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Sequenom and Genaissance Pharmaceuticals

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Sequenom Said ‘Price Erosion’ Contributed to 26-Percent Revenue Slide in Third Quarter

Sequenom this week said that competition and “price erosion” contributed to a fall-off in third-quarter revenue.

Product sales in the three months ended Sept. 30 fell 26 percent to $4.8 million from $6.6 million year over year. Total receipts for the period also fell 26 percent, to $5.2 million from $7.2 million one year ago.

Sales of the company’s flagship MassArray system were “below expectations,” Sequenom CFO Steve Zaniboni said in a statement. However, consumables increased 32 percent during the third quarter.

“The main causes of this [decline] are increased competition and price erosion in the ultra high throughput gene discovery market,” Zaniboni said.

He said the company “expect[s] to see an increase in MassArray Compact system installations” as Sequenom “continue[s] to penetrate the molecular medicine market.”

R&D spending for the third quarter fell 34 percent to $4 million from $6 million year over year, Sequenom said.

Net loss narrowed in the quarter to $8.3 million, or $.21 per share, from $8.8 million, or $.22 per share, one year ago.

Sequenom said it had around $43.8 million in cash, equivalents, short-term investments, and restricted cash as of Sept. 30.


Contract Delays Force Genaissance to Cut 2004 Revenue Outlook by 20 Percent

Genaissance Pharmaceuticals lowered by around 20 percent its year-end revenue expectations, to between $20 million and $21 million from $25 million.

Genaissance also said it hopes to issue shares to help pay for the development of vilazodone, a selective serotonin-reuptake inhibitor the company licensed from Merck (see PGx Reporter, 9/30/2004).

The New Haven, Conn.-based pharmacogenomics company said the fall-off is due to a delay of certain anticipated contracts and samples associated with some of these contracts. “Our business is partly influenced by our customers’ drug development timelines that can cause a delay in the timing of revenues,” Kevin Rakin, Genaissance president and CEO, said in a statement. “Overall, we believe we can grow our revenue in 2005 in excess of 20 percent over 2004,” he added.

Recurring operating expenses for the second half of the year will be similar to those in the first half, adjusting for the second-quarter acquisition of Lark and other non-recurring charges, Genaissance said.

Genaissance is diversifying into new markets, particularly agricultural genotyping. In particular, Rakin cited the company’s recent animal-traceability genotyping collaboration with Pyxis Genomics, and its porcine-tracing genotyping.

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