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Transgenomic Reports 3 Percent Drop in Q3 Revenues; Inks Pacts with Amgen, U of Melbourne

NEW YORK (GenomeWeb) — Transgenomic reported today that its third quarter revenues declined 3 percent year over year due to a decrease in sales in both its laboratory services and genetic assays and platform segments.

The company noted, however, that its laboratory services segment achieved sequential revenue growth for the third straight quarter. Further, Transgenomic announced a research pact with Amgen to use its multiplexed ICE COLD-PCR (MX-ICP) technology to detect cancer-associated mutations in plasma samples from oncology patients, as well as a partnership with the University of Melbourne to conduct additional clinical validation studies of MX-ICP in cancer diagnostics.

For the three months ended Sept. 30, Omaha, Neb.-based Transgenomic reported $6.4 million in revenues compared to $6.6 million in Q3 2013. Sales in its laboratory services segment declined 1 percent to just under $4.1 million from just over $4.1 million, which Transgenomic chalked up to a difficult comparison due to an extraordinarily large genetic development services contract in the year-ago period.

Meantime, sales in its genetic assays and platforms segment fell 8 percent to $2.3 million from $2.5 million, solely as a result of the company's divestiture in July of its Surveyor nuclease technology. Excluding this impact, genetic assays and platforms revenues increased year over year due to higher instrument sales, Transgenomic said.

The genetic assays and platforms segment "would have actually shown stronger growth if a couple of large instrument orders hadn't slipped from the third quarter to the fourth quarter," CEO Paul Kinnon noted in a conference call following release of the company's earnings. "These sales have now been booked and should help ensure that we have a strong Q4 for the business."

The two new agreements with Amgen and the University of Melbourne "represent a turning point for the company, and strengthen our position as we prepare to bring [MX-ICP] to the market," Kinnon said. In particular, the Amgen agreement is noteworthy because it is Transgenomic's first commercial agreement with a biopharmaceutical company under a new initiative to provide contract biomarker identification services to biopharma customers.

Transgenomic posted a net loss of $80,000, or $.05 per share in Q3, compared with a net loss of $5.6 million, or $.78 per share, in the year-ago quarter.

The firm's SG& expenses declined 22 percent to $5.6 million from $7.2 million, while its R&D spending was up around 2 percent at $641,000.

Transgenomic finished the quarter with $880,000 in cash and cash equivalents.

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