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CombiMatrix Q1 Revenues Up 28 Percent

NEW YORK (GenomeWeb) – CombiMatrix reported after the close of the market on Wednesday that its first quarter revenues rose 28 percent on the strength of its reproductive health diagnostics business.

For the quarter ended March 31, the molecular diagnostics developer reported revenues of $3.0 million, up from $2.3 million a year ago.

Diagnostics services revenues made up $2.9 million of the total, a 26 percent increase over the $2.3 million the company reported in Q1 2015. Revenues from royalties totaled $42,000 for the quarter, flat with the year-ago period.

CombiMatrix saw a 39 percent increase in reproductive health diagnostic test revenues, which rose to $2.2 million from $1.6 million a year ago. Testing volumes for the segment increased 18 percent to 1,426 from 1,206. Total testing volume from all segments rose 13 percent to 2,648 from 2,345 in Q1 2015.

"We are reporting another exceptional quarter of financial progress," said President and CEO Mark McDonough in a statement. "Our growth was driven by a 39 percent increase in reproductive health revenue on an 18 percent increase in test volume, reflecting higher average revenue per test. We are particularly pleased with our performance in miscarriage analysis testing, with revenues up 43 percent on 13 percent test volume growth. We also benefited from better productivity from our newer sales representatives, which contributed to an 18 percent increase in our customer base."

On a call with analysts, McDonough pointed out some of the company's recent highlights, including the formation of a scientific advisory board and a new test launched in April. The diagnostic, called CombiPGD, is a test for single-gene disorders and chromosomal translocations performed prior to embryo implantation in in vitro fertilization procedures.

He also said that he anticipates a positive impact from recommendations from the American College of Obstetricians and Gynecologists and the Society for Maternal-Fetal Medicine that all women regardless of age or other risk factors are offered prenatal genetic testing. The recommendations emphasized the need for confirmatory testing after positive results from prenatal genetic screening, McDonough said, adding that CombiMatrix's products can provide the confirmatory testing these groups recommend.

McDonough further highlighted new policies put forth by payors such as Cigna and Blue Cross Blue Shield to cover chromosomal microarray testing for recurrent miscarriage. More payors are likely to follow suit, presenting CombiMatrix with an opportunity to increase business, he said.

The firm's net loss widened in Q1 to $3.1 million, or $3.63 per share, from $2.7 million, or $3.37 per share, a year ago. CombiMatrix attributed the higher net loss to one-time, non-cash charges of $1.9 million related to deemed dividends from the issuance of Series F convertible preferred stock and warrants in the $8.0 million public offering that closed on March 24.

Its R&D costs fell 9 percent to $143,000 from $157,000, while SG&A expenses rose 4 percent to $2.8 million from $2.7 million.

At the end of the quarter, CombiMatrix reported cash, cash equivalents, and short-term investments of $6.6 million.

"We are firmly focused on growth and a path toward profitability, supported by tight execution of our business strategy," McDonough said in the statement. "This year we plan to expand our IVF testing portfolio and expect to increase physician adoption through more clinical validation, improved marketing developed from the insights from our newly appointed scientific advisory board, and greater productivity from our sales organization."

He added that the firm is seeking to "enhance shareholder value through partnerships and other business development alternatives."