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WaferGen's Q4, FY'10 Revenues Climb on SmartChip Sales, Though Net Loss Mounts

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WaferGen Biosystems this week reported that its fourth-quarter revenues more than tripled and full-year revenues grew more than five-fold due primarily to sales of its SmartChip products and services.

Despite this, WaferGen's net loss mounted in Q4 and fiscal year 2010 as it pumped cash into the commercial launch and marketing of the SmartChip system, the company said.

For the three-month period ended Dec. 31, WaferGen logged $712,000 in revenues compared to $190,000 in Q4 2009. Meantime, for full-year 2010 WaferGen reported revenues of $2.2 million, up from $379,000 in 2009.

WaferGen said that the majority of these revenues resulted from sales of a combination of one or more of its SmartChip real-time PCR systems, SmartChip consumables, and SmartChip gene expression profiling services.

The company noted that its revenue growth in 2010 was driven by "favorable market acceptance" of the SmartChip system, which the company officially launched in August 2010, but had made available to several early-access customers months ahead of that (PCR Insider, 8/5/2010).

WaferGen said that it sold nine SmartChip systems to customers worldwide in 2010. The company did not break out specific revenues from sales of SmartChip systems, consumables, and services; however, in August it confirmed that a SmartChip system would cost around $150,000, which would mean that the system accounted for about $1.35 million, or a little over 60 percent, of its 2010 revenues.

In a statement, Chairman and CEO Alnoor Shivji said that the $2.2 million in 2010 revenues exceeded the company's guidance of $1.5 million to $2 million for the year.

WaferGen posted a net loss of $3.1 million, or $.08 per share, for the quarter, compared to a loss of $3 million, or $.10 per share, for Q4 2009. The company's yearly net loss increased to $12.8 million, or $.35 per share, from $10.8 million, or $.39 per share, in 2009.

WaferGen said that net loss increased in Q4 and the full year primarily due to higher operating expenses associated with the commercialization of the SmartChip system.

WaferGen's R&D spending declined 6 percent to $1.6 million from $1.7 million, while its SG&A expenses were up 64 percent to $2.3 million versus $1.4 million. The company's R&D costs in 2010 were $6.7 million versus $5.1 million for 2009, and its SG&A spending jumped to $7.2 million from $5 million.

WaferGen finished the year with $2.3 million in cash, cash equivalents, and restricted cash.

"We have made great progress over the past year to position the SmartChip system as the product of choice for genomic analysis in high-growth markets such as next-generation sequencing," Shivji said.

Shivji also noted that the company has "enhanced our distribution capability to Europe, Japan, and China, and grown our management team, board of directors, and scientific advisory board to sustain our growth. We anticipate that 2011 will be a year of strong growth and broader commercial adoption for the company, with new products, applications, and additional customers."

WaferGen did not provide financial guidance for 2011.

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