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CombiMatrix Q4 Revenues Climb 52 Percent

NEW YORK (GenomeWeb News) – CombiMatrix today reported that its fourth-quarter revenues rose 52 percent year over year.

For the three months ended Dec. 31, 2011, revenues totaled $1.2 million, compared to $804,000 a year ago as diagnostic services revenues, which comprised all of CombiMatrix's revenues in Q4 2011, increased 55 percent from $791,000 a year ago.

The company performed 1,318 billable diagnostic tests for 103 customers during the fourth quarter, a 45 percent increase from 912 for 89 customers a year ago.

The company posted no product revenues for the most recent quarter compared to $13,000 a year ago. In 2010 the firm restructured its operations, which included shutting down its CustomArray business and refocusing its attention on molecular diagnostics services.

Its R&D costs increased 8 percent year over year to $361,000 from $334,000, while SG&A expenses climbed 17 percent to $2.1 million from $1.8 million a year ago.

The firm's net loss for the quarter was $2.0 million, or $.19 per share, compared to a net loss of $1.5 million, or $.19 per share, in Q4 2010. CombiMatrix said the increase in 2011 was due to a one-time recognition of $489,000 of other income from the qualified therapeutic discovery program received and recognized in the fourth quarter of 2010.

CombiMatrix President and CEO Judd Jessup said in a statement that the commercial traction that started during the summer has accelerated, resulting in "solid" top line growth in the fourth quarter and a larger commercial footprint in the company's key markets of cancer and developmental genetics.

The volume for new tests introduced in the second half of 2011 have increased monthly, he said, and CombiMatrix has added new sales representatives in both of its divisions. "We are committed to maintaining this growth momentum going throughout the coming year and beyond," Jessup said.

He added that a recently announced National Institutes of Health-sponsored study "regarding the superiority of microarrays compared to traditional karyotyping in identifying genetic abnormalities in unborn children will continue to drive the adoption in microarray technology by maternal fetal medicine specialists."

On a conference call following the release of its earnings, Jessup added that the firm plans to grow its test menu by adding EGFR testing capabilities soon. He also said that CombiMatrix will seriously consider adding SNP testing on an oligonucleotide platform as that capability "is going to be important for us to be competitive."

Asked about next-generation sequencing-based tests, he replied that the company is formulating its strategy and is looking at a number of collaborations with outside partners as well as exploring internal development.

"We don't really have any specific plans at this point other than the fact that we know we need to become experts in that technology and participate in it as it becomes clinically accepted," Jessup said.

For full-year 2011, the firm's total revenues came in at $4.6 million, a 28 percent increase from $3.6 million in 2010. The diagnostics services business grew 39 percent year over year to $4.6 million from $3.3 million in 2010.

In 2011 CombiMatrix billed 4,634 tests compared to 3,279 in 2010, a 41 percent increase, CFO Scott Burrell said on the conference call.

The company had a net loss of $7.6 million, or $.77 per share, compared to $13.1 million, or $1.72 per share, a year ago.

CombiMatrix lowered its R&D spending 30 percent to $1.4 million from $2.0 million, while SG&A costs increased 8 percent to $8.3 million from $7.7 million.

In 2010, CombiMatrix had a one-time litigation settlement gain of $19.4 million, partially offset by a goodwill impairment charge of $16.9 million.

The company ended the year with $6.4 million in cash and cash equivalents.

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