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CombiMatrix Q4 Revenues Rise 21 Percent on Higher Miscarriage, Fertility Test Volume

NEW YORK (GenomeWeb) – CombiMatrix reported after the close of the market Wednesday that its fourth quarter revenues rose 21 percent, driven by increases in the company's reproductive testing, particularly in miscarriage analysis and preimplantation genetic screening.

The firm reported total revenues of $2.7 million for the three months ended Dec. 31, 2015, up from $2.2 million for the fourth quarter of 2014. The firm said that diagnostics services provided $2.65 million of the revenue, mostly made up of array-based testing in the reproductive health setting, while another $35,000 came from royalties.

The company said that it saw record revenue and test volume in its miscarriage and in vitro fertilization tests during the quarter, though both revenue and test volume for its prenatal array testing dropped slightly compared to Q4 2014.

Sales for its prenatal tests, which McDonough said are largely offered through a partnership with Sequenom, fell year over year, the firm reported, with revenue of $293,000 for Q4 2015 compared to $364,000 for the prior year's fourth quarter. However, miscarriage testing revenue rose to roughly $1.4 million from $1.1 million. The company also brought in $222,000 during the quarter from its CombiPGS IVF test, which it launched in late 2014.

The combined revenue for CombiMatrix's full suite of reproductive health testing, which includes prenatal testing, miscarriage analysis, and CombiPGS fertility testing, was about $1.9 million, a 33 percent increase from $1.4 million in the year-ago quarter.

Overall, the company's reproductive testing volume rose 22 percent to 1,369 tests from 1,126 in Q4 2014.

According to Mark McDonough, CombiMatrix's president and CEO, the company also benefitted during the quarter from gains in its customer base, which rose 7 percent to 243 quarterly billable customers. The company also said it added 9 million covered lives from three new commercial payor contracts during Q4.

"In January, we secured a contract with Blue Cross Blue Shield of Alabama at a very fair reimbursement rate. This plan includes 3 million covered lives, bringing our total contracted covered lives count to more than 177 million nationwide," McDonough said during a conference call discussing the company's earnings.

In addition, he said, two other health plans in the Blue Cross Blue Shield system expanded their coverage during the quarter to include CombiMatrix's recurrent pregnancy loss, or miscarriage testing.

"There is a growing body of clinical evidence to support the use of chromosomal microarray analysis for women who have suffered multiple miscarriages. We believe the healthcare community is increasingly recognizing the importance of helping women and their families understand the factors behind this highly emotional occurrence," McDonough said.

Last month, Trilochan Sahoo, CombiMatrix's VP of clinical affairs, presented data at the World Congress on Recurrent Pregnancy Loss in France from a study of several thousand products-of-conception samples collected over a 44-month period.

Of the samples tested by the company, 91 percent showed valuable results. We believe this is a significant improvement over karyotyping, which may fail to produce results in 20 percent to 40 percent of cases.

During the call, McDonough said that CombiMatrix has also upgraded the technology for its miscarriage test, migrating to the Illumina HumanCytoSNP-12 platform, which he said is expected to reduce the company's testing costs in this area by approximately $60 per test.

In addition to upgrading its miscarriage testing, CombiMatrix also launched a new array-based test for stillbirth, or intrauterine fetal demise, during the quarter.

"Our expansion into the intrauterine fetal demise market is a natural expansion of our genetic test offering for miscarriage analysis. It also allows us to leverage our established relationships with hospital systems, Ob/Gyn's, maternal fetal medicine specialists, and pathology laboratories," McDonough said.

CombiMatrix's net loss for the quarter rose slightly to $1.7 million, or $2.02 per share, from $1.6 million, or $2.19 per share, in Q4 2014.

The firm's R&D spending in the quarter dropped to $114,000 from $139,000, while its SG&A expenses rose about 8 percent to $2.6 million from $2.4 million.

For full-year 2015, CombiMatrix reported total revenues of $10.1 million, including $9.9 million in total diagnostic revenue and $147,000 in royalties, up from $8 million in total revenues the previous year.

Sales of its suite of reproductive health tests rose to $6.7 million from about $5.1 million in 2014. The company's prenatal tests brought in $1.5 million, a 15 percent increase over $1.3 million in 2014. Meanwhile, revenue from miscarriage testing rose almost 30 percent to $4.8 million from $3.7 million the previous year. The company also made $410,000 over the full year from its CombiPGS fertility test.

The company's net loss for the year was $7.7 million, or $9.22 per share, compared to a loss of $8.7 million, or $11.84 per share, for fiscal year 2014.

CombiMatrix's R&D expenses for the year dropped to $466,000 from $725,000 due to its increased commercial focus in 2015, while its SG&A spending fell to $10.5 million from $11.5 million the prior year.

The company finished the quarter with $3.9 million in cash, cash equivalents, and short-term investments.

In Thursday morning trade on the Nasdaq, shares of CombiMatrix were down around 8 percent at $5.40.

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