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Response Biomedical's Q2 Revenues Rise 17 Percent; Heart Assay for New System Fails to Clear FDA

NEW YORK (GenomeWeb News) – Diagnostics firm Response Biomedical today said that revenues for the second quarter rose 17 percent as it trimmed its net loss following a reorganization.

It also disclosed in a document filed with the US Securities and Exchange Commission that its heart failure assay was not cleared by the US Food and Drug Administration for marketing on its Ramp 200 system.

For the three months ended June 30, the Vancouver-based company posted C$2.8 million (US$2.8 million) in revenues, up from C$2.3 million a year ago. Product sales increased to C$2.8 million from C$2.1 million a year ago, though revenues from contract services fell to C$7,125 from C$143,089.

The firm's R&D expenses were cut to C$635,378 from C$1.1 million a year ago, while SG&A costs were trimmed to C$585,908 from C$681,020.

Response Bio's net loss for the quarter was trimmed to C$719,685, or C$.02 per share, from C$1.9 million, or C$.07 per share, a year ago.

The company exited the quarter with about C$2.5 million in cash and cash equivalents.

Last year the company announced it would cut its workforce as part of an effort to refocus the business, and today Response Bio CEO Wayne Kay said the company continues to see the benefits of that effort.

"Our continued focus on profitability and on managing working capital and overall costs has resulted in significantly improved results on a year-over-year and consecutive quarter basis," he said in a statement.

He added that the new focus on its cardiac business has resulted in increased sales volumes and dollars in China, Europe, and the Middle East.

"Significant quarter-to-quarter fluctuation in revenue has been our history and we expect this to continue through the remaining quarters in 2011," Kay said. "The largest factor driving this fluctuation is the timing of the distribution of products to our major China market."

In the spring, Response Bio received clearance from regulators for its Ramp 200 Reader for marketing in China.

In its SEC document, the company also disclosed that in May the US Food and Drug Administration told it that its NTproBNP assay for the diagnosis of heart failure did not receive 510(k) clearance for the Ramp 200 platform.

The assay was cleared for the earlier Ramp instrument in 2008.

Its US distribution partner subsequently told the company that it would no longer be shipping Ramp 200-branded products until 510(k) clearance was obtained.

"In support of our distributor and at the distributor's request, the Company is supplying the 510(k) cleared RAMP reader and associated products to their customers as an interim solution," Response Bio said in its SEC filing, adding the net effect on sales and profits during the second quarter was "immaterial."

In June, the firm said that it received notification from the FDA that the NTproBNP assay does not meet criteria to obtain a waiver under CLIA rules.