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Complete Genomics' Q4 Revenues Jump Six-fold

By a GenomeWeb Staff Reporter

NEW YORK (GenomeWeb News) – Complete Genomics reported after the close of the market Thursday that its fourth-quarter revenues increased more than six-fold, while its net loss was nearly flat year over year.

The Mountain View, Calif.-based sequencing services firm reported revenues of $3.8 million for the three-month period ended Dec. 31, compared to $623,000 for the fourth quarter of 2009.

Its net loss for the quarter was $10.3 million, or $.69 per share, versus a net loss of $10.4 million, or $110.09 per share, for Q4 2009. The firm was privately held during its fourth quarter of 2009, and went public in November 2010, raising nearly $50 million in net proceeds.

The firm's R&D spending declined 11 percent to $5.6 million from $6.3 million, while its SG&A spending jumped 78 percent to $4.1 million from $2.3 million, as the firm continued to roll out its commercial operations. Its start-up production costs rose 75 percent to $4.9 million from $2.8 million.

For full-year 2010, Complete Genomics brought in revenues of $9.4 million compared to $623,000 in 2009.

The firm's net loss was $58.1 million, or $13.60 per share, compared to a net loss of $35.9 million, or $386.56 per share, for 2009.

Its R&D spending for the year was $21.7 million, down from $22.4 million for 2009. Its SG&A spending jumped to $15.5 million from $6.7 million, and its start-up production costs rose sharply to $19.9 million from $5 million.

Cliff Reid, chairman, president, and CEO of Complete Genomics, said in a statement that the firm delivered more than 800 genomes to customers during the year. The company expects to recognize revenue from more than 500 genomes in the first quarter of 2011, up from 300 genomes in the third quarter of 2010.

The firm's order backlog for which it expects to recognize revenue at the end of 2010 was more than $10 million and more than 1,000 genomes, CFO Ajay Bansal said during a conference call following the release of the firm's financial results.

Complete Genomics increased its sales staff during the year from 2 to 12, Reid noted during the call, which has helped the firm grow its business in the US and Western Europe. He noted that the firm has received orders from 45 customers now, and its re-order rate from customers was more than 50 percent as of the end of the year.

In addition, Reid said the firm expects its orders to increase as the price of its service declines and its sequencing capacity increases.

"We expect that by the end of 2011, the price for our basic complete human genome sequencing services will be less than $5,000 per genome," said Reid. "We believe there is significant price elasticity in the market, and as the price approaches the $5,000 dollar level our solution will be adopted by researchers who have been limited to analyzing exomes because of their budget constraints."

He said that cutting that cost down will be the result of process improvements across the service.

Reid also noted that the firm has begun developing its next generation of sequencing instruments. He said the firm is targeting 10 genomes per day with the new instruments, compared to one genome per day with its current instruments, and expects to have the new machines ready for commercial use in 2012.

In addition, he said the firm is targeting a two- to three fold increase in sequencing capacity by the end of the year from its current capacity of about 400 genomes per month.

As of yesterday, its order book stood at more than 1,400 genomes, Reid said, which includes orders for 615 genomes from the Institute for Systems Biology, but it does not include the National Cancer Institute's option for an additional 1,128 genomes under a pediatric cancer research deal signed in September.

Complete Genomics finished 2010 with $68.9 million in cash and cash equivalents.

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