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Sequenom's Revenues, Net Loss Increase in Q4

This article has been updated to include comments from the firm's conference call.
 
NEW YORK (GenomeWeb News) – Sequenom reported Wednesday that its fourth-quarter revenues rose 41 percent, due primarily to increased placements of its MassArray systems, while its net loss widened 28.3 percent on an increase in expenses.
 
San Diego-based Sequenom generated revenues of $11.1 million for the three-month period ended Dec. 31, compared with revenues of $7.9 million in the comparable period the year before.
 
In a conference call following the release of the firm's results, Sequenom President and CEO Harry Stylli said that the firm placed 15 MassArray systems with customers during the quarter, bringing the total number of placements for the year to 55, and the total number in the market overall to roughly 200.
 
The firm posted a fourth-quarter net loss of $6.8 million, or $.16 per share, compared with a loss of $5.3 million, or $.16 per share, in the fourth quarter of 2006. Sequenom’s increased loss was due to an uptick in R&D and SG&A expenses.
 
R&D costs rose 12.5 percent to $4.5 million year over year, while SG&A expenses climbed 49 percent to $9 million.
 
For full-year 2007, Sequenom reported revenues of $41 million, a 44 percent increase over revenues of $28.5 million in 2006. Its net loss was $20.9 million, or $.54 per share, a 15.9 percent increase over a net loss of $17.6 million, or $.71 per share, for 2006.
 
Sequenom’s R&D expenses for the year rose 21 percent to $14.4 million from $11.9 million. Its SG&A costs increased 38.8 percent to $31.1 million from $22.4 million.
 
Sequenom finished 2007 with $53.1 million in cash, cash equivalents, restricted cash, and short-term investments.
 
The firm expects to report 2008 revenues of $53 million to $56 million, and a net loss for the year of between $30 million and $33 million.
 
Paul Hawran, CFO of Sequenom, said during the conference call that the firm expects R&D costs in 2008 to be between $26 million and $28 million. "The increase in research and development consists of a shifting of resources to non-invasive pre-natal diagnostics as we move closer to commercialization, while also continuing to develop new applications in our genetic/genomic analysis business," he said.
 
"Fine mapping genotyping will remain the engine of our growth in 2008, with an increasing contribution from epigenetic and quantitative gene expression analyses," Stylli said during the call. "We are beginning to see increasing demand from translational and clinical testing groups, for example, in oncology and metabolic diseases … [and] we believe that these segments are potentially larger and more diverse opportunities than fine mapping alone."

Stylli said that 75 percent of the firm’s investments in 2008 will be directed to developing molecular diagnostics. He said the firm’s "prime focus" in 2008 is to launch Rhesus D and gender tests for its MassArray platform and to finish developing its non-invasive genetic test for Down syndrome, which it hopes to launch in the first half of 2009.

 
In early Thursday trade on the Nasdaq, Sequenom's shares were up 7.1 percent at $8.25.

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