Orchid Shares Plummet 27 Percent on Meek Q3 Revenues, Widened Losses

This article has been updated from an earlier version to include stock price.

NEW YORK, Oct. 27 (GenomeWeb News) - Shares in Orchid Cellmark were down 27.48 percent, or $2.30, at $6.07, in mid-afternoon trading after the company reported flat third-quarter revenues amid declining R&D spending and surging net losses.

Total receipts for the three months ended Sept. 30 were flat at $16.4 million, the company said. Revenue from services declined to $16.3 million from $16.4 million in the year-ago period. Other revenue increased to $156,000 from $93,000 year over year.

Orchid CEO Paul Kelly said he was "disappointed" by the performance of the USforensic business, but said he was "encouraged" with growth in other areas of the business.

During the quarter, he said, the company "experienced a slowdown in forensic casework production from implementation of new software and processes designed to further automate our casework sample analyses." He called this development "temporary" and said the company is "addressing" it as it wraps up implementing the new processes and hiring additional DNA analysts.

Kelly also said "there are many positive developments" that support growth in the US forensic DNA testing market, including "major legislative initiatives in support of increased forensic DNA testing, enhanced use of DNA by law enforcement to solve more crimes such as burglary, and Congressional approval of significantly expanded federal funding."

He added: "While we are frustrated by the continued bureaucratic delays in the award of NIJ funds by the states and localities, we believe Orchid Cellmark's potential for continued strong growth in its USforensic DNA testing business remains unchanged."

Orchid said R&D spending for the third quarter declined to $376,000 from $426,000 year over year.

Net losses surged to $3.8 million, or $.15 per basic share, from $395,000, or $.02 per basic share, in the same period last year.

Orchid said it had around $18.4 million in cash and equivalents and $6 million in short-term investments as of Sept. 30.