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Nanogen Says Q4 Revenues Will Be Lower than Expected

NEW YORK, Jan 9 – Nanogen announced Tuesday it will post lower-than-expected fourth-quarter revenues due to lowered sales of NanoChip custom electronic microarray cartridges, but noted it had shipped 16 NanoChip molecular biology workstations during the quarter and that its losses for the fourth quarter would remain in line with Wall Street’s expectations.

The company said it estimated its fourth-quarter revenues would be $2.7 to $3 million, that its fourth-quarter losses would be somewhere between 29 and 32 cents per share, and that the total net loss per share will total between 91 and 94 cents per share. Wall Street has expected the company to post losses of 38 cents per share for the fourth quarter, and $1.04 for the year, according to a survey by FirstCall Thomson Financial.

The company attributed the lower revenue not only to lower-than-anticipated sales of NanoChip cartridges, but to more of its sales being “non-title transfer transactions” than it had originally expected.

Nanogen said it shipped 16 molecular biology workstations in the fourth quarter. However, only two of these were actual sales; Nanogen shipped 14 under its site development program, in which Nanogen provides special access to the system for institutions that develop assays on the Nanogen platform, in exchange for access to the technology. The institutions can then buy the technology after the applications have been developed, but these agreements are not sales arrangements.

" While we remain confident that Nanogen will gain increased presence in these diverse and strategic markets and will continue to enhance the value and applicability of the NanoChip Molecular Biology Workstation, the near term financial impact of these market-building strategic development site agreements is lower near term revenues,” Nanogen CEO Howard Birndorf said in a statement.

" We previously stated that the focus of our initial launch phase will be on establishing a diverse and respected customer base that will provide added value to Nanogen’s product launch by developing protocols, acting as reference sites, publishing studies or speaking at conferences,” Birndorf said. “We have assembled an enviable list of leading research institutions as part of this program.”

In December, the company said it placed eight systems under its development site program at academic institutions, including the University of Pennsylvania, the Children's National Medical Center in Washington, D.C., the University of Minnesota, Stanford University, the University of California, San Diego, the University of Chicago, Staten’s Serum Institute, Denmark, and the National Cancer Institute at Frederick. Nanogen also sold a workstation to the University of Alberta.

Nanogen plans to announce final fourth-quarter results on January 31.

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