Skip to main content
Premium Trial:

Request an Annual Quote

Transgenomic's Q4 Revenues Slip 15 Percent on Weaker Diagnostic Tools Sales

NEW YORK (GenomeWeb News) – Transgenomic reported after the close of the market on Wednesday a 15 percent year over year drop in fourth-quarter revenues, driven primarily by a decline in its diagnostic tools segment.

The company also announced a new $8.0 million credit facility.

The Omaha, Neb.-based firm reported revenues of $7.3 million for the quarter, down from $8.6 million a year ago. The company said that a decrease in diagnostic tools revenues, reflecting a decline in original equipment manufacturing instrument sales, was largely responsible for the drop-off. Clinical laboratories sales were "modestly below a strong prior year quarter," Transgenomic added, while pharmacogenomics services saw "strong" revenue growth. The company did not elaborate.

On a conference call after the release of the company's earnings results, Transgenomic CFO Mark Colonnese said the decline in diagnostic tools was "largely in instruments." Like the pharmacogenomics segment, diagnostic tools is "kind of a lumpy business and as we sold less instruments like we did this quarter it affects the whole segment," he said.

In addition to a decline in OEM instrument sales, revenues from the company's Wave systems were down. The systems use denaturing high-performance liquid chromatography and Transgenomic's DNASep cartridges for detecting known and unknown mutations and single nucleotide polymorphisms.

The number of Wave systems sold was even year over year, but, Colonnese said, "we sold them at lower prices because they were going to our distributors."

The firm posted a net loss of $2.3 million, or $.03 per share, compared to a profit of $264,000, or breakeven on a per-share basis, a year ago.

Its R&D spending rose 9 percent to $620,000 from $568,000 a year ago, while SG&A costs increased 27 percent to $6.2 million from $4.9 million.

Full-year 2012 revenues slid 2 percent to $31.5 million from $32.0 million a year ago, Transgenomic said. While clinical laboratory sales were up 9 percent — driven by its recently launched NuclearMitome, C-GAAP, and ScoliScore tests — pharmacogenomics services were down, resulting from a fewer volume of projects performed by the company's pharmaceutical clients.

The company added that the diagnostic tools segment was also down from a year ago as a higher percentage of sales went to Transgenomic's European distribution partner at distributor prices.

During the call, company officials talked up the potential of the ScoliScore test acquired during the summer from Axial Biotech. Responding to a question from an analyst, Transgenomic President and CEO Craig Tuttle suggested that Transgenomic may be exploring taking the test direct-to-consumer.

"We absolutely believe that this is an assay that would benefit best from a direct-to-consumer message, in this case, a direct-to-family message, because it will be the parents [who] will respond to the risk to their children for having all these X-rays taken," Tuttle said.

ScolioScore uses saliva to test for multiple genes that provide an assessment of the likelihood of spinal curve progression for children diagnosed with Adolescent Idiopathic Scoliosis.

The company narrowed its net loss in 2012 to $8.3 million, or $.13 per share, from a net loss of $9.8 million, or $.22 per share, in 2011.

Its R&D spending climbed to $2.5 million, a 14 percent increase from $2.2 million in 2011, while its SG&A spending increased 15 percent to $22.0 million from $19.2 million.

Transgenomic ended 2012 with $4.5 million in cash and cash equivalents.

Separately, the company said today it has secured an $8.0 million term and revolving credit facility from Third Security Senior Staff 2008, Third Security Staff 2010, and Third Security Incentive 2010, which are all affiliated with life science investment firm Third Security.

Transgenomic plans to use proceeds from the facility to refinance its outstanding debt with Forest Laboratories and to fund working capital requirements.

The credit facility comprises a $4.0 million term loan and a revolving credit line of up to $4.0 million.

The credit facility follows a January private placement, which brought in $8.3 million for Transgenomic.

The Scan

Alzheimer's Risk Gene Among Women

CNN reports that researchers have found that variants in MGMT contribute to Alzheimer's disease risk among women but not men.

Still Hanging Around

The Guardian writes that persistent pockets of SARS-CoV-2 in the body could contribute to long COVID.

Through a Little Spit

Enteric viruses like norovirus may also be transmitted through saliva, not just the fecal-oral route, according to New Scientist.

Nature Papers Present Method to Detect Full Transcriptome, Viruses Infecting Asgard Archaea, More

In Nature this week: VASA-seq approach to detect full transcriptome, analysis of viruses infecting Asgard archaea, and more.