NEW YORK (GenomeWeb) – Sequenom's first quarter 2016 revenues dropped 27 percent compared to the first quarter of 2015, the company said after the close of the market on Wednesday.
The molecular diagnostics company recognized $27.6 million in Q1 revenues, down from $37.8 million in Q1 2015. It missed analysts' average estimate of $27.9 million.
The year-over-year revenue drop was primarily due to a number of customers converting from purchasing noninvasive prenatal tests that Sequenom ran itself, to licensing the rights to develop their own tests through a patent pool agreement that Sequenom and Illumina established at the end of 2014, the company said.
During a conference call discussing its Q1 2016 performance, Sequenom CFO Carolyn Beaver said that the conversion of customers to licenses reduced total quarterly revenue by about $5 million, which was partially offset by $2 million in new business from other customers.
In addition, 46 laboratories now have licenses from the pool, up from 39 at the end of 2015, although only 25 laboratories are currently active, up from 18 at the end of 2015
Earlier today, the company announced it had achieved in-network status with six state Anthem Blue Cross and Blue Shield providers as well as Blue Cross and Blue Shield of Georgia.
"Overall, we made meaningful progress toward achieving our goal of becoming financially self-sustaining while solidifying our position as a leader in reproductive health," Sequenom CEO Dirk van den Boom said in a statement.
Total Q1 revenues included $25.4 million in diagnostic services revenue, down 29 percent from $35.7 million in Q1 2015, as well as $2.2 million in license revenue, up 5 percent from $2.1 million in Q1 2015.
Sequenom accessioned a total of 46,400 patient samples, 41,200 of which were for NIPT, including its MaterniT21 Plus, VisibiliT, and MaterniT Genome tests. Total tests run declined 12 percent, while NIPTs run declined 9 percent.
Sequentially, tests accessioned were up 10 percent compared to the fourth quarter of 2015, due to Sequenom running more of its VisibiliT tests for average-risk pregnancies.
Van den Boom said during the conference call that the company expects to accession 170,000 NIPTs during 2016 and recognize $120 million in revenue, including $10 million from patent pool license fees. In addition, he reiterated a previous goal of breaking even by the end of 2017.
The firm's net loss for the quarter was $13.4 million, or $.11 per share, compared to a net gain of $14.3 million, or $.11 per share, in Q1 2015. The year-ago net gain was due to a one-time $21.0 million payment from Illumina related to the companies' patent pool agreement. It missed the Wall Street estimate of a $.10 loss per share.
Sequenom's R&D expenses were $4.9 million, down 16 percent from $5.9 million in the prior-year period. Its SG&A expenses were $16.4 million in the quarter, down 5 percent from $17.2 million. Sequenom also incurred $859,000 in restructuring expenses in the quarter.
The firm ended the quarter with $66.1 million in cash, cash equivalents, and marketable securities.