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CombiMatrix Posts 36 Percent Increase in Q1 Revenues

NEW YORK (GenomeWeb News) – CombiMatrix today reported a 36 percent year-over year-increase in first-quarter revenues.

Total revenues rose to $1.2 million from $913,000 a year ago as the Irvine, Calif.-based company performed 1,377 billable diagnostic tests for 105 customers in the quarter, compared to 958 tests for 86 customers a year ago.

The company said that growth was driven by its developmental testing, including pediatric and prenatal tests, resulting partly from a nationwide National Institutes of Health-sponsored study in which its author recommended that prenatal chromosomal microarray testing replace traditional karyotyping as the preferred standard of care for prenatal testing.

The study's author, Ronald Wapner, joined CombiMatrix's scientific advisory board last month.

The firm's R&D costs increased 33 percent to $450,000 year over year from $339,000, and its SG&A costs rose 26 percent to $2.4 million from $1.9 million a year ago as headcount increased, as did recruiting costs associated with the new company directors and a chief medical officer.

CombiMatrix's net loss for the first quarter was $2.4 million, or $.22 per share, compared to a net loss of $2 million, or $.26 per share, a year ago.

It finished the first quarter with $4.7 million in cash and cash equivalents.

In a conference call following the release of its earnings results, company President and CEO Judd Jessup said the first quarter was "solid overall … and we continue to see a growing number of opportunities for our testing services.

"We remain optimistic that we will continue to grow our business throughout the year," he said.

CombiMatrix is changing its market focus moving ahead, however, and while it will continue to build on its success in the prenatal and pediatric markets, in oncology, the company plans to direct its attention almost exclusively to its laboratory partnerships. Its own oncology efforts will be reduced.

"While we've made progress with lab partnerships, we've been less successful breaking into the broader pathology and oncology customer bases," Jessup said. As the company monitors and adjusts its strategy, "based on its limited resources, we've determined that we will de-focus that part of the business. Associated with that decision and in other parts of the organization, we are implementing a number of changes to control our expenses, lower our break-even point, and make sure that our resources and capital are deployed in a cost-effective manner."

The firm had been developing certain cancer assays, but as a result of the shift in focus, "we are not planning on moving forward with those," Jessup said, adding that many laboratories were already offering tests for the cancers that CombiMatrix's assays were targeting.

In early Friday trade on the Nasdaq, shares of CombiMatrix fell 2 percent to $1.00.

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