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CombiMatrix Needs to Raise Funds as Q4 Revenues Fall 37 Percent

NEW YORK (GenomeWeb News) – CombiMatrix reported after the close of the market on Wednesday that its fourth-quarter revenues decreased 37 percent as revenue from government contracts and products declined year over year.

In addition, the firm said that it would need to raise additional funds, as its $9.1 million in cash, cash equivalents, and available-for-sale investments as of the end of 2008 will carry the firm only until September.

CombiMatrix brought in total revenues of $1.2 million for the three-month period ended Dec. 31, compared to total revenues of $1.9 million for the fourth quarter of 2007. Its revenues from government contracts decreased to $338,000 from $851,000, while its revenues from products dropped to $247,000 from $737,000. The firm's revenues from services were up sharply to $549,000 compared to $225,000 the year before.

The firm's net loss for the quarter was $4.1 million, or $.66 per share, compared to a net loss of $3.5 million, or $.58 per share, for the fourth quarter of 2007.

Its R&D spending rose 18 percent to $1.3 million from $1.1 million, and its SG&A spending decreased slightly to $2.4 million from $2.5 million year over year.

For full-year 2008, CombiMatrix's revenues increased 5 percent to $6.3 million from $6 million. Revenues from government contracts were flat with 2007 at $2.7 million, while product revenues dropped to $1.6 million from $2.5 million. Service revenue jumped to $1.7 million from $611,000.

The firm's 2008 net loss was $15 million, or $2.46 per share, compared to a net loss of $12.6 million, or $2.10 per share, for 2007.

Its R&D costs declined to $4.9 million from $6 million, while its SG&A spending was $9.2 million versus $9.5 million for 2007.

Amit Kumar, president and CEO of CombiMatrix, called 2008 a "transformative year" for the firm, as it "launched a record number of products in our diagnostics business, including the introduction of our first prostate cancer array-based test."

The firm is preparing for a launch next year of its Comprehensive Cancer Array test. Last week, it presented positive data from a study on the test for early detection of cancer.

However, CombiMatrix cautioned that it only has enough cash to support operations until September of this year.

"In order for our company to continue as a going concern beyond this point and ultimately to achieve profitability, we will be required to obtain capital from external sources, increase revenues and reduce operating costs," the firm said in a statement. "As a result, the anticipation that we will be required to obtain additional financing in the foreseeable future raises substantial doubt about our ability to continue as a going concern beyond September 2009."

In early Thursday trade on the Nasdaq, shares of CombiMatrix were down 10 percent at $8.12.

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