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Visible Genetics Revenues Drop As Company Shifts Kit Marketing Strategy

NEW YORK, March 8 – Visible Genetics revenues for 2000 dropped slightly to $13.1 million, from $13.6 million in 1999, due to a shift in its marketing strategy for its sequencing kits, the company said Thursday.

During the year, Visible Genetics said it de-emphasized sales to the research market, and re-focused on selling genotyping kits to the clinical market. One product, an HIV-1 genotyping kit that predicts patients’ response to HIV drugs, is currently under review by the FDA. A decision is expected in April, said VGI CEO Richard Daly.

"The future of our company lies in the clinical market, not the research market,” said Daly. Research customers using the company’s sequencing products order less frequently than clinical customers, and selling to both markets would require separate marketing and distribution networks, he said. “The two don’t have much in common."

In the meantime, fourth quarter sales of sequencing systems dropped to $600,000 from $2.8 million in the last quarter of 1999, and for the year, sales were $4.5 million compared to $7.7 million in 1999.

The drop in sales of sequencing systems contributed significantly to lower total revenues. In the fourth quarter of 1999, revenues were $5.0 million, compared to $3.0 million for the same period in 2000. Net loss for the same period widened to $10.4 million, or 65 cents per share, from $7.8 million, or 75 cents per share, in the final quarter of 1999.

For the fourth quarter of 2000, sales, general, and administrative expenses totaled $8.4 million, an increase of $2.2 million from the same period in 1999. Research and Development costs also increased, from $1.9 million in the fourth quarter of 1999 to $2.7 million for the same period in 2000.

VGI said the expense increases were associated with scale-up and marketing of its HIV genotyping kit, called Trugene. The kit received regulatory approval in France in the last quarter of 2000, and in Argentina during the first quarter of 2001.  
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