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Decode Genetics' Q4 Revenues Rise 21 Percent as Cash Dwindles

NEW YORK (GenomeWeb News) – Decode Genetics reported after the close of the market on Tuesday that its fourth-quarter 2008 revenues increased 21 percent and its net loss dropped sharply. But the firm only has enough liquid assets to fund operations into the second quarter of this year, and said that it is seeking additional funds through a variety of options.

The Reykjavik, Iceland-based genetic test and drug developer brought in revenues of $16.1 million for the three-month period ended Dec. 31, 2008, compared to revenues of $13.3 million for the fourth quarter of 2007.

Its net loss for the period dropped 44 percent to $18 million, or $.29 per share, from $32.4 million, or $.53 per share, as the company significantly cut its R&D costs. Decode spent $4.5 million on R&D during the quarter, down 64 percent from $12.5 million spent on R&D during the fourth quarter of 2007. Its SG&A spending declined 5 percent to $7.3 million from $7.7 million.

For full-year 2008, Decode's revenues rose 44 percent to $58.1 million from $40.4 million. Its net loss fell 16 percent to $80.9 million, or $1.32 per share, from $95.5 million, or $1.57 per share.

Decode spent $30.8 million on R&D during 2008, down sharply from $53.8 million in 2007, while its SG&A spending increased to $28.3 million from $27.1 million.

The firm finished the year with cash, cash equivalents, and current investments of $3.7 million, which it said was sufficient to fund operations only into its second quarter. Earlier this year, Decode sold its Auction Rate Securities for $11 million in cash, which it has been using to fund its operating activities.

"We need to obtain additional funds both to continue operations in the near term and to capture the longer term value of our products," Decode CEO Kari Stefansson said in a statement. "To address this need, the management team and the board have been focused on pursuing several alternatives that have emerged from the strategic review we began a few months back. We are presently engaged in negotiations on opportunities including the sale of business units and therapeutic programs; licensing agreements for certain of our diagnostics tests; entering large-scale genome sequencing collaborations; restructuring our debt; and obtaining new equity financing."

Decode had said in October that it had hired the Stanford Group Company to assist it in evaluating strategic alternatives and executing quickly on the results of the review by identifying buyers or partners for its non-core business units, programs, and intellectual property.

Decode's shares were recently transferred from the Nasdaq Global Market to the Nasdaq Capital Market following an earlier de-listing warning from the exchange. The firm said yesterday that its continued listing on the Nasdaq Capital Market "is contingent upon successful completion by April 29, 2009, of a review process and the evidencing of compliance with all the requirements for continued listing" on that market.

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