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Nanosphere's Q2 Revenue Falls, Loss Widens

NEW YORK (GenomeWeb News) – Nanosphere today reported that its second-quarter revenues fell 62 percent and its loss grew by 17 percent. 
 
For the quarter ended June 30, 2008, Nanogen’s total revenue fell to $195,000 from $510,000 in the second quarter of 2007.
 
Revenue from grants and contracts fell to zero for the quarter, compared to $503,245 in the prior-year quarter, while product sales grew to $194,715 from $7,025 in the second quarter of 2007.
 
The company’s product revenues were down sequentially, however, compared to $303,000 in the first quarter of 2008. Nanosphere said that the sequential decline was due to “all new instrument placements being reference and reagent rental agreements, rather than outright sales” of the Verigene platform.
 
William Moffitt, Nanosphere's president and CEO, also cited a “delay” in getting the company’s cystic fibrosis assay into the market as another factor that impacted sales.
 
“While we are disappointed with the time it has taken so far in getting our cystic fibrosis assay to the market and accelerating placements of the Verigene System, this and other tests we anticipate delivering over the next few quarters represent a market opportunity in excess of $1 billion,” Moffitt said.
 
He said that the cystic fibrosis assay is currently in the “final stages” of clinical trials and the company expects to file for approval with the US Food and Drug Administration “soon.”
 
Nanosphere’s R&D spending rose 14 percent to $6 million from $5.3 million. The company attributed the increase to the fact that it has been scaling up its manufacturing capabilities “to meet customer demand for products and to provide for increased capacity to support new product commercialization.”
 
Sales, general, and administrative expenses rose 22 percent to $3.8 million from 3 million. Nanosphere said that the increase was due primarily to a $300,000 increase in sales personnel expenses and other marketing expenses to support the sales of the Verigene System, as well as $400,000 of “public company related expenses,” including consulting, legal, and audit fees
 
The company’s total costs and expenses increased 19 percent to $10 million from $8.4 million.
 
Nanosphere posted a second-quarter net loss of $9.8 million, or $.44 per share, compared to $8.4 million, or $10.85 per share, in the year-ago period.
 
As of June 30, Nanosphere held cash and cash equivalents of $94 million.