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CombiMatrix Reports Meager Q1 Revenue Growth as CMD Group Drives R&D Spend; Losses More Than Double

NEW YORK, April 21 (GenomeWeb News) - CombiMatrix yesterday said that first-quarter revenue inched up 2 percent as R&D spending and net losses more than doubled.

 

Total receipts for the three months ended March 31 increased to $1.2 million from $1 million in the year-ago period.

 

Year over year, revenue from government contracts fell to $264,000 from $731,000; receipts from product sales surged to $924,000 from $278,000; while revenue from service contracts contracted by $30,000 to $57,000, Combi said.

 

The decrease in government contracts was due to completion of the company's "commitments under its previous $5.9 million biological threat detection contract with the Department of Defense in December 2005. A new $2.1 million contract to further the development of its biological and chemical detector system was executed in February of 2006, resulting in lower contract costs in the first quarter of 2006 than in the comparable 2005 period," Combi said in a statement.

 

"Our product and service revenue is increasing nicely, and this trend should continue as our products continue to gain acceptance with our customers," Combi President Amit Kumar said in the statement. "Additionally, the launch of products from our diagnostics division, earlier than originally planned, will augment our revenue growth.

 

"Our defense contracting revenue for the quarter was modest due to an unforeseen delay in initiation of our new government contract," Kumar said. "We expect this revenue to increase in the following quarters."

 

R&D spending in the period increased to $2.4 million from $1.1 million year over year. This increase was due "primarily" to developments ongoing at the CombiMatrix Molecular Diagnostics division.

 

The company said net losses increased to $7.7 million from $3 million in the year-ago period. The current quarter's loss included non-cash stock compensation, patent amortization and depreciation charges totaling $1.2 million versus $427,000 in the comparable 2005 period.

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