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Epoch Biosciences Posts Shrinking Q4 Revenues Amid Reduced R&D Spending

NEW YORK, Feb. 26 (GenomeWeb News) - Epoch Biosciences today reported a drop-off in fourth-quarter revenue atop miniscule R&D spending and a newly posted net loss.


Total receipts for the three months ended Dec. 31 fell to $2 million from $3.8 million one year ago. The decrease was across the board in the fourth quarter, as revenues from product sales, license fees and royalties, and contract research slumped by $845,000, $678,000, and $250,000, respectively.


Epoch blamed the decrease on the elimination of sales from the its San Diegooperation in 2003, and to "significantly lower" shipments of the MGB Eclipse Probe Systems due to an "initial inventory build" by Amersham. However, Epoch said this was "partially offset" by increased direct sales to end users of the MGB Eclipse by Design product.

The company blamed the decrease in royalties to "the unusually high royalties from Applied Biosystems in 2002," which were partially offset by higher royalties from other partners in 2003.


Fourth-quarter R&D spending, meantime, shrank to $826,000 from $1.4 million year over year, largely due to staff cuts, Epoch said.


Epoch also posted a net loss of $427,000, or $.02 per share, from a net profit of $64,000, or $.00 per share, in the year-ago period.


The company also said it terminated a license agreement related to MGB technology after the USpatent office "reexamined ... the relevant patent" and narrowed its claims to the point where they no longer apply to "current or future" Epoch products.


The patent office move cost the company $425,000 in a non-cash charge in the fourth quarter, which represented the remaining book value of the consideration originally paid for the license, Epoch stressed.


Epoch CFO Bert Hogue called this patent a "defensive measure," and stressed in an interview with GenomeWeb News that it has "no impact on [Epoch's] customers."


Epoch said it had around $4.4 million in cash and equivalents as of Dec. 31.


Click here to read the complete earnings report.

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