NEW YORK (GenomeWeb News) – WaferGen Biosystems today reported a steep drop in its third-quarter revenues and a planned cut of 24 percent of its workforce as part of a revised plan to increase adoption of its SmartChip System.
The Fremont, Calif.-based firm reported total revenues of $89,088 for the quarter ended Sept. 30, compared to $633,241 for the third quarter of 2010.
The firm is in the midst of retooling its commercialization strategy for the SmartChip Real-Time PCR System. The latest results follow a similar sharp decline in second-quarter sales.
"During the third quarter of 2011 we implemented a new commercial strategy to address the rapidly changing needs of the life sciences research market and to better anticipate future needs of researchers," WaferGen COO Mona Chadha said in a statement. "We have decided to invest significantly in scientific resources focused on a strategy to engage an array of key opinion leaders in our target market, enabling the profiling and validation of high-value genomic targets."
Though the firm provided scant details of the new commercialization strategy, it said that it would trim its workforce by 24 percent — a move that is expected to result in a $1.3 million annual reduction in operating expenses. It will take a one-time charge related to the job cuts of approximately $400,000 in the fourth quarter.
WaferGen posted a profit of $3.6 million, or $.03 per share, compared to a net loss of $5.2 million, or $.14 per share, for the third quarter of 2010. The results for Q3 2011 were impacted by a $7.5 million gain on the revaluation of promissory notes and a nearly $1.1 million gain on the revaluation of warrants. Its net loss attributable to common stockholders was $19.2 million, or $.46 per share, compared to a loss attributable to common stockholders of $9.7 million, or $.27 for Q3 2010.
WaferGen's R&D costs for the quarter declined 5 percent to $1.9 million from $2 million, while its SG&A expenses increased 16 percent to $2.2 million from $1.9 million.
The firm finished the quarter with $19.8 million in cash and cash equivalents. In May the company completed a private placement financing of $30.6 million in equity and debt with three institutional life science investors, as well as certain members of the Board of Directors and management.