NEW YORK (GenomeWeb News) – Decode Genetics reported after the close of the market Monday that its second-quarter revenues fell 61 percent, but it cut its net loss 28 percent on lower spending.
The Reykjavik, Iceland-based genetic test developer also cautioned in a statement accompanying the results that it has sufficient cash resources to fund its operations only into the second half of its third quarter.
Decode brought in total revenues of $3.5 million for the quarter compared to $9 million for the second quarter of 2008. It said that the decrease was due to lower contract service revenues. However, the firm also noted that as of the end of the quarter it had $21.3 million in deferred revenue, to be recognized over future reporting periods, including an upfront payment from Celera as part of an alliance signed in April.
Decode slashed its net loss for the quarter to $13.2 million, or $.21 per share, from $18.4 million, or $.30 per share. The decline was due to lower R&D and SG&A outlays.
Decode spent $2.8 million on R&D during the quarter, down sharply from $8 million in the second quarter of 2008. Its SG&A spending also dropped to $4.3 million from $5.9 million year over year.
The firm finished the quarter with $3.8 million in cash and cash equivalents.
With its cash dwindling, Decode said that is continuing its efforts to seek options for its business, including selling some or all of its US medicinal chemistry and structural biology units.
"The goal of our strategic review is to recast Decode as a diagnostics company positioned to lead in this growing new market," Decode CEO Kari Stefansson said in a statement. "Over the past quarter we have made our gene discovery engine more efficient, and shown that it continues to be second to none in delivering the content required to create effective genetic risk tests for common diseases. We are also advancing our strategic negotiations on several fronts, including the sale of our US medicinal chemistry and structural biology units; finding buyers or licensing partners to take forward our therapeutics programs; additional licensing deals for our intellectual property and diagnostic tests; and securing new equity financing."
In early Tuesday trade on the Nasdaq, Decode's shares were down 14 percent at $.62 per share.