NEW YORK, Nov. 4 - Nanogen today posted receding third-quarter revenues, strong growth in R&D spending, and widened net loss.
The company also said that despite standing to pocket $25 million from a settled patent suit last month, it has decided to lay off 10 percent of its workforce in hopes of shaving $5 million off its burn rate next year. Nanogen spokesman Gerard Wills told GenomeWeb that the staff reductions, which amounted to fewer than 20 people, began two weeks ago and will continue over the next three to four weeks.
For the period ended Sept. 30, Nanogen posted $1.6 million, compared with $3.2 million year over year, and R&D spending in the quarter swelled to $5.8 million from $4.8 million during the same time one year ago. However, total operating expenses shrank by just under $1 million thanks to the settlement last month with CombiMatrix.
Still, net loss in the quarter increased to $8.2 million, or $.38 per share, from $7.0 million, or $.33 per share, year over year.
The company said it had roughly $13.3 million in cash and cash equivalents as of Sept. 30.
As GenomeWeb reported last month, CombiMatrix will pay Nanogen a $1 million lump sum and cough up as much as $1.5 million a year for the next 16 years after settling a two-year-old patent dispute. The company will also issue Nanogen four million shares of its common stock--or around 17.5 percent of all outstanding shares.
Nanogen will receive half of the initial $1 million within 30 days, with the remainder coming within one year, the companies said. The $1.5 million maximum annual payout comes from a minimum of $37,500 CombiMatrix will pay Nanogen over one year beginning on Oct. 1, 2003.
After that initial period, CombiMatrix will pay Nanogen $25,000 every three months until the two patents at the center of the dispute expire--which isn't due for another 16 years. According to both firms, the maximum annual total is based on calculating 12.5 percent of the first $12 million CombiMatrix may earn in annual net revenues from product sales.