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Affymetrix's Q4 Sales Surge 13 Percent

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Affymetrix reported after the close of the market Wednesday that its fourth-quarter revenues increased 13 percent, driven by a 30 percent increase in sales of its genotyping products.

The Santa Clara, Calif.-based microarray technologies firm reported total revenues of $88.8 million for the three-month period ended Dec. 31, up from $78.6 million for the fourth quarter of 2008. It easily beat analysts' consensus revenue estimate of $82.9 million.

In early Thursday trading on the Nasdaq, shares of Affymetrix jumped 26 percent to $7.15.

The firm's product revenues rose 22 percent to $81 million from $66.6 million year over year.

Affy's service revenues declined 31 percent during the quarter to $5.9 million from $8.5 million. Company officials said this drop was expected and was due to the completion of large genotyping projects for customers such as the University of Oxford and several other NIH genotyping projects.

Affymetrix President and CEO Kevin King said during the firm's conference call Wednesday that the firm's revenue from RNA consumables was up 8 percent "with a good portion of that growth coming from new products for biomarker discovery and products used for biomarker validation." He also noted that DNA consumables revenue rose 30 percent year over year, with increases in sales coming from across product lines including whole-genome association, copy number, custom genotyping, and reagents.

Affy's net income for the quarter was $2.8 million, or $.04 per share, compared to a net loss of $318.7 million, or $4.65 per share, the company took for the fourth quarter of 2008, when it recognized a $239.1 million charge for impairment of goodwill. Analysts, on average, had predicted a net loss of $.10 per share.

The firm's R&D spending dropped to $17 million from $25.4 million for the quarter, while its SG&A for the quarter was nearly flat at $34.5 million.

During the fourth quarter, Affy launched its Axiom genotyping offering, which enables customers to build their own targeted and whole-genome genotyping assays using an internally developed database.

For full-year of 2009, Affy reported revenues of $327.1 million, down 20 percent from $410.3 million for the year before. However, the full-year number also beat analysts' average estimate of $321.1 million.

Affy's product revenues for the year increased 3 percent to $279.2 million from $270.4 million. Its service revenues increased 23 percent to $39.6 million, compared with $32.1 million in 2008.

Affy's full year net loss was $23.9 million, or $.35 per share, compared to a net loss of $307.9 million, or $4.49 per share, for 2008.

Its R&D spending fell roughly 8 percent to $77.4 million from $84.5 million year over year, while its SG&A expenses rose around 3 percent to $130.8 million from $127.1 million.

Affymetrix finished the year with $65.6 million in cash and cash equivalents.

King said that Affy surpassed its goal of placing at least 35 of its GeneTitan Systems in 2009, and it now has around 45 systems installed at customer sites. A sort of lower-throughput version of GeneTitan, called Gene Atlas, began shipping to early access customers during the fourth quarter and will have a fill commercial introduction in Q1 2010, said King.

"Overall, we expect Q1 total revenue will be in line with the prior year quarter at around $78 million," Affy CFO John Batty said during the call. Affy officials also said that they expect product revenues to grow between 8 percent and 10 percent, which will be offset by a roughly 50 percent decline in service revenues.

King said in a statement that the firm expects to "generate improved revenue growth and to be profitable for" 2010.

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