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CombiMatrix's Q2 Revenues Jump 15 Percent on Prenatal Testing Demand as Loss Narrows

NEW YORK (GenomeWeb News) – CombiMatrix today reported that its second quarter revenues rose 15 percent, driven by 152 percent growth in revenues generated by its prenatal microarray testing services.

For the three months ended June 30, the Irvine, Calif.-based molecular diagnostics company saw revenues climb to $1.5 million from $1.3 million in the second quarter of 2012. Prenatal microarray testing revenues in Q2 rose to $836,000, compared to $331,000 in Q2 2012, and CombiMatrix said it performed a total of 1,485 billable diagnostic tests for 125 customers in Q2, compared to 1,459 tests for 116 customers in the year-ago period.

CEO Mark McDonough in a statement called prenatal microarray testing the "most important and highest margin segment of our business." The firm also offers chromosomal microarray testing for pediatric patients, as well as a menu of oncology tests.

McDonough attributed the firm's growth to the quality of the firm's platform and "favorable coverage decisions at multiple third-party payors. Last month, CombiMatrix announced that Blue Shield of California decided to provide coverage for its diagnostic laboratory services.

He also touted a recent deal with Sequenom that will pair MaterniT21 Plus, Sequenom's sequencing-based, noninvasive prenatal test, with CombiMatrix's chromsomal microarray analysis services into one offering, calling it "evidence of our progress."

The company has also worked to reduce its operating expenses, reducing R&D costs by roughly half to $177,000 in Q2 2013 from $342,000 in the prior-year second quarter. Its SG&A expenses, however, grew 58 percent in the second quarter to $1.9 million from $1.2 million in Q2 2012. McDonough said that the firm continues to build out its commercial team to "take advantage of broadening geographies and the dynamic caused by all of the recent positive clinical trial data supporting microarray testing."

The firm narrowed its net loss to $121,000, or $0.03 per share, from $2 million, or $1.90 per share, in Q2 2012. The decrease was primarily driven by a non-cash, warrant derivative gain of $1.4 million during the quarter.

CombiMatrix held cash and cash equivalents totaling $5.7 million as of June 30.

The firm noted in the statement that it raised $2.4 million during the quarter through a Series C convertible preferred stock financing.

It said that by achieving $5.7 million of stockholders' equity as of June 30, it believes it has satisfied a Nasdaq listing requirement for a minimum of $2.5 million stockholders' equity. In April, Nasdaq gave CombiMatrix until Aug. 20 to comply with the requirement or risk being delisted from the exchange.

Shares of CombiMatrix were down around 8 percent at $3.60 in Wednesday morning trade on the Nasdaq.