Nanogen Reports Q3 Results, Will Close Array Business
Nanogen this week said third-quarter revenues rose 11 percent as R&D spending rose 16 percent and the company cut its net loss by 36 percent.
Total receipts for the three months ended Sept. 30 rose to $8.4 million from $7.5 million year over year.
The company said product-related revenue increased 17 percent to $5.5 million from $4.7 million, and income from licensing and royalties slipped 2 percent to $1.8 million from $1.9 million.
Revenue from contracts and grants rose 8 percent to $986,000 from $912,000. R&D spending rose to $7.2 million from $6.2 million year over year. The company said its net loss narrowed to $7.5 million from $11.8 million in the year-ago period.
Nanogen had around $8.2 million in cash and cash equivalents and $7.1 million in short-term investments as of Sept. 30. The company said it expects revenue for the fourth quarter to be around $9 million, while its full-year revenue for 2008 could increase as much as 25 percent over 2007.
Meantime, the firm said it has decided to close its array business and reduce staff by 20 percent. In September, Nanogen said that it hired Credit Suisse to help it evaluate strategic opportunities for its microarray business that could include selling, closing, or finding a partner for it.
President and Chief Operating Officer David Ludvigson said in a statement that Nanogen’s “analysis of alternatives for the array business [did] not result in any financially meaningful opportunities.”
Eliminating the investment and operating costs for the array product group will result in an operating expense reduction of approximately $15 million. “This significant improvement in the bottom line will be achieved with minimal impact to our revenues,” Lugvigson said. Nanogen first discussed the reevaluation in September (see BAN 9/25/2007).
Affymetrix to Offer $250M of Senior Convertible Notes
Affymetrix this week said that it has filed a shelf registration with the US Securities and Exchange Commission to offer $250 million of unsecured senior convertible notes due 2038.
Affy said that it expects to grant the offering’s underwriter an over-allotment option to purchase up to $37.5 million aggregate principal amount of additional notes.
The firm intends to use proceeds for working capital and general corporate purposes, which could include capital expenditures and potential acquisitions of business, products, or technologies. Affy also said that it may use the funds to repurchase or redeem all or a portion of its .75 percent senior convertible notes due 2033.
JP Morgan Securities is the sole book-running manager of the offering.