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Helicos Expects Between Five and 10 Orders for HeliScope by End of Year

NEW YORK (GenomeWeb News) – Helicos BioSciences President and CEO Steve Lombardi said today that the firm expects to have a total of between five and 10 orders placed for its flagship HeliScope single-molecule sequencing instrument by the end of this year.
 
Lombardi told investors at the UBS Global Life Sciences Conference here that the firm also anticipates a total of 15 to 30 orders for its Genetic Analysis System, which includes the HeliScope, by mid-2009. He said Helicos currently has 13 HeliScopes in various stages of assembly and testing at its factory, and he noted that eight of the machines are at a point in the production process that they can run customer samples.
 
The company has received two orders thus far for its system. In February, Expression Analysis became the first commercial customer of the system. And in August, the firm announced that it had received a second order from an unnamed US cancer center. Lombardi said that Helicos expects to ship that second order on Oct. 1.
 
As of the end of the second quarter, Helicos had yet to book revenue from the sale to Expression Analysis. Asked during the question-and-answer session today about timing for receiving payment from customers, Lombardi said that although payment would normally come after installation of the system, right now Helicos is “being creative.” He noted that because Helicos is offering a new kind of technology it has to prove to customers that the system can perform as advertised.
 
Lombardi provided investors with a cost comparison of the Helicos Genetic Analysis System with an unnamed competitor in the next-generation DNA sequencing market. Though Helicos’ system costs significantly more than those offered by its competitors — Illumina, Applied Biosystems, and Roche 454 — Lombardi said that the total cost of ownership, when taking into account extra costs such as sample prep and reagents, is roughly $1.35 million versus $1.16 million from the competing product.
 
While the Helicos system is still more money, Lombardi said that it provides customers with higher throughput and a faster turnaround. Asked how the HeliScope will compete against the newest version of ABI’s SOLiD sequencer, which ABI plans to launch next week, Lombardi said the HeliScope’s “combination of benefits will make us a winner in the marketplace.”
 
He acknowledged that the firm “lost six months of time,” during which customers were purchasing competing systems, due to a reagent stability issue that impacted sequencing performance, thereby limiting the firm’s ability to generate data and secure orders. Lombardi had previously said that the reagent issued has been rectified.
 
While Helicos awaits more orders and revenue from customers, its cash — around $24.4 million as of the end of the second quarter on June 30 — and ability to fund operations was also a subject of conversation during the question-and-answer portion of its presentation. CFO Stephen Hall said that the firm would do an “opportunistic funding” by the end of the first quarter of 2009, with an eye on limiting dilution of its stock.
 
In addition, on the final day of the second quarter — and not included in its second-quarter report, Helicos said in a filing with the US Securities and Exchange Commission that it received $10 million under an amended loan agreement that it originally signed with General Electric Capital Corporation and other lenders in December 2007.
 
In Thursday afternoon trade on the Nasdaq, Helicos’ shares were down 4 percent at $1.92.
 

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