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Transgenomic Q1 Revenues Slide 15 Percent

NEW YORK (GenomeWeb News) — Transgenomic said after the close of the market on Wednesday that its first quarter revenues declined 15 percent year over year.

For the three months ended March 31, the Omaha, Neb.-based molecular diagnostics firm logged total revenues of $6.3 million compared to $7.4 million in the prior-year period. Transgenomic attributed this decline primarily to lower sales in its Laboratory Services segment, reflecting higher-than-usual sales in Q1 2013 that had resulted from working down a backlog of Nuclear Mitome tests from 2012.

Laboratory Services sales fell 16 percent to $3.7 million from $4.4 million in the year-ago period, but excluding the aforementioned Nuclear Mitome tests, this segment posted a double-digit percentage increase year over year, Transgenomic said.

Meantime, the company's Genetic Assays and Platforms segment's sales declined 13 percent to $2.6 million from $2.9 million in Q1 2013, as a result of fewer instrument sales in Europe.

SG&A expenses at the company declined 16 percent to $5.3 million from $6.3 million in Q1 2013, while R&D expenses were essentially flat year over year at $745,000. The decrease in operating expenses in Q1 was primarily due to a lower bad debt provision in Q1 2014 as compared to Q1 2013, as well as reductions in the company’s Laboratory Services sales force as it adopted a new channel strategy that relies on partners to market products that have "different customer call points than our core offerings," the company said in a statement.

Transgenomic posted a net loss of $4.2 million, or $.60 per share, in Q1 compared with a net loss of $3.6 million, or $.54 per share, in the same quarter last year.

Transgenomic finished the quarter with $1.7 million in cash and cash equivalents.

During the quarter, the company completed a financing that raised $7 million from affiliates of life sciences investment firm Third Security. The net proceeds of this financing were used to pay down its revolving credit line, which can be redrawn by the company, as well as for working capital and other general corporate purposes.

Transgenomic, which currently trades over the counter under the ticker symbol TBIO, also said earlier this week that effective May 9 its shares will begin trading on the Nasdaq Capital Market under the same ticker symbol.

"We are heading into the remainder of the year fortified with an infusion of new capital and with the heightened visibility that will be afforded by our return to the Nasdaq Capital Market," CEO Paul Kinnon said in a statement. "We are aware that our strategic transition is still at an early stage and that excellence in implementation will be key to our success. However, we are encouraged at the progress to date and excited about Transgenomic’s many growth opportunities, especially ICE COLD-PCR and its potential to improve patient outcomes."

In a conference call recapping the company's earnings, Kinnon added that the company expects "to build a broad portfolio of … commercial relationships and business deals with a variety of pharmaceutical and biotechnology companies," and that it "expects our ICE COLD-PCR technology to play a key role in our evolving personalized medicine strategy. ICE COLD-PCR is proprietary technology that enables the detection of hundreds of both known and unknown mutants at very high sensitivity from a single sample using non-allele-specific technology. Importantly, it's a key enabling technology for the practical implementation of targeted therapy and personalized medicine."