NEW YORK, June 19 - Three weeks after announcing its proposed acquisition of Gemini Genomics, Sequenom provided additional details Tuesday about the combined company's business strategy and financial projections.
In May, San Diego-based Sequenom said that it had agreed to acquire clinical genomics company Gemini Genomics, of Cambridge, UK, for $238 million in stock in an effort to boost the company's drug development and clinical capabilities.
On Tuesday, Sequenom reiterated its planned strategy to split the company into two business units, Sequenom Genomics, made up of Sequenom's MassArray SNP genotyping equipment business, and Sequenom Biotherapeutics, which will include Sequenom's drug target discovery operations and all of Gemini Genomics' clinical genomics operations.
In a joint effort, Sequenom and Gemini Genomics currently have identified 115 candidate disease genes using population genetics and SNP genotyping. By the middle of next year, Sequenom said, the initiative's leaders hope to have identified 400 such candidate genes.
Sequenom also outlined its projected revenues and cash burn rate for the next year and a half. As of March 31, the two companies had a combined cash position of $208 million. By the end of the year, however, that number is expected to drop to $150 million, with $36 million going to operating expenses and $22 million attributed to the cost of integrating the two companies.
For 2002, Sequenom said that Sequenom Biotherapeutics, which will include Gemini Genomics, will burn $15 million in cash, and that the MassArray business will require an additional $35 million in operating costs, for a total 2002 burn rate of $50 million.
Revenues, the companies predicted, will double between 2001 and 2002, from $30 million to $60 million. Sales of MassArray systems will account for approximately 65 percent to 75 percent of the revenues before deducting the cost of goods sold.