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WaferGen Q2 Revenues Down 6 Percent on Reduced SmartChip Sales

This article has been updated to include comments from WaferGen's conference call following the release of results.

NEW YORK (GenomeWeb) - WaferGen Biosystems reported after the close of the market Wednesday that its second quarter revenues fell 6 percent due to reduced SmartChip capital equipment sales.

For the three months ended June 30, the genetic analysis products maker reported total revenues of $1.6 million, compared to $1.7 million in Q2 2014 and short of the consensus analysts' estimate of $2.1 million.

On a conference call following the release of results, new WaferGen CEO Rollie Carlson said that the firm is progressing in pivoting towards single-cell analysis. Though WaferGen has not yet launched its single-cell business, Carlson said he expects it to become the primary driver of long-term growth and the focus of the company once it launches later in 2015. He highlighted the firm's early access program —which has attracted Genentech, the Karolinska Institute, and the National Jewish Hospital as partners— and announced that the firm has added the University of Texas MD Anderson Cancer Center as the program's fourth collaborator. Financial and other details of the agreement were not disclosed.

Carlson added that WaferGen will be seeking growth capital to support the launch of its single-cell technology.

Product revenue decreased 6 percent to $1.5 million from $1.6 million, while the firm's license and royalty revenue remained flat for the quarter at $125,000. The drop in SmartChip capital equipment sales was offset by a 60 percent increase in real-time PCR chip panels and services revenues. Apollo revenues increased by $170,000, accounting for 51 percent of all product revenue for the quarter.

The company had a net loss for the quarter of $3.8 million, or $.67 per share, compared with a loss of $2.1 million, or $2.28 per share, in the year-ago period, falling short of the consensus Wall Street estimate of a $.65 loss per share.

WaferGen's R&D spending shot up 53 percent to $2.3 million from $1.5 million in Q2 2014, due to costs associated with developing single-cell technology, while its SG&A expenses fell 6 percent to $2.5 million from $2.7 million.

WaferGen ended the quarter with $7.4 million in cash and cash equivalents.

"In regards to our current base business, due to a delay of the launch of a clinical test by a large reference lab customer, as well as some ongoing commercial challenges in Europe due to overall conditions in this market, we are revising our full-year 2015 revenue guidance," Carlson said.

Specifically, the firm revised its full-year 2015 revenue guidance to between $7.5 million to $7.8 million, down from $8 million to $8.5 million.