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Stratagene's Q3 Revenue Slides 2 Percent as Invitrogen Damages Distend Losses

NEW YORK (GenomeWeb News) — Stratagene today said third-quarter revenues decreased 2 percent as an unfavorable court decision caused net losses to balloon 817 percent.
Total receipts for the three months ended Sept. 30 decreased to $23.2 million from $23.7 million year over year. The company blamed part of the slide on declining sales in its gene-discovery and cloning systems products.
R&D spending remained flat at around $2.8 million.
The company said loss increased to $6.3 million from a $688,000 profit in the year-ago period. Stratagene blamed the loss on a $12.5 million pre-tax litigation charge it paid on a patent-infringement lawsuit with Invitrogen.
On Oct. 31 a district court in Texas ordered Stratagene to pay Invitrogen $16.2 million after finding it had willfully infringed Invitrogen’s E. coli cell products. That amount tripled an earlier jury award.
“We were disappointed by the court’s decision to enhance the award,” Stratagene CEO and President Joseph Sorge said in a statement, adding that “the court had twice earlier found Stratagene to be not liable due to non-infringement and invalidity of Invitrogen’s patent.”
Stratagene reiterated its plan to appeal the case and said it will post an appeal bond to stay payment of the damages. Stratagene said it had around $16.6 million in unrestricted cash and cash equivalents as of Sept. 30. It said posting the bond will “have a significant impact on the cash resources of the company because the appeal bonds require cash be set aside for the full amount of the damage awards.”
It has also filed a document with the Securities and Exchange Commission asking it for five more days to complete documentation and disclosures for the third quarter.
Aside from its legal woes, Sorge said Stratagene is “expanding our QPCR instrument footprint, developing additional reagent technology and entering into new relationships. … ”

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