This story was originally posted on May 13.
"Continued customer acceptance" and an overhaul of its sales and marketing efforts contributed to a double-digit rise in first-quarter sales for CombiMatrix, the company reported this week.
The firm saw total revenues for the three months ended March 31 rise 11 percent to $913,000 from $820,000 in the first quarter of 2010. CFO Scott Burrell attributed the spike in sales to "continued customer acceptance and increased market penetrance from our sales and marketing efforts for our suite of tests."
Burrell made his comments during an earnings call this week. In the same call, CEO Judd Jessup discussed CombiMatrix's sales and marketing efforts, noting that the firm hired three new sales representatives during the quarter.
"All of our new reps are experienced and come from our competitors, including Signature Genomics, Genzyme, and NeoGenomics," said Jessup.
The expansion follows the appointment of new sales and marketing management at the firm. Daniel Forche joined as senior vice president of sales and marketing in October after holding a similar position at Dutch molecular diagnostics firm Agendia, and Courtney Tate last month joined CombiMatrix as marketing director from rival GenMark Diagnostics, where she was senior marketing manager (BAN 3/1/2011).
The new sales efforts have apparently been successful. Revenue for array-based diagnostic services grew 18 percent to $913,000 from $772,000 in Q1 2010. CombiMatrix's Q1 sales were composed exclusively of testing services delivered via the company's CombiMatrix Diagnostics subsidiary, while total revenue in the year-ago period included $48,000 in array-CGH product sales, largely to a customer in Asia that has since stopped using the firm's arrays (BAN 11/16/2010).
Burrell said that CombiMatrix processed 958 billable tests in Q1, up from 627 in the first quarter of 2010, a 53 percent increase.
Since its establishment in 2005, CombiMatrix Diagnostics has gradually built up a menu of array-based tests. The firm offers BAC and oligo-based HDScan tests that identify congenital chromosomal abnormalities; a prenatal screen that assays amniotic fluid to identify genetic disorders in utero, and its ATScan test, which identifies copy-number variants associated with autism spectrum disorder. The company also began offering traditional karyotyping for prenatal samples last quarter.
On the oncology side, the company offers its HemeScan test, which predicts the probable outcome of chronic lymphocytic leukemia at the time of diagnosis; its HERScan test for HER2 analysis in breast cancer patients; and an array-based, post-prostatectomy prostate cancer-stratification assay. CombiMatrix intends to soon launch its DNAarray Oligo 180K Heme Profile test, an array-based cancer diagnostic that contains "thorough coverage of all the key oncogenes and cancer-related chromosomal regions" and contains content endorsed by the Cancer Cytogenomics Microarray Consortium (BAN 4/12/2011).
Last month, CombiMatrix expanded an agreement with Clarient, a GE unit that provides molecular-diagnostics services to pathologists and oncologists. Under the terms of the deal, Clarient, also based in Irvine, has exclusive rights to sell CombiMatrix's oncology-related tests to commercial labs "based on certain minimum levels of sales" (BAN 4/12/2011).
"I can't overstate the importance of this relationship, especially for a company in our stage of development," Jessup said this week of the Clarient deal.
Jessup added that a private stock placement closed last month will give the company "more runway" for executing its sales and marketing strategy. CombiMatrix raised $6.7 million in the placement, which was led by Boston-based venture capital group HLM Venture Partners (BAN 4/5/2011).
As CombiMatrix increased its sales and marketing efforts, it has improved its net loss on a non-GAAP basis and trimmed its operational expenses.
The firm's net loss for the first quarter was $2 million compared to a profit of $15.3 million a year ago, though figures for the first quarter of 2010 include a gain of $19.4 million from the settlement of a lawsuit. Excluding the settlement, the company cut its net loss by half from $4.1 million in the year-ago period.
CombiMatrix cut R&D spending nearly in half to $339,000 during the quarter from $660,000 a year ago, while SG&A costs dropped 5 percent to $1.9 million from $2 million. "The decrease in R&D expenses came as a result of reduced headcount in this area and greater focus on commercialization rather than new product development," said Burrell.
CombiMatrix had $4.9 million in cash and cash equivalents at the end of the quarter.
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