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Exiqon Q1 Sales Climb 29 Percent on miRNA qPCR, Array Adoption

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This story has been updated to include comment from Exiqon officials.

By Justin Petrone

Exiqon said last week that first-quarter revenues increased 29 percent year over year, while net loss narrowed by more than half.

The firm brought in revenues of DKK 20.7 million ($3.4 million) for the three months ended March 31, compared to DKK 16 million for Q1 2009. Net loss fell to DKK 11.1 million from DKK 25.4 million year over year.

The company attributed its Q1 performance to "strong growth" in demand for its quantitative PCR products, as well as the launch of new array products during the quarter.

Exiqon breaks its business into two segments: life sciences and diagnostics. In the first quarter of 2010, Exiqon Life Sciences' research product sales, including its pharma services, increased 29 percent to DKK 17 million from DKK 13.2 million.

The Vedbaek, Denmark-based firm said that organic growth for its life science research products was actually 45 percent, when excluding original equipment manufacturing sales and one-time reagent sales associated with license agreements.

Exiqon's diagnostics business saw revenue increase to DKK 2.6 million during the quarter. The firm posted no revenues in its diagnostics segment last year. All diagnostics revenues were attributable to awarded grants, the company said.

In life sciences, Exiqon said that its qPCR tools drove up sales during the quarter. In October 2009, the company rolled out its miRcury LNA Universal RT microRNA PCR system and Ready-to-Use qPCR panels for microRNA expression profiling. The company said it plans additional qPCR product launches later this year.

These launches will include miRNA assays for rodents and "improved" assays for human miRNAs, according to Hans Henrik Chrois Christensen, the firm's chief financial officer.

Christensen told BioArray News this week that high-throughput customers have also requested a "pick and mix solution" where the customers can "configure their own microtiter plates." Exiqon will introduce such an offering later this year, he said. Finally, a software package optimized for Exiqon's qPCR reagents will be offered to its customers, he added.

Additionally, during the quarter, Exiqon launched the fifth generation of its miRcury microarray platform. The new chip contains all miRNAs listed in the latest miRBase 14.0 update in human, mouse, and rat. The company also published a protocol for single-color microarray experiments that enables its customers to "work with even less sample material than before, and to compare between different miRNA profiling studies and conduct studies over a long period of time."

"Our array product line continues to be very popular,' said Christensen. "With the recent launch of our fifth generation arrays as well as a software package we have strengthened our offering," he said. "We see however that customers are moving from arrays to the new qPCR panels we are offering as this allows for very sensitive analysis."

Christensen said that the release of any new array products this year will be "highly dependent" on coming miRBase upgrades. "We carefully evaluate the changes in the miRBase and will update our arrays if significant changes occur," he said.

Rounding out its miRNA research product line is its miRcury LNA miRNA inhibitors, also launched during the quarter. According to Exiqon, the inhibitors are useful for studying miRNA function.

Geographically, Exiqon made modest gains in the US and Canada, as well as other countries outside its European home market. Sales to North American customers composed 38 percent of Exiqon's total revenues in Q1, up from 34 percent in the first quarter of last year. Sales to countries outside of Europe and North America were 11 percent of total revenues, compared to 8 percent of Q1 '09 sales. Christensen said that Asia, especially China and Japan, are outperforming other markets in terms of growth.

Revenue composition was relatively static. Product sales, including pharma services, continue to make up the bulk of Exiqon's business. Sales of the firm's products were 82 percent of all revenues in Q1, the same as during the year-ago period. Licensing income dropped to 4 percent of total revenues during the quarter from 11 percent of sales in the prior year period. Contract research, though, doubled as a percentage of revenues during Q1. Exiqon said that 14 percent of revenues were attributable to contract research in the first quarter, compared to 7 percent in Q1 2009.

In its diagnostics business, Exiqon said that it expects to conclude discussions on the sale of its Tustin, Calif.-based diagnostics lab before the end of the current quarter. The firm announced in December that it would divest the lab to "gain operational and infrastructural efficiencies and to free up human financial resources" (BAN 12/22/2009).

The decision to divest the US Clinical Laboratory Improvement Acts-compliant lab, which previously operated as Oncotech, was part of a restructuring effort within the company last year that saw Exiqon outsource the manufacturing for its array products, among other miRNA research tools (BAN 9/1/2009).

"The process of divesting Oncotech … is ongoing," Exiqon said in a statement. The company is "exploring available options for securing an optimum financial position" in case its plans for divesting Oncotech must be revised, it said.

Exiqon is seeking partners to co-develop and commercialize its miRNA-based diagnostic products. The company has ongoing diagnostic-development programs for colon cancer recurrence, identification of cancer of unknown primary, and early detection of colon cancer in serum. The firm had hoped to make the kits available through Oncotech, which it paid $45 million to acquire in 2007 (BAN 11/27/2007).

Looking forward, Exiqon said that it expects total 2010 revenue to be between DKK 80 million and DKK 90 million, excluding discontinued operations, roughly in line with its 2009 performance.

Net loss for the year is expected to be approximately DKK 40 million including non-cash costs of current incentive programs and depreciations expensed in the amount of DKK 15 million. Exiqon posted a net loss of DKK 338 million in 2009, largely attributable to the discontinuation of its Oncotech operations.

The company said it expects continued organic growth in life science product sales including pharma services to be approximately 25 percent this year, roughly double last year's growth. It said that the success of its research product sales "depends on a continued positive development in the company's markets, and more specifically relies on the continued success" of its qPCR series.

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