Shares of the company plummeted in the wake of the news, falling $.99, or 24 percent, to $3.20 in mid-day trading.
For the quarter ended March 31, Gene Logic's total revenue fell to $12.8 million from $19.7 million in the first quarter of 2005. Revenues fell across all three of the firm's operating divisions: Genomics Division revenue declined to $8.7 million from 13.2 million in the prior-year period; Preclinical revenue fell to $4 million from $6.4 million in the prior-year period; and Drug Repositioning revenue dropped to $20,000 from $67,000 in the same period of 2005.
Gene Logic said in a statement that the Genomics Division has been "transitioning" over the past five quarters from a model based on database subscriptions and a few large customers to one with multiple sources of revenue --- including revenues "from perpetual licenses and microarray data generation and analysis services" --- and a broader customer base. The company added that the division's results are likely to be "variable," however, "when certain opportunities fail to materialize or are deferred."
The results for the Genomics Division in the first quarter reflect "lower sales due to the non-signing of a previously anticipated perpetual license and the deferral of several opportunities until later in the year," the company said.
Gene Logic's net losses ballooned to $11.8 million, nearly three times the company's net loss of $4.1 million in the first quarter of 2005. The company attributed the widening losses to the revenue shortfall in the Genomics Division.
R&D spending increased to $2.4 million from $1.5 million in the first quarter of 2005.
Gene Logic had $28.4 million in cash and cash equivalents as of March 31, and $63.9 million in cash, cash equivalents, and marketable securities available for sale.