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Transgenomic to Reduce Headcount as Q3 Revenues Drop 12 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Transgenomic announced on Monday afternoon a consolidation of its R&D activities and a reduction in headcount as net sales for the third quarter fell 12 percent.

For the three months ended Sept. 30, the Omaha, Neb.-based company said sales shrank to $4.4 million, compared to $5.0 million in the year-ago period.

Transgenomic President and CEO Craig Tuttle said in a statement that the firm made "enormous strides" in moving its proprietary technologies forward in the quarter "while at the same time taking measures to align our physical footprint to better match our business operations. However, we did have some disappointments during the quarter, particularly with instrument sales."

He did not elaborate, but said that Transgenomic continues to "rightsize our operational footprint" by consolidating its R&D activities in Omaha. It also is reducing headcount by an unspecified amount and eliminating an undisclosed number of open positions.

"Although there will be some one-time costs for these measures, these actions are expected to allow us to be cash positive in 2011," Tuttle said.

According to Tuttle, Transgenomic's pharmacogenomics sales grew 28 percent year over year, and the pipeline of proposals submitted to drug firms was $7 million as of the end of the quarter, up from $6 million at the end of the second quarter, and $2 million at the end of the first quarter.

Existing signed contracts have about $1.7 million of potential net sales remaining, he added. Last week, the firm announced it had been awarded about $1.1 million from the US government under the Patient Protection and Affordable Care Act.

The firm's R&D costs for the quarter decreased to $613,000, a 35 percent drop-off from $938,000 in the third quarter of 2009, and its SG&A costs shrank about 3 percent to slightly less than $2.2 million from more than $2.2 million a year ago.

Transgenomic's Q3 net loss increased 145 percent to $898,000, or $0.02 per share, from $366,000, or $0.01 per share, a year ago.

As of the end of the third quarter, Transgenomic had $4.6 million in cash and cash equivalents.

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