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CombiMatrix Q2 Sales Rise 6 Percent on Prenatal Testing Demand

NEW YORK (GenomeWeb News) -- CombiMatrix today reported a 6 percent year-over year-increase in first-quarter revenues.

Total revenues rose to $1.3 million from $1.2 million in the second quarter of 2011. CombiMatrix said that it performed 1,459 billable diagnostic tests for 116 customers in Q2, compared to 1,201 tests for 106 customers in the prior year period.

Demand for CombiMatrix's microarray-based prenatal testing services drove the revenue growth. The company said that revenues related to its "core prenatal testing markets" grew by 48 percent to $422,000 from $284,000 in Q2 2011.

CEO Judd Jessup attributed that growth to a company decision to focus its sales efforts exclusively on the prenatal and pediatric testing markets, while relying on partnerships to serve the oncology testing market. In the past, CombiMatrix attempted to serve both via a direct sales force.

"We are pleased that our new strategy and refocused commercial activities had a positive impact on revenues and sales force efficiency in the second quarter," Jessup said in a statement.

He said that other sources of the increased revenues included laboratory and analytical support services associated with a clinical trial being conducted by Affymetrix, which is currently collecting data for a planned submission of its CytoScan HD offering for the detection of constitutional abnormalities to the US Food and Drug Administration by year end.

In addition, Jessup said that CombiMatrix recently signed a contract with a "large prenatal customer" that "alone could increase our prenatal run rate by 20 to 50 percent in the coming year." He did not name the customer but said on a conference call after the release of the results that it's a large hospital in the US and "may be in the top 10" in terms of prenatal genetic testing volumes.

During the quarter, R&D costs rose 5 percent to $342,000 from $321,000 in Q2 2011. Its SG&A spending rose 10 percent to $2.2 million from $2 million in the year-ago period.

The company said that in May it implemented cost reduction measures, "including the restructuring of the sales force and headcount reduction" to decrease its expenses. CombiMatrix said that those will result in savings of almost $300,000 per quarter in the future.

The firm's net loss in Q2 was $2 million, or $0.19 per share, compared to $1.9 million, or $0.18 per share, a year ago.

The company finished the quarter with cash and cash equivalents of $3.2 million.

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