SEQUENOM Reports Fourth Quarter and Full-Year 2005 Financial Results
Tuesday March 28, 8:30 am ET
SAN DIEGO, March 28 /PRNewswire-FirstCall/ -- SEQUENOM, Inc. (Nasdaq: SQNM - News) today reported financial results for the fourth quarter and full-year ended December 31, 2005, as well as corporate goals and guidance for 2006.
SEQUENOM's revenues for the fourth quarter were $4.4 million, compared to $6.1 million for the fourth quarter of 2004. Revenues for 2005 were $19.4 million, compared to $22.4 million for the prior year. Total costs and expenses for the quarter were $11.5 million, compared to $13.0 million for the fourth quarter of 2004. Total costs and expenses for 2005 were $47.2 million, compared to $58.6 million for the prior year.
The net loss for the fourth quarter was $7.0 million, or $0.17 per share, compared to $6.6 million, or $0.16 per share for the fourth quarter of 2004. The net loss for 2005 was $26.4 million, or $0.66 per share, compared to $34.6 million, or $0.87 per share for 2004. On December 31, 2005, the Company held cash, cash equivalents, short-term investments and restricted cash totaling $8.7 million.
"Our strategy to restart growth in our core business is beginning to show results. Our MassARRAY® system sales pipeline is robust, and the number of potential customers for our service business initiated in the fourth quarter continues to grow," said Harry Stylli, MBA, Ph.D., President and Chief Executive Officer of Sequenom. "The cost savings and restructuring steps taken during the third and fourth quarters of 2005 will positively impact 2006. We also launched our iPLEX(TM) multiplexing assay in late 2005 and this application, coupled to the Company's proprietary MassARRAY Compact system, is expected to be the primary contributor to top line revenue growth in 2006. Our collaboration with Siemens Medical Solutions has delivered positive results which underscores the potential of the MassARRAY platform for nucleic acid testing in molecular diagnostics research."
The financial results in this press release are unaudited. Our complete, audited financial statements for the year ended December 31, 2005 will be included in our Annual Report on Form 10-K to be filed with the SEC on or before March 31, 2006. We expect that the Report of Independent Registered Public Accounting Firm included in our Annual Report on Form 10-K will include an additional paragraph regarding our ability to continue as a going concern.
2005 Highlights
* Launched iPLEX(TM) Assay. Our iPLEX assay significantly increases the
level of multiplexing and thereby reduces the cost per genotype to less
than 5 cents.
* Received Positive Feedback from Benchmarking Study Funded by Siemens
Medical Solutions. Under the study, we installed MassARRAY systems at
Specialty Laboratories, Inc. in the U.S. and bioscientia GmbH in
Germany to benchmark the MassARRAY system in a molecular diagnostic
research testing environment. Preliminary data from the in-depth
research study shows that the MassARRAY technology has competitive
advantages in throughput and overall performance, including cost,
compared to leading commercial technologies.
* Secured Rights to Key Non-Invasive Prenatal Diagnostic Intellectual
Property. We acquired exclusive rights in certain countries including
the United States, United Kingdom and other countries in Europe and
elsewhere, to intellectual property related to non-invasive prenatal
diagnostic applications. The intellectual property covers non-invasive
prenatal genetic analysis on fetal nucleic acids derived from maternal
plasma or serum on any platform including, but not limited to, mass
spectrometry and real time polymerase chain reaction amplification
platforms.
* Introduced Service Business. Both as a complement and an alternative to
our product offerings, our DNA genotyping, quantitative gene
expression, and quantitative methylation analysis service business
provides researchers with access to these sensitive and precise
applications for disease detection research and classification, and
other needs.
2006 Corporate Goals and Financial Guidance
With the launch of our EpiTYPER(TM) assay, an enabling tool for DNA methylation marker research, and our QGE iPLEX multiplex assay, a research tool for quantitative gene expression analysis, behind us, other goals for 2006 include:
* $10 Million in Cash Flow Savings Compared to 2005. Based on our
cost-cutting measures initiated in late 2005, our continuous monitoring
of costs, and our expected improvement in sales revenues for 2006, we
expect that our cash use in 2006 will be reduced by $10 million
compared to 2005.
* iPLEX II Launch. Our scientists are developing the next version of our
iPLEX assay, which should reduce cost per genotype from 5 cents to
3 cents and further improve data quality. We expect this assay to be
available in the 4th quarter.
* Development and Validation of Proprietary Fetal DNA Enrichment Method.
This technical milestone is key for the development and
commercialization of certain non-invasive prenatal diagnostic research
assays, such as assays for Down's syndrome. We expect to complete this
project in the 3rd quarter.
* Collaborations with Leading CLIA Labs. Our first non-invasive prenatal
diagnostic research use assay for Rhesus D is expected to be launched
in early 2007. In advance of the launch, we will need to establish
relationships with CLIA-certified laboratories.
For 2006, we expect total revenues to be approximately $24 million, or nearly 25% growth in revenue compared to 2005, with the potential for further upside revenues from our business development and service business activities. We expect our operating expenses for 2006 to be consistent with 2005, as the cost savings that result from our cost reduction measures implemented in late 2005 will be offset by our investment in the development of non-invasive prenatal diagnostic research use tests. We expect to use approximately $15 million in cash in 2006. Additionally, we have adopted SFAS No. 123R, "Share-based Payments," which requires us to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards. While we have not yet completed our analysis, we expect the adoption of SFAS No. 123R will have a material impact on our results of operations.
Web Cast of Conference Call
SEQUENOM's management will hold a conference call Tuesday, March 28, 2006 at 1:00 p.m. EST to discuss the Company's fourth quarter and full-year 2005 results, scientific achievements and milestones as well as corporate goals for 2006. A live web cast is available at videonewswire.com and through a link that is posted on the Company's web site at www.sequenom.com. The web cast will be available online through April 18, 2006. A telephone replay of the conference call also will be available for 48 hours at (800) 695-2122 or (402) 530-9027, ID: SEQUENOM.
SEQUENOM, Inc.
Condensed Consolidated Financial Statements
(in thousands, except per share data)
Consolidated Summary of Operations
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
(Unaudited) (Unaudited)
Revenues:
Consumables $2,763 $3,620 $11,007 $13,162
Other product related 1,635 1,929 8,063 7,864
Services -- -- -- 199
Research -- 547 351 1,224
Total revenues 4,398 6,096 19,421 22,449
Costs and expenses:
Cost of product & service
revenue 2,565 2,390 10,370 11,361
Research and development
expenses 2,992 3,900 11,763 18,604
Selling and marketing expenses 2,465 2,915 10,925 11,158
General and administrative
expenses 2,752 2,766 11,213 12,141
Restructuring charge 279 363 593 2,207
Amortization of acquired
intangibles 503 681 2,014 3,075
Amortization of deferred
stock-based compensation (31) -- 311 52
Total costs and expenses 11,525 13,015 47,189 58,598
Operating loss (7,127) (6,919) (27,768) (36,149)
Net interest income 55 101 308 339
Other income, net (113) (46) 94 33
Loss before income taxes (7,185) (6,864) (27,366) (35,777)
Deferred income tax benefit 232 296 929 1,152
Net loss $(6,953) $(6,568) $(26,437) $(34,625)
Net loss per share, basic and
diluted: $(0.17) $(0.16) $(0.66) $(0.87)
Weighted average of shares
outstanding, basic and diluted 39,991 39,944 39,829 39,720
Consolidated Balance Sheet Information
December 31, December 31,
2005 2004
(Unaudited) (Audited)
Assets:
Cash, cash equivalents,
short-term investments and
restricted cash $8,678 $37,943
Property, equipment and
leasehold improvements, net 5,621 6,722
Other assets, including
intangibles 10,137 13,821
Total assets $24,436 $58,486
Liabilities and Stockholders' Equity:
Deferred revenue 1,501 1,424
Other liabilities 11,092 18,990
Stockholders' equity 11,843 38,072
Total liabilities and
stockholders' equity $24,436 $58,486
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