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Addition of Familion Genetic Tests Hikes Transgenomic's Q2 Revenues 51 Percent

NEW YORK (GenomeWeb News) – Transgenomic reported after the close of the market on Thursday a 51 percent increase year over year in sales for the second quarter driven by the addition of the Familion portfolio of genetic tests.

For the three months ended June 30, the Omaha, Neb.-based company posted $7.7 million in sales, up from $5.1 million a year ago. The company attributed the hike primarily to its acquisition of the Familion genetic testing business from Clinical Data in December.

Craig Tuttle, president and CEO of Transgenomic, said in a statement that the business contributed $2.6 million in sales to its pharmacogenomics research services, which overall grew 223 percent year over year to $1 million in the quarter. The growth was driven by a large ongoing project for a large pharmaceutical client involving tests on a large number of clinical trial numbers, Brett Frevert, the company's CFO, said on a conference call following the release of its earnings.

Total Laboratory services grew 292 percent year over year to $4.9 million.

Transgenomic's Neurology lab business had $1.2 million in sales, Tuttle said, adding the company expects it and the Familion business "to continue growing due to new test offerings and further sales penetration into their respective markets."

The Pharmacogenomics Services Lab continues to perform cancer pathway gene mutation analysis for "a number" of drug firms, the company said, and utilizes its DNA mutation detection technologies called Cold-PCR and Ice Cold-PCR.

The company has also developed a new technology to further improve mutation detection sensitivity of standard Sanger sequencing that it calls Blocker-Sequencing, "and we are combining this new discovery with our Ice Cold-PCR program to bring what we believe to be the most accurate and sensitive mutation detection technology available in the market today," Transgenomic said.

The combination of the two technologies, "offers us the ability to develop tests for cancer detection or to measure cancer recurrence at earlier stages in the disease process, aiding in drug selection or drug resistance determinations for these patients," it added.

On the company's conference call, Tuttle added that Transgenomic has completed the development of an Ice Cold-PRC assay kit for KRAS gene mutations, and the company will begin beta-site testing of the kit later this month. Following those studies, the kits will be launched in the US, Europe, and Asia.

Development of assay kits for BRAS and PIK3CA is also ongoing.

"Following clinical testing and launch of these assays, we will focus on our next assay targets … with the goal of completing gene mutation panels for several tumor types," Tuttle said.

The firm is moving ahead with beta-site testing of BRAS and PIK3CA Surveyor Scan assays, and Transgenomic expects to launch the assays along with an instrument system in Europe by the end of the year, he said.

In its instruments business, bio-instruments were down 41 percent to $1.3 million while bio-consumables sales shrank $155,000 from a year ago to $1.5 million, Frevert said on the conference call.

The company increased R&D spending in the quarter 13 percent year over year to $579,000 from $512,000, and SG&A spending increased 87 percent to $5.6 million from $3 million.

Transgenomic's net loss in the quarter increased to $6 million, or $.13 per share, from $1.1 million, or $.02 per share, a year ago. The jump was attributed to non-cash charges of $4.2 million for preferred stock expenses, $800,000 for stock option grants, and $300,000 for amortization of acquired intangible assets, Transgenomic said.

Excluding those expenses, net loss would have been $700,000.

Transgenomic ended the quarter with $2.6 million in cash and cash equivalents.

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