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MENLO PARK, CA – Pacific Biosciences of California, Inc. (NASDAQ:PACB), a leader in laboratory analytical instruments with a market capitalization of $357.59 million, has entered into a significant lease amendment extending their headquarters and facilities lease until April 30, 2034. According to InvestingPro data, the company has seen its stock decline nearly 70% over the past year, though it maintains strong liquidity with a current ratio of 12.69. The agreement, effective from March 7, 2025, with Menlo Park Portfolio II, LLC, includes a rent abatement and tenant improvement allowance.
The extended lease for the Menlo Park-based company’s corporate headquarters, research, and development, as well as manufacturing and distribution centers, will see an increment in base rent starting November 1, 2027, with an initial monthly base rent of $1,027,316.70. This amount will gradually increase each year, reaching $1,226,669.86 by the end of the term on April 30, 2034.
Additionally, Pacific Biosciences will benefit from a 17-month base rent abatement totaling approximately $11.6 million. Alongside this financial relief, the company will also receive a tenant improvement allowance of over $7.2 million, which is designated for facility improvements to be conducted by the lessor. This financial arrangement comes at a crucial time, as InvestingPro analysis indicates the company is quickly burning through cash, with an EBITDA of -$248.68 million in the last twelve months. These improvements are to be completed by the end of 2027.
The company retains the option to further extend the lease through April 30, 2044, at a rent determined by the prevailing market rates at that time. Except for the provisions mentioned, all other terms of the original lease agreement remain unchanged.
This lease amendment reflects Pacific Biosciences’ commitment to its long-term presence in Menlo Park and provides financial advantages that could support the company’s operations and strategic growth. With annual revenue of $154.01 million and trading near its 52-week low, investors seeking deeper insights can access comprehensive analysis through InvestingPro’s detailed research reports, which provide expert analysis on over 1,400 US stocks. The details of the agreement will be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2024, to be filed with the Securities and Exchange Commission.
This news is based on a recent press release statement and provides investors with updated information on Pacific Biosciences’ financial commitments and infrastructure plans.
In other recent news, Pacific Biosciences of California, Inc. (PacBio) reported a 33% year-over-year decline in quarterly revenue, totaling $39.2 million, and a 23% decrease in annual revenue to $154 million for 2024. Despite these financial setbacks, the company launched new products, including the Vega sequencing system and SPRQ chemistry for the Revio system, aimed at expanding their market reach. PacBio has begun shipping the Vega systems to Berry Genomics under an early access agreement, which is expected to enhance genetic screening programs in China. This agreement includes a commitment from Berry Genomics to purchase over 50 Vega units.
The company has also restructured its financial position by exchanging $459 million in convertible senior notes due in 2028 for new notes and shares, and it anticipates ending the year with approximately $390 million in cash and investments. Additionally, PacBio has updated the severance agreements for its top executives, offering lump sum payments in case of a change in control. These agreements now cover a broader time frame surrounding potential corporate changes. The company plans to discuss these developments in more detail during the upcoming J.P. Morgan Healthcare Conference.
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