Sequenom Reports Second Quarter 2006 Financial Results4 August 2006
Sequenom, Inc. (Nasdaq: SQNM) today reported financial results for the three and six months ended June 30, 2006.
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Revenues for the second quarter of 2006 were $7.1 million, up 15% compared with revenues of $6.2 million for the second quarter of 2005. The Company reported a net loss for the second quarter of 2006 of $4.0 million, or $0.21 per share, compared with a net loss of $6.1 million, or $0.46 per share, for the second quarter of 2005.
Cost of product and service revenue for the second quarter of 2006 was $3.0 million, compared with $3.2 million for the second quarter of 2005. Research and development expenses decreased 20% to $2.4 million, compared with $3.0 million for the same period last year. Selling and marketing expenses decreased 21% to $2.5 million, compared with $3.1 million for the second quarter of 2005. General and administrative expenses increased 7% to $3.0 million, compared with $2.8 million for the same period last year. Total costs and expenses for the second quarter of 2006 decreased 10% to $11.4 million, compared with $12.6 million for the second quarter of 2005. Total costs and expenses for the quarters ended June 30, 2006 and 2005 include $0.3 million and $0.1 million, respectively, of share-based compensation expenses.
Revenues for the six months ended June 30, 2006 were $14.0 million, a 34% increase compared with revenues of $10.5 million for the same period last year. Total costs and expenses for the first six months of 2006 decreased 10% to $22.4 million, compared with $24.8 million for the same period last year. Total costs and expenses for the six months ended June 30, 2006 and 2005 include $0.5 million and $0.3 million, respectively, of share-based compensation expenses. Sequenom reported a net loss for the six months ended June 30, 2006 of $7.7 million, or $0.48 per share, compared with a net loss of $13.4 million, or $1.01 per share, for the same period in 2005.
As of June 30, 2006, Sequenom had available cash and cash equivalents totaling $31.2 million, reflecting net proceeds of approximately $30.0 million from a private placement of common stock and warrants completed in June 2006. The Company reported available cash and short-term investments of $6.0 million as of December 31, 2005. As of June 30, 2006, the Company reported stockholders' equity of $34.6 million.
"I am encouraged by the continued improvement in our financial results," said Harry Stylli, Ph.D., President and Chief Executive Officer. "The increased demand created by our new product initiatives is now translating into revenue growth. This growth, coupled with our success in reducing our operating expenses while continuing to invest in near- and longer-term research and development projects, provides us with a solid foundation on which we can deliver increased value to our customers and shareholders.
"We are affirming our financial guidance for 2006. We expect to report revenues of at least $24 million in 2006, representing at least 25% growth compared with 2005. We anticipate that combined research and development, sales and marketing, and general and administrative expenses will be consistent with 2005 at approximately $34 million," Dr. Stylli added.
Second Quarter and Recent Highlights
* Hired Key Research and Development Executive: In May, we hired Betty
Dragon, Ph.D. as senior vice president of research and development. Dr.
Dragon has more than 25 years of diagnostics R&D, management, and
leadership experience, including significant achievements in product
development and commercialization planning and execution during 16
years at Roche Molecular Systems.
* Completed $33 Million Private Placement: In June, we completed a
$33 million private placement of common stock and warrants to purchase
common stock with ComVest Investment Partners II LLC, Pequot Private
Equity Fund IV, L.P., LB I Group, Inc. (an affiliate of Lehman
Brothers) and Siemens Venture Capital GmbH.
* Granted Continued Listing on NASDAQ. In June, the Listing
Qualifications Panel of The Nasdaq Stock Market provided notification
that Sequenom complied with the minimum bid price requirement for
continued listing on The Nasdaq National Market (now named The Nasdaq
Global Market) and recognized our compliance with Nasdaq's
shareholders' minimum equity requirement based on net proceeds from our
recently announced private placement. Accordingly, the Panel granted us
an exception until August 15, 2006 to review our Form 10-Q filing with
the Securities and Exchange Commission for the quarter ended June 30,
2006, to confirm our stockholders' equity in excess of $10 million.
* Selected Tata Consultancy Services (TCS) to Develop Next Generation
Framework for Software Applications: In July, we announced we had
engaged TCS to develop software solutions that allow us to rapidly
develop and deploy software products aimed at more effectively
empowering our customers to discover, analyze and report genetic
information.
* Purchase of MassARRAY(R) system by City of Hope National Medical
Center: Also in July, we announced that City of Hope National Medical
Center will use our platform for quantitative gene expression and
methylation (epigenetic) studies. City of Hope also will use our high
throughput genotyping application as an integral part of its ongoing
research both to identify individuals at high risk for developing
cancer, and to aid in the development of therapeutic modalities based
on the unique genetic profile of a given patient.
Conference Call
Sequenom's management will host an investment-community conference call today beginning at 1:00 p.m. Eastern time (10:00 a.m. Pacific time) to discuss financial results, provide a business update and answer questions.
Individuals interested in participating in the conference call may do so by dialing (866) 844-2998 for domestic callers, or (706) 643-9669 for international callers. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (800) 642-1687 for domestic callers, or (706) 645-9291 for international callers, and entering reservation code 3769563.
The live call also will be available via the Internet on the company's Web site at http://www.sequenom.com. A webcast replay of the call will be available for 30 days following the conclusion of the call.
About Sequenom
Sequenom is committed to providing the best genetic analysis products that translate genomic science into superior solutions for non-invasive prenatal testing, biomedical research, molecular medicine and agricultural applications. The Company's proprietary MassARRAY(R) system is a high- performance DNA analysis platform that efficiently and precisely measures the amount of genetic target material and variations therein. The system is able to deliver reliable and specific data from complex biological samples and from genetic target material that is only available in trace amounts. The Company has exclusively licensed intellectual property rights for the development and commercialization of non-invasive prenatal genetic tests for use with the MassARRAY system and other platforms.
Sequenom(R) and MassARRAY(R) are trademarks of SEQUENOM, Inc.
Except for the historical information contained herein, the matters set forth in this press release, including statements regarding the Company's ability to deliver increased value to its customers and shareholders, the Company's financial guidance for 2006 including expected revenues and anticipated expenses for 2006, and use of the MassARRAY system by City of Hope, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the risks and uncertainties associated with the Company's technologies, market acceptance of and demand for the Company's products, reliance upon the collaborative efforts of others, product development and commercialization, and other risks detailed from time to time in the Company's SEC reports, including the Company's Annual Report on Form 10-K for the year ended December 31, 2005 and subsequent current and periodic reports as well as its proxy statement for the 2006 annual meeting of stockholders. These forward-looking statements are based on current information that is likely to change and speak only as of the date hereof. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and Sequenom undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the issuance of this press release.
SEQUENOM, Inc.
Condensed Consolidated Financial Statements
(in thousands, except per share data)
Consolidated Summary of Operations
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
(Unaudited) (Unaudited)
Revenues:
Consumables $3,094 $2,617 $5,949 $5,398
Other product related 3,809 3,424 7,474 4,733
Services 190 -- 204 --
Research and other 16 134 393 325
Total revenues 7,109 6,175 14,020 10,456
Costs and expenses:
Cost of product & service revenue 3,028 3,156 5,748 5,772
Research and development
expenses 2,426 3,024 4,891 6,317
Selling and marketing expenses 2,461 3,119 5,104 5,704
General and administrative
expenses 2,983 2,798 5,641 6,207
Restructuring charge -- -- 4 (212)
Amortization of acquired
intangibles 504 504 1,007 1,007
Total costs and expenses 11,402 12,601 22,395 24,795
Operating loss (4,293) (6,426) (8,375) (14,339)
Net interest income 74 83 121 178
Other income, net 23 48 107 251
Loss before income taxes (4,196) (6,295) (8,147) (13,910)
Deferred income tax benefit 232 232 464 465
Net loss $(3,964) $(6,063) $(7,683) $(13,445)
Net loss per share, basic and
diluted: $(0.21) $(0.46) $(0.48) $(1.01)
Weighted average of shares
outstanding, basic and diluted 18,851 13,257 16,163 13,253
Consolidated Balance Sheet Information
June 30, December 31,
2006 2005
(Unaudited) (Audited)
Assets:
Cash, cash equivalents, short-term
investments and restricted cash $32,613 $8,678
Property, equipment and leasehold
improvements, net 4,631 5,621
Other assets, including
intangibles 9,285 10,137
Total assets $46,529 $24,436
Liabilities and Stockholders' Equity:
Deferred revenue 1,648 1,501
Other liabilities 10,294 11,192
Stockholders' equity 34,587 11,743
Total liabilities and
stockholders' equity $46,529 $24,436
Source: prnewswire
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