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WaferGen Reports 10 Percent Drop in Revenues While Cutting Net Loss in Q1

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This article was originally published on May 16.

WaferGen Biosystems said today that it narrowed its net loss in the first quarter of 2011, although revenues for the quarter fell 10 percent year over year.

The Fremont, Calif.-based genomic analysis firm reported revenues of $351,000 in Q1, a 10 percent decline from the $390,000 it reported in the first quarter of 2010.

WaferGen said that all Q1 2011 revenue was from sales of a combination of one or more of its SmartChip real-time PCR systems, SmartChip consumables, and SmartChip gene expression profiling services. Revenues in the year-ago quarter were due to a combination of sales of SmartChip and SmartSlide, the company's microfluidics-based cell incubation system.

The company narrowed its net loss for the quarter ended March 31 by 15 percent, to $3.9 million, or $0.09 per share, from $4.6 million, or $0.14 per share, in the year-ago period. The company said that net loss was impacted by warrant derivative revaluations. WaferGen reported an unrealized gain of $491,000 on fair value of warrants in Q1 compared to an unrealized loss of $1.9 million for the same quarter in 2010.

"These non-cash gains and losses are attributed to revaluations of outstanding warrants and result primarily from a fluctuation in the company's stock price in the period — a decrease in company stock price results in gains and vice versa," the company said in a statement.

During the quarter, the company's share price fell from $1.25 per share to $1.00 per share. WaferGen shares closed at $0.63 on May 13, the last business day prior to reporting its financial results.

During Q1, WaferGen achieved several business milestones, including the introduction of its SmartChip human microRNA panel V2 (PCR Insider, 3/31/11); and a co-development agreement with NuGen Technologies to develop a simplified sample-prep workflow for SmartChip to allow biomarker discovery, validation, and screening (PCR Insider, 3/24/11).

The company also ramped up sales and marketing around the SmartChip system, which was commercially launched in August (PCR Insider 8/5/10); and pumped more cash into research and development for new SmartChip products and services.

Overall operating expenses for Q1 totaled $4.2 million, compared to $2.8 million in the same period last year. First-quarter operating expenses included $2.1 million in R&D compared to $1.5 million in Q1 2010; $766,000 in sales and marketing compared to $250,000 in Q1 2010; and $1.4 million in general and administrative expenses compared to $1 million in Q1 2010.

WaferGen ended the first quarter of 2011 with $3.3 million in cash and cash equivalents compared to $2.2 million at the end of 2010.

During the quarter, WaferGen also named Timothy Triche and Arul Chinnaiyan to its scientific advisory board (PCR Insider 3/2/11 and 1/18/11).

"We made considerable progress toward implementing our strategy to expand the applicability and thereby the number of genomic research disciplines that can benefit from the high-throughput and transformative SmartChip real-time PCR system in the $10 billion genomics market," Chairman and CEO Alnoor Shivji said in a statement. "We have also added two key industry leaders to the company and have begun to aggressively expand our commercial staff."

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