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Clinical Data's Fiscal Q4 Revenues Rise 5 Percent, Though Losses Swell 90 Percent

NEW YORK (GenomeWeb News) — Clinical Data late Tuesday reported that fiscal fourth-quarter revenues rose 5 percent and net losses jumped 90 percent year over year.
 
Total receipts for the three months ended March 31 increased to $15.9 million from $15.1 million in the fiscal fourth quarter of 2006.
 
Net loss swelled to $17 million from $9 million in the year-ago period. The company said the loss included a $2.6-million impairment charge related to “intangible assets at Icoria,” which Clinical Data acquired in 2005.
 
At the close of business on June 18, the company had around $17 million in cash and equivalents. The increase in cash since March 31, which were around $14 million, is primarily related to the receipt of a litigation settlement by its Vital Scientific subsidiary, and to proceeds received from the sale of its Clinical Data Sales & Service business. Approximately $3.3 million of the proceeds were used to retire a line of credit.
 
As GenomeWeb Daily News reported yesterday, Clinical Data said in the fourth-quarter earnings release that its independent auditors have a “material uncertainty” about the company’s “ability to continue as a going concern for a reasonable period of time.”

Clinical Data said it “continues to undertake steps to improve liquidity."

 
In an e-mail message to GenomeWeb Daily News today, CEO Drew Fromkin said the “going concern” statement “is based in good part on the potential cash needs over the next year tied to the development of our drug Vilazodone, which we have guided through a Phase III trial without having to dilute its value in order to fund its development, and related genetic markers.”
 
Fromkin added: “Should we receive positive data and continue toward [a new drug application] for Vilazodone, our funding needs would rise but we would also have created exponential value for our shareholders with this asset. 
 
“Our current cash position today is similar to that of last year at this time, we have shed unprofitable, debt-burdened, non-strategic assets, and we have made great strides in our strategic businesses,” he said.
 
Overall, Fromkin said, the company has “managed our cash tightly. ... This was accomplished after acquiring absorbing businesses that each had a history of producing significant losses.”
 
Investors were less optimistic, causing shares in Clinical Data to slide 4.5 percent since the company announced its earnings.

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