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Fluidigm Sees 2013 as 'Watershed Year' for Single-Cell Genomics, as C1 Sales Drive Q1 Revenues


This article was originally posted on May 3.

Fluidigm continues to benefit from its efforts to serve single-cell genomics researchers.

The South San Francisco, Calif.-based biochip company last week reported a 33-percent spike in first quarter revenues, driven by sales of its C1 Single-Cell AutoPrep System, as well as increased demand for its integrated fluidic circuit chips from its agricultural and clinical laboratory clients.

CEO Gajus Worthington in an earnings call said that the company expects these trends to continue, and that the firm is projecting revenue growth in 2013 of between 22 and 26 percent over its 2012 revenue of $52.3 million, largely because of "market enthusiasm" for single-cell genomics, which he said now generates about 40 percent of the 14-year-old company's revenues, both from sales of the C1 and the BioMark HD and associated consumables for single-cell gene expression.

"We believe 2013 will be a watershed year for single-cell genomics," said Worthington, citing Fluidigm's "substantial growth in the sector," and external indicators that include the establishment of three single-cell genomics centers at major research institutions in the past year, including the Broad Institute in Cambridge, Mass., the Genome Institute of Singapore, and, most recently, the UK's Sanger Institute (BAN 4/16/2013).

Fluidigm launched the C1 last year. The automated single-cell isolation and preparation system 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, Fluidigm customers could profile expression in 96 wells across 96 mRNA targets on the company's BioMark HD instrument. In December 2012, the company introduced C1 mRNA Seq Kits and IFCs to enable the processing of up to 96 single-cell cDNA libraries for quantitation of mRNA expression on Illumina sequencers. Fluidigm also intends to introduce applications for single-cell microRNA analysis and targeted DNA sequencing by the end of this year (BAN 2/19/2013).

CFO Vikram Jog noted on the call that Fluidigm experienced a "high level of interest for single-cell messenger RNA sequencing on the C1" during the quarter that "exceeded our internal expectations."

Breaking down the company's Q1, Jog said that the 55 percent of the company's revenues, or $7.9 million, were generated by instrument sales, and 45 percent, or $6.4 million, by sales of consumables. A 34-percent year-over-year jump in Q1 instrument sales was driven primarily by C1 placements, Jog said, adding that about 70 percent of the BioMark HD systems sold in Q1 were purchases motivated by single-cell gene expression use. Worthington noted that about 30 percent of the C1s sold in Q1 were purchased together with a BioMark. Altogether, Fluidigm had an installed base of 720 instruments at the end of Q1, Jog said.

During the call, Worthington was asked be several analysts about the impact of sequestration in the US and a tighter funding environment abroad on the company's business. He said that interest in single-cell genomics has outweighed these concerns about funding, citing the establishment of the centers at the Broad, GIS, and the Sanger, as examples of "institutions really making an active decision to allocate funds" for single-cell genomics.

"We believe that the science behind single-cell genomics is so differentiated and important, that it will find funding even in an environment where there is either real pressure on budgets or fear about budgets or perceived pressure on budgets," Worthington said.

The company has benefited from Japan's recent economic stimulus though. Worthington said that Fluidigm's revenues in Japan doubled in Q1 compared to the prior-year quarter, despite a foreign exchange effect that diminished earnings there by about $200,000. Worthington noted that Fluidigm has "some very high-profile customers in Japan" such as Shinya Yamanaka, director of the Center for iPS Cell Research and Application at Kyoto University.

"I think it's too early to declare victory yet," he said of the Japanese market, "but we made very, very good progress for the first quarter."

Elsewhere in Q1

Fluidigm's total revenues grew 33 percent to $14.5 million for the three-month period ended March 31, compared to $10.9 million in the first quarter of 2012. It edged out the consensus Wall Street estimate of $14.3 million for the quarter.
The firm posted a net loss in Q1 of $3.6 million, compared to a net loss of $6.7 million in the first quarter of 2012.

Fluidigm's R&D expenses totaled $4.2 million in the first quarter, a slight decrease from $4.3 million in the comparable period last year. Meantime, SG&A costs rose 18 percent to $11.1 million from $9.4 million in Q1 2012. Jog attributed the increase in SG&A to "increased sales channel expenses and seasonally higher G&A expenses, offset by lower legal expenses."

During the quarter, the firm received $3.1 million in cash for its minority equity interest in Verinata Health, which was acquired by Illumina for $450 million in February.

Fluidigm finished the year with approximately $86.9 million in cash, cash equivalents, and investments.