Nanogen appears to be rebounding from a rough spell. The company reported ten placements of its flagship product, the NanoChip molecular biology workstation during the third quarter, or triple the number reported in the second quarter.
These placements included seven title transfers and three non-title transfer transactions under development site agreements, and bring the company’s installed base of workstations to 40. Typically each NanoChip workstation sells for $160,000, so the total revenue reported from product sales for the quarter could be as much as $1.1 million.
For the second quarter, Nanogen reported only $300,000 in product revenues, in addition to $2.4 million in revenue from sponsored research programs, corporate alliances, and government grants. Additionally, the company paid $5 million to settle a long-standing patent dispute with Motorola. Nevertheless, the company promised that the second half of the year would bring a turnaround.
This news of new placements appears to signal that Nanogen is following through on its promise. If this non-product revenue remains consistent, Nanogen’s third-quarter revenues could rise to $3.5 million. While these revenues would remain unchanged compared to the third quarter of 2000, when the company reported $3.5 million in revenues, they would represent significant progress toward the company’s year-end revenue goals of $13 to $15 million, and also would consist of a greater proportion of product revenue than year-ago revenues.
These new sales are “keeping us on track to meet our year-end placement goals and revenue forecasts as set forth in our second quarter conference call,” said Howard Birndorf, Nanogen’s executive chairman and founder, in a statement.
Birndorf attributed the strong third quarter to the leadership of the company’s new CEO, Randy White, who took the helm in May and “has already made a substantial impact on our commercialization efforts.”