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Interleukin Posts Q4 Revenue Drop as It Continues Commercial Push for PerioPredict

NEW YORK (GenomeWeb) – Interleukin Genetics reported today that its revenues for the fourth quarter of 2014 fell by more than 50 percent to $322,005 from $671,049 year over year.

The decrease was due to less deferred revenue recognized from PerioPredict test kit sales and recognized license fee income, the firm said.

Genetic testing revenues for the quarter were $298,543 compared to $424,401 in the year-ago Q4, while other revenues were $23,462 in Q4 2014 compared to $246,648 in the fourth quarter of 2013.

Interleukin recorded a Q4 net loss of $1.6 million, or $.01 per share, compared to a net loss of $1.9 million, or $.02 per share, for the fourth quarter of 2013.

Its R&D costs for the fourth quarter were $176,264 compared to $212,062 for the year ago period. This decrease, Interleukin said, was due to “decreased compensation related to employee departures.”

The firm's SG&A expenses for the fourth quarter were $1.4 million compared to $2.0 million for the fourth quarter of 2013. The company attributed the decrease to lower expenses for the initial marketing for PerioPredic in 2013, lower consulting and professional expenses, lower employee compensation, and lower sales commissions paid based on the Merchant Network and Channel Partner Agreement with Amway Global.

For full-year 2014, Interleukin reported $1.8 million in revenues compared to $2.4 million in 2013. The higher revenues in 2013 were due to an Amway promotion that resulted in higher volumes of pre-paid PerioPredict kits returned for processing. Interleukin also earned $150,923 in royalties in 2014 compared to $198,960 in 2013.

Deferred revenue as of Dec. 31, 2014 was $3.1 million compared to $3.8 million at the end of 20213. Interleukin recognizes revenues when a test is processed in its lab and a result is issued to the customer. Usually, customers pay in advance for processing services when they buy a kit, but this prepayment is recognized as deferred revenue on the balance sheet until the test is processed; after processing, the payment is recognized as revenue, the firm explained.

According to Interleukin executives who discussed the company's financials during a call today, most of the tests sold by Interleukin come back for processing in the first two years after sale. But the chance the test will be returned for processing is “remote” after three years.

Its net loss for FY 2014 was $6.3 million, or $0.05 per share, versus a net loss of $7.1 million, or $0.08 per share, in FY 2013.

The firm's R&D expenses for the year amounted to $843,102 compared to $721,568 in 2013, while its SG&A expenses declined to $5.8 million from $6.6 million year over year.

The company reported cash and cash equivalents of $11.5 million as of Dec. 31, which company officials believe is sufficient to support Interleukin's operations for the next year.

In December, Interleukin raised $5 million in a private placement financing and entered into a loan and security agreement for another $5 million. The company said it will use these funds for commercial efforts for PerioPredict and other genetic tests, as well as for general corporate and working capital needs.