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PBIO Reports Record Product/Service Sales for Fiscal Year 2014

By Grant Zeng, CFA


Products and services revenue was $1,350,150 for fiscal 2014, compared to $1,046,678 for fiscal 2013, an increase of 29%. Products and services revenue for 2014 was lower than our estimate of $1.58 million, due to 11.5% decrease in sales in 4Q14.

Sales of consumables were $167,380 for FY2014, compared to $157,676 for FY2013, an increase of almost 6%.

Grant revenue for fiscal year 2014 was $24,594 compared to $456,610 for the 2013 fiscal year.

Total revenue for fiscal 2014 was $1,374,744, compared to $1,503,288 for fiscal 2013, an 8.6% decrease. This decrease was primarily due to the loss of $432,016 in grant revenue in 2014, offset to a significant degree by the $303,472 increase in products and services revenue.

Operating loss for fiscal 2014 was $3,338,350, compared to a loss of $3,327,192 for 2013.

Loss per common share was $0.44 for 2014 and for 2013.

We are very pleased to see a record products and services sales for fiscal 2014. Products and services revenue increased 29% year over year.

Although total revenue was down for the year in 2014 due to the loss of $432,016 in grant revenue, PBIO (PBIO) was able to offset the lost margin through continuing increases in products and services revenue combined with strict control of operating costs.

We are especially impressed by the strong sales of consumables in fiscal 2014, which increased 6%. This is important for the long term revenue growth. Consumables are recurring revenue, which should increase when more and more instruments are installed. This revenue may account for a large portion of total revenue in the future.

As of December 31, 2014, PBIO held $473,948 in cash, compared to $98,216 in cash as of September 30, 2014.

We Expect Continued Revenue Growth in 2015 and Beyond

With a boosted balance sheet, PBIO is initiating expansion of marketing, sales, and operations capabilities in anticipation of continued strong sales growth in 2015.

PBIO has set a series of goals for 2015, which include:

· Achieve measureable progress in completing and implementing a sound roadmap toward financial self-sufficiency and future growth and prosperity.

· Increase products and services sales and/or total revenue over same quarter prior year.

· Complete the Barozyme HT48 commercialization plan Phase II (shipment of systems to evaluation sites) in Q2.

· Continue the Barozyme HT48 commercialization plan Phase III (initial sales of high throughput systems) with increasing numbers of systems sold quarter over quarter.

· Secure a strategic marketing and distribution partner for the Barozyme HT48 high throughput system and for the NMR and EPR PCT-based sample preparation systems.

· Make measurable progress on the possible spin-off of selected PCT applications into new, stand-alone businesses designed to generate a revenue stream and favorable visibility for PBI.

· Implement an expanded marketing campaign for the recently released, patent-pending micro-Pestle consumable.

· Continue to expand our sales and marketing capabilities and our reach into new countries, investigators, and fields-of-use.

Based on these efforts and the strong financial performance for 2014, as well as the two new products launch and continued marketing efforts by management, we estimate that revenue will continue to grow in 2015 and beyond.

Specifically, we model product sales will reach $3.6 million in fiscal 2015, an increase of 167% over $1.35 million product sales for fiscal 2014.

We think revenue ramp in 2015 will be driven by sales from both existing and new products (instruments and consumables), from the Company’s expanding distribution network, and from grants currently being reviewed.

In 4Q14, PBIO shipped three Barozyme HT48 systems to three laboratories for evaluation, which could lead to purchasing. The bench-top Barozyme HT48 is a first-in-class, high throughput PCT-based instrument. It is capable of processing up to 48 samples simultaneously using the Company's new and proprietary BaroFlex 8-well processing strips. We expect significant sales growth from the HT48 system in 2015.

PBIO Announces the Release of PCT-HD, "The Next Generation Protein Preparation System"

On March 12, 2015, PBIO announced the commercial release of the PCT-HD system. The Company highlighted PCT-HD at the annual meeting of the US Human Proteomic Organization (US HUPO), being held March 15-18 in Tempe, Arizona.

Key advantages of the PCT-HD System in the application of biomarker discovery were discussed in two separate presentations during the conference.

The PCT-HD System combines two of the Company's unique products: the recently released, patent-pending micro-Pestle consumable with an enhanced Barocycler NEP2320 instrument. This combination enables faster, less cumbersome and higher quality homogenization, extraction, and digestion of proteins.

The introduction of the PCT-HD System to the worldwide proteomics market marks an important milestone for PBIO. In addition to the key advantages of greater speed, easier handling, and increased quality, the PCT-HD System also offers a level of flexibility that will greatly support its adoption and growth across multiple markets, therefore boosting PBIO’s top line growth in the coming years.

First Purchase Order Received For Barozyme HT48 System

On February 10, 2015, PBIO announced the receipt of the first purchase order for its new Barozyme HT48 High-throughput System. The Company also announced the receipt of a request for a quotation for the possible purchase of a second Barozyme HT48 System from an existing European customer.

In September 2014, PBIO announced plans to build and ship nine Barozyme HT48 High-throughput Systems for independent evaluation. In November and December 2014, the Company installed the first three evaluation systems in three labs. They are the laboratory of Dr. William E. Funk of the Feinberg School of Medicine at Northwestern University, the laboratory of Dr. Radoslav Goldman of Georgetown University, and the laboratory of a leading biotechnology company.

PBIO officially launched its much anticipated High Throughput PCT-based Barozyme HT48 for the enhanced preparation of proteins for mass spectrometry analysis at the American Society for Mass Spectrometry (ASMS) Annual Conference on Mass Spectrometry and Allied Topics held June 15-19, 2014 in Baltimore, Maryland.

The purchase order for the Barozyme HT48 System came from the leading U.S. biotechnology company. This Company already owns and routinely uses two NEP2320 Barocycler instruments.

PBIO plans to install three more evaluation systems in the coming weeks: one at an academic research facility in MA, one at a cancer research company in CA, and one in a well-known, non-profit research center in Sweden.

According to management, due to the rapid success of the evaluation program, PBIO has decided to end the program early, after six installations and not after the planned nine. This will allow the upgrade of the last three systems with improvements dictated by the evaluation data generated thus far, and to have them ready for sale in the 2015 second quarter.

We believe the Barozyme HT48 System is now ready for a focused marketing and sales effort.


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