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Helicos Q2 Sales Fall on Lower Grant, Service Revenues

NEW YORK (GenomeWeb News) – Helicos BioSciences reported after the close of the market Tuesday that its second-quarter revenues fell around 29 percent, as its grant and service revenues declined year over year.

The Cambridge, Mass.-based single molecule sequencing technologies firm had total revenues of $577,000 for the three months ended June 30, compared to $809,000 for the second quarter of 2011. Its service revenue fell to $175,000 from $273,000, and its grant revenue dropped to $243,000 from $427,000.

These declines were partially offset by an increase in product revenue to $159,000 from $109,000. The firm said in its Form 10-Q filed with the US Securities and Exchange Commission that the increase in product revenues was primarily due to the sale of product parts for use in a Heliscope system.

Helicos' net loss for the quarter was $459,000, or $.01 per share, compared to a net loss of $1.8 million, or $.02 per share, for the second quarter of 2011.

Its R&D expenses dropped sharply to $353,000 from $982,000, while its SG&A spending fell to $1.2 million from $1.4 million.

Helicos finished the quarter with $446,000 in cash and cash equivalents. But as of Aug. 9, the firm had increased that amount to $2.1 million, due to a licensing agreement with Intelligent Bio-Systems, a firm which is now owned by Qiagen. Under the terms of that non-exclusive patent licensing deal, IBS paid Helicos $1.6 million.

While two of Helicos' financial backers, Atlas Venture and Flagship Ventures, are entitled to 60 percent of the net proceeds of the sale, or $900,000, they have yet to make a demand for the payment. Those same firms have yet to demand money owed to them from Helicos as part of its sale of certain patent applications covering molecular diagnostic applications of its technology to Sequenom for $1.3 million. Flagship and Atlas are entitled to $780,000 from that agreement, and Helicos said that it has accrued that amount as an "other current liability" for the quarter ended June 30. The remaining amount was recorded as "other income" for Q2.

The company recently settled litigation with Pacific Biosciences. Although the firm reiterated in its SEC filing that the terms of the settlement were undisclosed, it noted that as of the end of the quarter $560,000 in settlement proceeds were due to the company. It said it recorded "other income" in the amount of $92,000 and listed a current liability in the amount of $468,000 for amounts due to Flagship, Atlas, and litigation counsel.

Helicos also recently dropped its suit against Life Technologies, leaving Illumina as the sole defendant from legal action Helicos took against the three firms.

However, Helicos cautioned in its SEC filing that its existing funds are not sufficient to support its operations and related litigation expenses through the "planned September 2012 trial date and the ultimate resolution of the pending litigation with Illumina." It noted that it has discussed short-term financing with Flagship and Atlas, but the parties have not yet agreed to such financing.

Helicos also noted that it has cut its staff further and entered the third quarter with eight full-time and part-time employees.

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