Dead on with my call re bad quarters:
>>FREMONT, Calif., June 30 /PRNewswire-FirstCall/ -- Ciphergen Biosystems, Inc. (Nasdaq: CIPH - News) announced that its preliminary revenue forecast for the second quarter ending June 30, 2004 will be approximately $10.0-11.0 million, as compared to revenue of approximately $14.3 million in the second quarter of 2003. This preliminary revenue estimate is subject to final accounting and audit processes, and therefore could change.
William E. Rich, President and CEO, commented: "After meeting our expectations in the first quarter, our ProteinChip® System placements came in significantly short of our expectations and BioSepra sorbent revenue was down from the second quarter of last year. We believe that overall spending on capital goods in the proteomics market remains constrained relative to our expectations. Alternative proteomic technologies, methods and services for biomarker discovery have resulted in market confusion and delays or loss of system orders. Looking forward, new product introductions, especially our next generation ProteinChip platform planned for the third quarter, and progress on the diagnostics front are expected to improve the adoption of our technology. BioSepra® sorbent revenue is expected to be stronger in the second half of 2004 than in the first half based on our backlog. In addition, we will take steps to reduce operating expenses in our Biosystems Division more in line with a reduced revenue run rate, while continuing our full investment in and commitment to our Diagnostics Division."
Other Recent Developments:
-- Preparing for Major New Product Launch. Ciphergen is in the final
stages of testing its next generation ProteinChip platform, which it
currently plans to launch during the third quarter.
-- Preparation for Automated Chip Manufacturing. For the past 18 months,
Ciphergen has been installing an automated chip manufacturing system in
its Fremont facility. During the second quarter, this system passed
the pre-validation stage including manufacturing our first lots of
chips, and we expect to complete validation and utilize the system in
production in the third quarter. Expected benefits of this new system
are an ability to increase production volumes without adding labor and
an improvement in product quality.
-- Significant Progress in Japan. Ciphergen Biosystems K.K. was designated
as one of the official technology suppliers of a major Japanese
national project known as the "Drug Discovery Proteome Factory" which
was organized by The Japan Health Science Foundation to carry out a
national project named "Analysis of Disease-related Proteins." About
20 leading Japanese pharmaceutical companies are involved in this
5-year project as members of this consortium with the promised support
of 4.5 billion Japanese Yen. Ciphergen's ProteinChip System was
recognized as one of the core technologies for clinical proteomics in
Japan and has been selected as one of the technologies for the high-
throughput proteome analysis for discovery and characterization of
disease-related proteins.
-- Ovarian Cancer Initiative. Ciphergen's 500 sample, multi-site ovarian
cancer study, conducted in collaboration with the Johns Hopkins
University School of Medicine, MD Anderson, Duke University Medical
School, The Royal Hospital for Women (Sydney), University Hospital
Groningen and Queen Mary's School of Medicine (London), has been
accepted for publication by the journal Cancer Research, with
publication expected in the fall of this year. Our follow-on study,
employing 1,500 samples from two additional sites, is currently being
conducted around three clinical questions: early detection, late stage
detection and treatment monitoring for recurrence.
-- Kidney Transplantation Rejection Assay. On May 16, researchers from
the Johns Hopkins University School of Medicine provided a special
invited lecture to the American Transplant Congress in Boston,
Massachusetts in which they reported a promising study in kidney
transplantation enabled by Ciphergen's SELDI ProteinChip(R) System.
The methodology employed by the research group was used to develop the
basis of a simple urine test that identifies impending kidney failure
or rejection following transplant surgery -- a potential alternative to
kidney biopsies for renal transplant patient monitoring.
-- Upcoming Alzheimer's Meeting. At the July 17-22 9th International
Conference on Alzheimer's Disease and Related Disorders in
Philadelphia, Ciphergen's collaborator, Dr. Kaj Blennow, will be
presenting the plenary lecture and will be describing recent results
from our joint Alzheimer's discovery program seeking to differentiate
Alzheimer's Disease from other forms of dementia.
Ciphergen will host a conference call on July 1 at 8:30 a.m. Eastern Time to discuss this press release. Participants may dial 888-260-7513 in the U.S. or 706-679-5981 outside the U.S. A telephone replay of this webcast will be available for 24 hours beginning at 10:30 a.m. Eastern Time at 800-642-1687 (U.S.) or 706-645-9291 (outside the U.S.) and request conference ID # 8501743. A replay will also be available on the Investor Relations portion of Ciphergen's website at www.ciphergen.com. <<
snip
This is ~40% below previous guidance. Now is the time to start nibbling, IMO. The cutbacks in the Bioysystems division are prudent, until the next generation system gains traction. Meanwhile, visibility on the diagnostics front, as well as productivity measures mentioned above will help, too. This may not do much right away, but it's worth starting a position in case the near term presentations cause some buzz.
Cheers, Tuck |
