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CombiMatrix Q4 Revenues Rise With Growing Reproductive Test Business

NEW YORK (GenomeWeb) – CombiMatrix reported after the close of the market Wednesday that its fourth quarter revenues rose 32 percent year over year, driven by what it said were record numbers for both reproductive health test volume and revenues, and across-the-board increases in average revenue per test.

CombiMatrix reported total revenues of $3.5 million for the three months ended Dec. 31, 2016, compared to $2.7 million for the fourth quarter of 2015.

The company brought in $438,000 from its prenatal tests compared to $293,000 in Q4 2015, and its miscarriage testing revenue rose to roughly $1.9 million from $1.4 million in the year-ago quarter.

Despite lower test volumes in the IVF testing space compared to Q4 2015, CombiMatrix increased its revenue from its preimplantation genetic screening test CombiPGS, which it transitioned from microarrays to next-gen sequencing in early 2016. PGS revenues were $278,000 during the quarter compared to $222,000 in the previous year's fourth quarter.

The combined revenue for its full suite of reproductive health testing, which includes prenatal testing, miscarriage analysis, and CombiPGS IVF tests, was $2.6 million, a 37 percent increase from $1.9 million in the year-ago quarter. Its reproductive test volume was 1,512 overall, up 10 percent year over year.

Pediatric tests, FISH, and karyotyping provided an additional 1,258 tests and $927,000 in revenue, compared to 1,194 tests and about $771,000 in Q4 2015. The firm also saw $36,000 in royalty revenue during the quarter.

Pediatric tests, FISH, and karyotyping provided an additional 1,258 tests and $927,000 in revenue, compared to 1,194 tests and about $771,000 in Q4 2015. The firm also saw $36,000 in royalty revenue during the quarter.

President and CEO Mark McDonough said during a call discussing CombiMatrix's financial results that the company had its fourth consecutive quarter with record cash collections. At $3.3 million dollars, cash collection made up 94 percent of the company's total quarterly revenue.

"Our ability to consistently collect cash in excess of 90 percent of total revenue is a significant point of differentiation from our diagnostic peers," he said.

In miscarriage testing, the company's largest revenue-producing segment, McDonough said that CombiMatrix's successful growth was buoyed by a tailwind of favorable industry dynamics, as more women seek answers for recurrent pregnancy loss.

Since the beginning of 2016, he said that the firm has tracked favorable policy revisions by 23 health plans to cover miscarriage tests (though not CombiMatrix's test specifically).

Although the preimplantation space is the firm's lowest revenue producer, McDonough said that CombiMatrix believes the PGS market is relatively underserved, and the company plans to make a push to increase its test volume in this area with a refocusing of its sales force this year.

He also said during the call that CombiMatrix has suspended a contract it inked with strategic advisory firm Torreya Partners last year to seek potential mergers and acquisitions or other business development opportunities. However, he said that the company plans to "continue to explore on our own strategic options including a range of potential M&A and business development opportunities."

CombiMatrix's net loss for the quarter shrank dramatically to $558,000, or $.22 per share, from a loss of $1.7 million, or $2.02 per share, in Q4 2015.

The firm's R&D spending in the quarter was about the same year over year at $113,000 compared to $114,000, while its SG&A expenses shrank slightly to $2.5 million from $2.6 million.

For full-year 2015, CombiMatrix reported total revenues of $12.9 million, including $12.7 million in total diagnostic revenue and $173,000 in royalties, up from $10.1 million in total revenues the previous year.

Sales for its full suite of reproductive health tests rose to $9.2 million from about $6.7 million in 2015. More specifically, the company's prenatal tests brought in $1.6 million in 2016 compared to $1.5 million in 2015. Revenue from miscarriage testing increased more than 37 percent to $6.6 million from $4.8 million the previous year. The firm also made $1 million over the full year from its CombiPGS fertility test, more than twice as much as in 2015.

CombiMatrix's net loss for the year was $5.8 million, or $3.27 per share, compared to a loss of $7.7 million, or $9.22 per share, for fiscal year 2015.

McDonough said that this reduction in its loss has moved the company significantly closer to its goal of sustained profitability, and noted that it intends to achieve cash flow break-even status by the fourth quarter of 2017.

Combimatrix's R&D costs were $493,000 in 2016 compared to $466,000 in 2015, and SG&A spending rose to $10.6 million from $10.5 million the prior year.

The company finished the quarter with $3.7 million in cash, cash equivalents, and short-term investments.

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