NEW YORK (GenomeWeb) – Molecular diagnostics firm Transgenomic today reported a sharp drop of 69 percent in first quarter sales reflecting the phasing of contracts due to client sample availability issues, but said that this effect is expected to be "transitory."
For the three-month period ended March 31, Transgenomics' net sales fell to $236,000 from $750,000 the year before. However, the company said it expects the effect causing the drop to be transitory.
"We see this as a temporary lull in our revenues as the sample volume is expected to pick up in the remainder of the year and as our cancer CLIA testing and ICE-COLD PCR kits sales … begin to ramp up," Transgenomic President and CEO Paul Kinnon said during a conference call with analysts after the release of the results.
The firm's net loss in the quarter narrowed to $3.3 million, or $.16 per share, from $3.4 million, or $.36 per share, a year earlier.
R&D spending in the quarter fell 40 percent to $270,000 from $451,000, while SG&A costs dipped 6 percent to $1.7 million from $1.8 million.
Contributing to the overall decrease in expenses was Transgenomics' move to shutter its New Haven, Connecticut-based patient testing laboratory earlier this year as part of the company's nearly completed refocusing onto ICE-COLD PCR.
Since first acquiring the rights to the technology in 2009, Transgenomic has been steadily shedding its other assets, divesting its Surveyor nuclease technology in 2014, its ion chromatography business in September, and its genetic assays and platforms unit in December.
"Exiting these low-growth, money-losing legacy has … substantially reduced our burn rate," Kinnon noted, adding that suspending operations at the Connecticut lab has "allowed us to reduce the operating expense of the company significantly, resulting in savings of over $1 million a month while enabling us to focus on cancer testing at our CLIA laboratory in Nebraska."
At the end of the first quarter, Transgenomic had $222,000 in cash and cash equivalents.
With its attention entirely on ICE-COLD PCR, Transgenomic is aiming to make the technology as widely available as possible, Kinnon said. "In order to achieve this, we will continue our efforts to strategically partner with sequencing platform companies, life science companies, molecular testing labs, and service providers." The firm expects to close its first major partnership deal, as well as an agreement for the US distribution of ICE-COLD PCR kits, before the end of the second quarter, he added.
During early morning trading on the Nasdaq, shares of Transgenomic were down nearly 10 percent to $.54.