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Prenatal Array Testing Pushes CombiMatrix Q3 Revenues up 40 Percent

NEW YORK (GenomeWeb) – CombiMatrix said after the close of the market on Tuesday that its third quarter revenues were up 40 percent year over year as its array testing revenues increased about 29 percent.

For the three months ended Sept. 30, the Irvine, Calif.-based firm took in $2.1 million in total revenues, up from $1.5 million a year ago. CombiMatrix reported $1.8 million in revenues from array-based tests, compared to $1.4 million a year ago, while non-array-based tests brought in $174,000 in revenues, up from $87,000 a year ago. The remaining revenues comprised $51,000 in royalties in Q3 2014, compared to $35,000 in Q3 2013.

In early October, the company said that billable prenatal testing volume for the third quarter was anticipated to be up 71 percent year over year. Today, CombiMatrix confirmed the results, saying it had performed 925 prenatal microarray tests in the quarter, up from 541 in the year-ago period.

Total array volumes increased 24 percent year over year 1,420 in the recently completed quarter from 1,145 a year ago, and non-array tests volumes grew 84 percent to 539 from 293 a year ago. Total Testing volume was up 36 percent to 1,959 in Q3 2014 from 1,438 in Q3 2013, CombiMatrix said.

"Once again, our team's focus resulted in record microarray testing volumes and revenues in our core service offerings," CombiMatrix President and CEO Mark McDonough said in a statement. During the quarter Stratose and Blue Cross Blue Shield of Illinois began covering the company's tests and services, while New York granted conditional approval to the firm to market its CombiSNP chromosomal microarray analysis test for pediatric development disorders.

"Investment will continue in these areas and in our partnerships as we continue [to] focus on increasing volumes from existing customers as well as adding new customers in key geographic markets," McDonough said.

CombiMatrix is involved in a lawsuit filed by a former employee who has alleged that the firm submitted false and fraudulent insurance claims to the National Union Fire Insurance Company. In 2010 CombiMatrix received $25 million from the insurer to settle the lawsuit.

In Q3 2014, it spent $746,000 in litigation expenses related to the current lawsuit, CombiMatrix CFO Scott Burell said on a conference call following the release of the financial results. McDonough added that the evidence portion of the trial ended in late August, and both parties have submitted their summation briefs and responses to the other party's briefs to the Superior Court of California County of Orange, which is now reviewing the evidence in advance of a decision.

The company's net loss for the quarter was $2.5 million, or $.23 per share, compared to a net loss of $1.4 million, or $.30 per share, in Q3 2013. CombiMatrix used about 11.1 million shares to calculate its loss on a per-share basis for the recently completed quarter, compared to 4.5 million shares in the year-ago period. Last December, the firm closed on a public offering of 12,000 units of Series D convertible preferred stock and warrants, raising $12 million in gross proceeds.

Its R&D costs were down 8 percent year over year to $228,000 from $247,000, while its SG&A costs rose 80 percent to $3.2 million from $1.8 million a year ago.

CombiMatrix finished the third quarter with $7.4 million in cash, cash equivalents, and short-term investments.

"It's an exciting time at CombiMatrix and we're all working hard to ensure we continue the pace of progress to build CombiMatrix into a dominant position in microarray testing services for the prenatal and pediatric markets," McDonough said on the call.