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It hasn't been a great year so far for Pacific Biosciences of California (PACB 27.74%). Shares of the genetic-sequencing company have dropped more than 35% in 2016. Pacific Biosciences announced its third-quarter results after the market closed on Wednesday. Were those results good enough to help the company turn things around? Here are the highlights. 

Pacific Biosciences results: The raw numbers

 Metric

Q3 2016 Actuals

Q3 2015 Actuals

Growth (YOY)

Sales

$25.1 million

$13.9 million

80.6%

Net income (loss) 

($17.5 million)

$1.8 million

--

Net income (loss) per share

($0.19)

$0.02

--

Data source: Pacific Biosciences of California. YOY = year over year.

What happened this quarter?

Most of Pacific Biosciences' revenue growth stemmed from new product sales. These sales jumped to over $18 million in the third quarter from $7.57 million in the prior-year period. The company also saw solid growth in services and other revenue, up 26% year over year to $3.57 million.

Pacific Biosciences reported marked improvement in gross profit during the third quarter, a 50.3% increase over the prior-year period, primarily because of higher-margin sales of the Sequel sequencing system.

At first glance, it might appear as if the company's bottom line deteriorated considerably from last year. However, the third quarter of 2015 was helped tremendously by a one-time gain on lease amendments of $23.0 million. Excluding the impact of this gain, Pacific Biosciences' operating costs increased by less than 9% -- well below the company's revenue growth rate.

There were a couple of notable developments during the third quarter. One of Pacific Biosciences' customers, HistoGenetics, won a multi-year contract to perform HLA typing (analysis of genes in the human leukocyte antigen region of the human genome) using PacBio sequencing. Also, Dovetail Genomics added PacBio SMRT sequencing and assembly options to its services menu. Dovetail is an early-stage genomics company founded in 2013. 

What management had to say

Pacific Biosciences CEO Mike Hunkapiller said, "We are pleased with our third-quarter results and our continued progress in driving growth in our business." He added: "Last week, we began broad commercial release of new sample loading reagents and protocols that dramatically reduce by a factor of more than 50 the amount of high molecular weight DNA libraries required for optimal loading on the Sequel SMRT cells. ... We are extremely excited about this latest chemistry improvement."

Looking forward

Supplier issues plagued Pacific Biosciences earlier this year. Those problems are now resolved. That should bode well for the company's future sales of the Sequel sequencing systems.

While Pacific Biosciences reported cash and investments of $87.3 million as of the end of September, that won't be enough to carry the company for too long. Expect a move to raise more cash in the not-too-distant future.

The big question for Pacific Biosciences is whether an acquisition could be in the cards. Roche (RHHBY 0.80%) reportedly approached the company earlier this year about a potential deal. The healthcare giant has been a partner with Pacific Biosciences since 2013. Rumors come and go about Roche's interest, but there does appear to be a good fit between the companies.

Regardless of what happens on the acquisition front, Pacific Biosciences' relationship with Roche should bring good news relatively soon. Hunkapiller expects Roche to launch its Sequel-based product by early to mid-2017.