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CombiMatrix Q4 Revenues Spike 18 Percent on Prenatal Array Testing Growth

NEW YORK (GenomeWeb News) – CombiMatrix today said that revenues in the fourth quarter jumped 18 percent year over year as revenues from core prenatal testing markets increased 57 percent.

For the three months ended Dec. 31, 2013, the Irvine, Calif.-based genetic testing laboratory saw revenues increase to $1.8 million from $1.5 million a year ago.

CombiMatrix noted that prenatal testing revenues grew 57 percent year over year in the quarter to $1.0 million from $659,000 a year ago. Revenue growth in prenatal testing was driven by a 74 percent increase in billable test volumes, the company added.

"Granted, these are big percentages increases based on a still modest base, but there is no reason why we can't keep this kind of growth going in 2014 and beyond," said CEO Mark McDonough on a conference call following the release of the results.

CombiMatrix has continued to expand coverage of its services via agreements with national health providers. In recent weeks it closed such deals with FedMed and Galaxy Health Network. In a statement, McDonough said that his company is a "vastly different company from a year ago" with a "sharper focus with millions more patients covered for microarray testing and numerous leading labs and physician groups now on board."

CombiMatrix's diagnostic services revenue increased to $1.7 million from $1.4 million, while royalty revenues fell to $48,000 from $54,000.

CFO Scott Burell said on the call that CombiMatrix had 1,509 billable diagnostic tests from 136 customers in Q4, compared to 1,590 billable tests from 108 customers in the year-ago period. He attributed the firm's revenue growth to continued adoption of prenatal microarray testing, and an increase in the proportion of array tests run compared to the other tests the firm offers, fluorescence in situ hybridization and molecular karyotyping assays.

Because of this shift in text mix, Burell said he would focus on array tests as a metric for the firm's performance. He said that the firm had 1,259 billable microarray tests in the fourth quarter, up 31 percent from 963 array tests billed in the fourth quarter of 2012.

The firm's net loss grew to $1.8 million from a net loss of $1.3 million in the fourth quarter a year ago. CombiMatrix didn't provide its loss per share.

The firm's R&D costs rose 36 percent in Q4 to $404,000 from $297,000, while SG&A costs increased 30 percent to $2.2 million from $1.7 million.

McDonough noted that CombiMatrix's sales team had grown from six people in the third quarter of 2013 to 12 people at the end of the fourth quarter. He said that it is likely that CombiMatrix could have a total of 15 sales personnel in the near future.

The company attributed the rise in operating costs to "one-time executive relocation costs not expected to repeat in future periods," as well as "increased microarray costs from record microarray volumes and higher sales and marketing costs."

For full-year 2013, CombiMatrix's revenues were up 19 percent year over year to $6.4 million from $5.4 million in 2012. Diagnostic service revenues improved to $6.2 million from $5.0 million, while royalty revenues decreased to $163,000 from $180,000.

Burell said that CombiMatrix saw 4,540 billable array tests processed in 2013, compared to 3,624 billable array tests in 2012.

The firm's prenatal test revenues more than doubled in 2013 to $3.6 million from $1.7 million in 2012, the company said.

The company had a net loss of $6.4 million in 2013 compared to a net loss of $6.9 million a year ago. It also didn't report its loss per share for the year in its statement or during its call.

CombiMatrix's R&D expenses declined to $1.0 million from $1.4 million for the year, while its SG&A spending was up slightly to $8.0 million from $7.9 million.

The company finished the year with $14 million in cash and cash equivalents. In December, CombiMatrix closed a public offering of 12,000 units of Series D convertible preferred stock and warrants, raising $12 million in gross proceeds.

In Wednesday afternoon trade on the Nasdaq, shares of CombiMatrix were down around 7 percent at $2.84.