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GeneNews' Q4 Revenues Drop Sharply

By a GenomeWeb Staff Reporter

NEW YORK (GenomeWeb News) – Canadian molecular diagnostics firm GeneNews reported after the close of the market on Friday that revenues for the fourth quarter dropped to C$4,000 (US$4,101) for the three months ended Dec.31, 2010, down from C$410,000 a year ago.

The decline was due to lower revenue from milestone and non-refundable license fees, which plummeted to $C$1,643 from C$398,325, as GeneNews completed all of its historic research agreements.

The Toronto-based company reported a gain of C$13,000 during the quarter due to the reversal of previously accrued costs for its R&D, it said in its regulatory filing. Its SG&A costs rose 55 percent to C$421,000 from C$271,000.

For the quarter, GeneNews' net loss rose 123 percent to C$1 million, or C$.01 per share, from C$464,000, or break-even, a year ago.

For full-year 2010, the firm's revenues fell to C$194,000 from C$1.1 million in 2009 with revenues from its ColonSentry test cut by more than two-thirds to C$15,263 from C$50,200 a year ago. In its filing, GeneNews said that it anticipates sales of the colon cancer test to "remain modest" for at least 12 months after the test is cleared for sale by the New York State Department of Health.

Enzo Clinical Labs is seeking approval from New York as part of a partnership between the firms announced in late 2009.

GeneNews said that sales of ColonSentry will also be constrained as it waits for the pilot sales program in Canada through its partner Gama Dynacare to become operational; its Chinese partner GeneDiagnostics, to initiate sales there; and its Malaysian partner, GeneNews Diagnostic, to ramp up its operations through a seed capital grant of C$600,000.

In a statement, Heiner Dreismann, interim CEO and lead director of GeneNews, said that ColonSentry is expected to launch in the US, China, and Malaysia this year.

"Our efforts will remain focused on further broadening the global commercial footprint of ColonSentry and to engage with potential strategic partners to establish our technology platform as an industry standard," Dreismann said.

The firm's R&D expenses for 2010 fell to C$1.4 million from C$2.3 million, a 39 percent decline. Its SG&A costs shrank 20 percent to $C1.6 million from C$2 million.

GeneNews' net loss for the year was C$4.8 million, or C$.07 per share, down 14 percent from a loss of C$5.6 million, or C$.09 per share, a year ago.

As of Dec. 31, GeneNews said it had about C$2 million in unrestricted cash and cash equivalents, cash held in trust, and short-term investments.

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