Pacific Biosciences of California (PACB) 8-K Second Quarter 2012 Financial Results

Exhibit 99.1

Pacific Biosciences of California, Inc. Announces

Second Quarter 2012 Financial Results

Menlo Park, Calif.– July 26, 2012 – Pacific Biosciences of California, Inc. (Nasdaq: PACB) today announced financial results for the second quarter ended June 30, 2012.

During the second quarter of 2012, the Company recognized revenue from installations of its PacBioRS systems, SMRT^® Cell and reagent consumables, instrument service contracts and grants. Revenue for the second quarter of 2012 totaled $7.3 million and net loss was $22.5 million.

Gross profit for the second quarter of 2012 totaled $0.3 million, resulting in a gross margin of 4%, compared to a $0.2 million gross loss for the first quarter of 2012 and a negative margin of 2%. Gross profit for the second quarter of 2011 was $7.9 million representing a gross margin of 74%. The margin for the second quarter 2011 reflects the positive margin impact of instrument components expensed during earlier periods when the Company was in the development stage.

Operating expenses comprised of research and development and selling, general and administrative expenses for the second quarter of 2012 totaled $22.8 million, representing a 17% decrease compared to $27.4 million for the first quarter of 2012. Operating expenses in the second quarter of 2012 include $2.5 million of non-cash stock-based compensation with $1.1 million and $1.4 million recorded in research and development and selling, general and administrative expenses, respectively. Operating expenses in the second quarter of 2011 were $30.6 million.

Research and development expense during the second quarter of 2012 totaled $11.3 million, representing a 7% decrease compared to $12.1 million for the first quarter of 2012. Selling, general and administrative expense during the second quarter of 2012 totaled $11.5 million, representing a 24% decrease compared to $15.3 million for the first quarter of 2012. The $3.8 million decrease in quarterly SG&A expense reflects a $3.2 million decrease in outside legal expense as we settled two intellectual property matters in the first quarter of 2012. During the second quarter of 2011, research and development expense totaled $19.5 million and selling, general and administrative expense totaled $11.0 million.

Cash and investments at June 30, 2012 totaled $137.1 million compared to $161.3 million at March 31, 2012.

The Company’s system revenue backlog was less than $1.0 million as of June 30, 2012, which represents an order for one PacBioRS instrument received during the second quarter of 2012. Installation has been completed for all instruments that were in backlog as of March 31, 2012.

Quarterly Conference Call Information

Management will host a quarterly conference call to discuss its second quarter 2012 results today at 4:30pm Eastern / 1:30pm Pacific. Investors may listen to the call by dialing 888.366.7247, or if outside the U.S., by dialing +1.707.287.9330. The call will be webcast live and will be available for replay at Pacific Biosciences’ website at http://investor.pacificbiosciences.com/.

About Pacific Biosciences

Pacific Biosciences of California, Inc. (NASDAQ: PACB) offers the PacBio^®RS High Resolution Genetic Analyzer to help scientists solve genetically complex problems. Based on its novel Single Molecule, Real-Time (SMRT^®) technology, the company’s products enable: targeted sequencing to more comprehensively characterize genetic variations;de novo genome assembly to more fully identify, annotate and decipher genomic structures; and DNA base modification identification to help characterize epigenetic regulation and DNA damage. By providing access to genetic information that was previously inaccessible, Pacific Biosciences enables scientists to increase their understanding of biological systems.

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

Pacific Biosciences of California, Inc.

Unaudited Consolidated Statement of Operations and Comprehensive Income

(amounts in thousands, except per share amounts)

	Quarters Ended
	June 30, 2012			March 31, 2012			June 30, 2011
Revenue:
Product revenue	$	5,827		$	8,715		$	10,148
Service and other revenue		1,284			1,053			192
Grant revenue		180			270			290
Total revenue		7,291			10,038			10,630
Cost of revenue:
Cost of product revenue		5,382			8,607			2,537
Cost of service and other revenue		1,634			1,583			194
Total cost of revenue		7,016			10,190			2,731
Gross profit (loss)		275			(152	)		7,899
Operating expense:
Research and development		11,272			12,073			19,546
Sales, general and administrative		11,558			15,285			11,016
Total operating expense		22,830			27,358			30,562
Operating loss		(22,555	)		(27,510	)		(22,663	)
Other income (expense), net		68			(70	)		188
Net loss	$	(22,487	)	$	(27,580	)	$	(22,475	)
Basic and diluted net loss per share	$	(0.40	)	$	(0.50	)	$	(0.42	)
Shares used in computing basic and diluted net loss per share		55,658			55,201			53,414
Comprehensive loss	$	(22,547	)	$	(27,502	)	$	(22,297	)

Pacific Biosciences of California, Inc.

Unaudited Consolidated Statement of Operations and Comprehensive Income

(amounts in thousands, except per share amounts)

	Year to Date
	June 30, 2012			June 30, 2011
Revenue:
Product revenue	$	14,542		$	10,148
Service and other revenue		2,337			192
Grant revenue		450			560
Total revenue		17,329			10,900
Cost of revenue:
Cost of product revenue		13,989			2,537
Cost of service and other revenue		3,217			194
Total cost of revenue		17,206			2,731
Gross profit		123			8,169
Operating expense:
Research and development		23,345			43,664
Sales, general and administrative		26,843			22,135
Total operating expense		50,188			65,799
Operating loss		(50,065	)		(57,630	)
Other income (expense), net		(2	)		346
Net loss	$	(50,067	)	$	(57,284	)
Basic and diluted net loss per share	$	(0.90	)	$	(1.08	)
Shares used in computing basic and diluted net loss per share		55,433			53,057
Comprehensive loss	$	(50,049	)	$	(57,082	)

Pacific Biosciences of California, Inc.

Consolidated Balance Sheets

(amounts in thousands, except per share amounts)

	June 30, 2012		March 31, 2012		December 31, 2011 (1)
	(unaudited)		(unaudited)
Assets
Cash and investments	$	137,108	$	161,349	$	177,434
Accounts receivable		3,371		1,505		4,557
Inventory		10,271		11,821		15,517
Prepaid and other current assets		1,893		2,131		2,093
Total current assets		152,643		176,806		199,601
Property and equipment		16,937		17,592		18,398
Other assets		350		340		317
Total Assets	$	169,930	$	194,738	$	218,316
Liabilities and Stockholders’ Equity
Accounts payable	$	4,061	$	4,250	$	4,742
Deferred revenue		4,170		3,920		4,236
Accrued and other current liabilities		6,695		11,626		10,398
Total current liabilities		14,926		19,796		19,376
Facility financing and other non-current liabilities		6,800		7,039		7,477
Stockholders’ equity		148,204		167,903		191,463
Total Liabilities and Stockholders’ Equity	$	169,930	$	194,738	$	218,316

Note 1: The condensed consolidated balance sheet at December 31, 2011 has been derived from the audited consolidated financial statements at that date included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.