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... as Q2 Loss Widens on Declining Sales; Firm Cuts '06 Revenue Forecast

Cepheid’s Q2 revenue did not fall across the board as was originally reported; clinical product sales increased 135 percent during the period. Also, the company had around $80.5 million in marketable securities as of June 30.
 
NEW YORK (GenomeWeb News) – Cepheid yesterday reported a 7-percent drop in second-quarter revenues as products and services declined in most segments.
 
The news caused shares in the company to trade down 18.7 percent, or $1.62, to $7.05 mid-afternoon today.
 
Total receipts for the three months ended June 30 declined to $19.8 million from $21.4 million year over year.
 
Instrument sales had the largest decline, about 45 percent, from the comparable quarter last year. Reagent and disposable sales declined 15 percent, contract revenues declined 9 percent, and grant and government research revenues declined 34 percent.
 
Cepheid said the sales decrease was the result of lower-than-expected sales in its industrial market segment. The company also said second-quarter 2005 figures included GeneXpert module sales to the United States Postal Service as part of the Biohazard Detection System installation. The contract ended last year.
Industrial product sales declined 29 percent to $2.8 million from $3.9 million year over year; and biothreat product sales decreased by 17 percent to $12.1 million in the second quarter of 2006 from $14.6 million year over year.
 
Other revenues, including contract and grant and government sponsored research revenue, decreased 18 percent to approximately $1 million for the second quarter of 2006 as compared to $1.2 million in the second quarter of 2005.
 
The decrease in this segment “was due primarily to the decrease in grant and government sponsored research revenue,” Cepheid said.
Clinical product sales increased 135 percent to $4 million from $1.7 million year over year. This segment represented 21 percent of total product sales for the second quarter of 2006 compared with 9 percent in 2005, Cepheid said.
The company reported a net loss of $7 million in the quarter compared to a net loss of about $3.6 million in the same quarter one year ago.
 
Based on this quarter’s sales figures and on the fact that regulatory clearances for some of its products are taking longer than expected, the company adjusted its financial guidance for 2006. Cepheid now expects 2006 product sales between $83 million and $86 million, and a net loss for the year between $12 million and $14 million.
 
R&D spending grew 28 percent to $5.8 million for the quarter from $4.5 million in the prior-year period.
 
As of June 30, Cepheid had $31.4 million in cash and cash equivalents and $80.5 million in marketable securities.

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