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Stratagene's Q4 Profits Triple on IP Settlement, But Revenues Slide On '05 Settlement Gain

The original version of this article failed to report that Stratagene posted a decline in fourth-quarter 2006 revenue because of one-time settlement income received from Cambridge Antibody Technology during the fourth quarter of 2005.
 
NEW YORK (GenomeWeb News) — Stratagene yesterday said fourth-quarter revenues fell 57 percent as R&D spending dipped 18 percent and profit increased 350 percent as the company settled an expensive patent-litigation suit with Third Wave Technologies.
 
Total receipts for the three months ended Dec. 31, 2006, decreased to $24.7 million from $57 million year over year. The company said the year-over-year comparison includes
a one-time settlement income received from Cambridge Antibody Technology during the fourth quarter of 2005.
 
Without this gain, revenues in the current quarter rose 7.2 percent on strong sales of QPCR instruments and reagents and allergy diagnostics products.
 
R&D spending fell slightly to $3.1 million.
 
The company said net income rose to $9 million from $2 million in the year-ago period.
 
Stratagene had $9.7 million in unrestricted cash and equivalents and $33.1 million in restricted cash at the end of 2006.
 
The company said it expects full-year 2007 revenue growth in the “low to single digits” from its core research and clinical diagnostics businesses.
 
During the quarter, Stratagene settled a PCR-related patent lawsuit with Third Wave for $10.75 million, which, with a reduced award and the redemption of a $21 million cash bond, greatly reduced the company’s expenses.
 
"We resolved the litigation matter with Third Wave, which returns more than $10 million to our operating accounts," CEO Joe Sorge said in a statement. "A goal for 2007 is to continue to reduce expenses associated with litigation, and as a result achieve improved cash flows.”

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