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Fluidigm CEO Talks up Single-Cell Genomics Prospects, Olink Alliance after 'Strong' Q2

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This story was originally posted on Aug. 2.

Fluidigm last week raised its full-year 2013 guidance after posting 36 percent second-quarter revenue growth, largely due to increasing demand for its single-cell genomics products.

The company had been projecting revenue growth of between 22 and 26 percent over its full-year 2012 revenue of $52.3 million, but based on its "strong performance in the first half of the year, the acceleration of our end markets, and visibility into the remaining half of 2013," the company now projects revenue growth that is between 27 and 31 percent over FY 2012 revenues, CEO Gajus Worthington said on an earnings call.

Based on the new guidance, Fluidigm now expects to end the year with total revenues of between $66.4 million and $68.5 million.

Much of that anticipated growth will come from the single-cell genomics market. Worthington said that 45 percent of the $17.5 million the firm posted in Q2 was generated by single-cell genomics sales.

Fluidigm's flagship single-cell genomics product is its C1 Single-Cell Auto Prep System, an automated single-cell isolation and preparation instrument that isolates, lyses, and preamplifies nucleic acid from single cells. Using the C1, customers can capture and prepare 96 individual cells for analysis per run.

At the time of the C1's launch last year, Fluidigm customers could profile expression in 96 wells across 96 mRNA targets on the company's BioMark HD instrument. Since the launch, it has also added protocol for single-cell mRNA sequencing (BAN 2/19/2013).

Last week, it released protocol that supports microRNA expression in conjunction with the BioMark HD. The new protocol allows the interrogation of more than 370 miRNA targets across 96 cells, the company said.

Worthington said that Fluidigm will introduce a single-cell whole genome amplification chip and protocol by the end of the year.

Overall, single-cell genomics revenue more than doubled in the quarter, year over year. Worthington said that the company anticipates having 700 C1 systems installed in the field for single-cell analysis by the end of 2015. He did not say how many systems have been installed to date.

'New opportunities'

Last week, Fluidigm and Uppsala, Sweden-based Olink Bioscience announced a co-marketing agreement. The deal calls for Fluidigm to market its BioMark HD system together with Olink's Proseek Multiplex technology, and is Fluidigm's first foray into the protein analysis market.

To coincide with the announcement, Olink also launched its Proseek Multiplex Oncology I 96x96 Kit, which enables users to interrogate 96 human samples against a panel of 92 analytes, such as growth factors, inflammatory markers, soluble receptors, or cancer antigens. With the addition of four control analytes, researchers can now obtain results for up to 9,216 reactions in just a few hours, the firms claimed.

Panels addressing cardiovascular disease and inflammation are expected to be offered later this year.

Olink's Proseek Multiplex kits are based on its proximity extension assay. The firms said that PEA uses pairs of oligonucleotide-labeled antibodies equipped with DNA reporter molecules to bind to proteins of interest in a highly specific manner, "solving the antibody cross-reactivity dilemma that plagues and limits conventional protein assays."

Worthington called the product combination a "dramatic improvement over legacy multiplex immunoassays that are limited to tens of assays due to antibody cross reactivity." He said the products address the needs of current Fluidigm cell biology customers, "who are very interested in RNA signatures in conjunction with protein signatures."

He also said that it "opens up new opportunities" for Fluidigm in the protein analysis market.

"There are plenty of biomarker researchers who focus on proteins to exclusion of nucleic acids," he said.

Financials and geographies

For the three months ended June 30, total revenues were $17.5 million, compared to $12.9 million for the second quarter of 2012, and beating the average Wall Street estimate of $15.9 million.

During the quarter, Fluidigm posted $17.3 million in product revenues, a 35 percent increase from $12.8 million a year ago, while license and grant revenues were up 18 percent to $213,000 from $180,000. Within product revenues, instrument revenues increased 48 percent year over year to $10.2 million from $6.9 million. Consumables revenues grew 20 percent to $7.1 million from $5.9 million.

Fluidigm said that its installed instrument base increased to about 780 units at the end of the second quarter. Analytical systems — BioMark, BioMark HD, and EP1 — made up 62 percent of the installed base, while preparatory systems — Access Array and C1 — comprised the remaining 38 percent.

Consumables pull-through for its analytical systems stayed within its historical range of $40,000 to $50,000 per instrument per year, Fluidigm said. Consumables pull-through for its preparatory systems was above its historical range of $10,000 to $15,000.

CFO Vikram Jog broke down the geographic origin of product revenues during the call. He said that sales in the US accounted for 59 percent of Q2 product revenues, European revenues were 26 percent, Asia Pacific revenues were 9 percent, Japanese revenues were 2 percent, and revenues from other geographies made up 4 percent of Q2 product revenues.

While Jog said that Fluidigm was "very pleased with growth in two largest geographies" — the US and Europe, which each grew 56 percent year over year — revenues in Japan were down over the prior year period.

Worthington acknowledged that from a revenue perspective, Japan was "weak" in Q2, but noted that the firm has changed its management in Japan, and that orders were up in the quarter. He also said that Fluidigm is encouraged by "continued stimulus spending in Japan, at least in part directed into markets in which we are a primary participant."

Other firms in the microarray and multiplexing space, including Affymetrix and Illumina, have also discussed the opportunities presented by Japan's ¥10.3 trillion ($117 billion) economic stimulus package, which includes ¥721 billion earmarked for scientific research and ¥21.4 billion devoted to stem cell research (BAN 3/12/2013).

The firm's net loss for the quarter improved to $4.0 million, or $.16 per share, from a net loss of $4.6 million, or $0.22 per share, a year ago. On an adjusted basis, a net loss of $0.07 per share was well above the consensus analyst estimate of a net loss of $0.17 per share.

Fluidigm's R&D costs rose to $5.0 million, a 25 percent increase from $4.0 million a year ago. Its SG&A spending increased 23 percent year over year to $11.6 million from $9.4 million.

The company exited the second quarter with $32.3 million in cash and cash equivalents, and $28.1 million in short-term investments.

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