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WaferGen's Q2 Revenues Drop 10-Fold Due to Dearth of SmartChip Sales

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WaferGen Biosystems this week reported a nearly 10-fold year-over-year decline in second-quarter revenues due to an "absence of sales" of its SmartChip real-time PCR platform.

For the three months ended June 30, WaferGen logged revenues of just under $45,000 compared to around $432,000 in Q2 2010. The company also cited a decrease in sales of its SmartChip assay panels and fee-based profiling services.

WaferGen posted a net loss of $9.2 million in the quarter compared to a profit of $724,000 a year ago. The firm's R&D costs rose 33 percent to $2 million in Q2 2011 from $1.5 million in Q2 2010 due to expenses associated with the development of SmartChip products and services.

The Fremont, Calif.-based company's SG&A costs rose 81 percent to $2.9 million from $1.6 million, the result of additional staffing, activities related to commercializing and selling SmartChip products, consulting expenses, and fundraising activities.

During the quarter, the company took a non-cash charge of $13.2 million related to a $30.6 million private placement (PCR Insider, 5/26/11) that it completed in June. It also saw a net loss from warrant derivative revaluations of $191,000 during the quarter, compared to a gain of $3.6 million a year ago.

Alnoor Shivji, chairman and CEO of the company, said in a statement that the primary focus during the quarter was to secure funding for further commercialization of the SmartChip Real-Time PCR System, which the company launched a little over a year ago. Having achieved that with the $30.6 million private placement, the company "will put this money to work … to expand the commercial team and generate additional applications and content for the SmartChip System," Shivji said.

By adding applications such as genotyping and enhancing the SmartChip panels, WaferGen hopes to "continue to enrich the transformative SmartChip system to address unmet needs in biomarker profiling validation, next-generation sequencing validation, disease research, drug development, personalized medicine, and applied markets," Shivji added.

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