cash and cash equivalents at end of period |
$ |
35,411 |
$ |
64,767 | |