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On Flat Q3 Sales, Combimatrix Continues to Explore Strategies

NEW YORK (GenomeWeb News) – CombiMatrix reported after the close of the market on Wednesday that its third-quarter revenues slipped around 4 percent year over year, with the decline coming mainly from soft government contracts and product sales.

CombiMatrix brought in total revenues of $970,000 for the three-month period ended Sept. 30, compared to $1 million in the year-ago period.

Revenues for the Mukilteo, Wash.-based company from government contracts fell to $133,000 from $343,000, while revenues from products sales rose to $250,000 from $158,000.

The firm's service revenues rose to $524,000 compared to $448,000 the year before.

Combimatrix reduced its net loss for the quarter by about 21 percent to $3.3 million, or $.44 per share, compared to a net loss of $4.2 million, or $.70 per share, for the third quarter of 2008.

The company's R&D spending rose about 5 percent to $1.4 million from $1.3 million, and its SG&A spending was roughly even with the same period last year at $2.3 million. CombiMatrix reported $7.9 million in cash, cash equivalents, and short-term investments as of the end of the quarter.

Combimatrix also saw its diagnostic lab sales increase 30 percent year over year, due primarily to expanded sales and marketing efforts as well as a larger suite of diagnostic test offerings in Q3 2009 than in the same period last year.

"While economic difficulties and other factors have slowed our diagnostics growth over the last two quarters, we feel that the third quarter of 2009 was the bottom," CEO and President Amit Kumar said in a statement.

The company also reiterated that it is pursuing potential strategic options with advice from financial advisers RW Baird, which it first announced in September.

Kumar said that the firm has contacted a number of undisclosed companies about options.

"These companies do not fit a single mold – they include both large cap companies and companies in the middle market, as well as financial organizations that have expressed an interest in getting into this space and are seeking a platform," Kumar said. "Some companies appear interested in acquiring our whole company, while others seen interested in components that are a strategic fit for them."

Kumar added that any offers will be evaluated, but held out no assurance that there will be offers or that any would be accepted.