Sequenom, Inc. Reports Financial Results For The First Quarter Of 2013
158% Year-Over-Year Increase In Total Revenues Led By Continued Growth In
Diagnostics Sales Volumes
SAN DIEGO, May 9, 2013
SAN DIEGO, May 9, 2013 /PRNewswire/ --Sequenom, Inc. (NASDAQ: SQNM), a life
sciences company providing innovative genetic analysis solutions, today
reported revenue of $38.5 million for the first quarter of 2013, an increase
of 158% compared to revenue of $14.9 million for the first quarter of 2012.
First quarter 2013 revenues from the Sequenom Center for Molecular Medicine
(Sequenom CMM) diagnostics services operating segment grew more than 38% as
compared to the fourth quarter of 2012.
"The volume of 35,000 MaterniT21™ PLUS tests accessioned in the first quarter
shows that Sequenom CMM continued to take advantage of its first mover
position in the non-invasive prenatal diagnostic (NIPT) market by increasing
its penetration of the NIPT market and maintaining its dominant market share.
The recent announcement that Sequenom CMM had accessioned over 100,000
MaterniT21 PLUS test samples since the test was launched in October of 2011 is
further evidence of the remarkable success of this testing service," said
Harry F. Hixson, Jr., Ph.D., Chairman and CEO of Sequenom. "Furthermore, we
are making progress in our negotiations within the payor community, with more
than 70 million patients now under coverage who have access to the MaterniT21
Revenues from the Sequenom CMM diagnostics services operating segment grew to
more than $29 million in the first quarter of 2013, up from $4.8 million in
the prior year period. As of the first quarter 2013, diagnostic revenue
accounted for more than 75% of total revenue, up from 63% in the fourth
quarter of 2012.
Revenues from the Sequenom CMM diagnostics services operating segment are
recorded primarily on a cash basis. Approximately 35% of diagnostic revenue
reported for the first quarter 2013 is attributable to tests performed in the
same period. Approximately 65% of the diagnostic revenue reported in the
first quarter 2013 is related to payment collected on tests performed in prior
periods. First quarter 2013 revenues from the genetic analysis operating
segment decreased 7% from the same period in 2012, due to a softening in
consumables orders, partially due to timing.
Total cost of revenues increased to $24.5 million for the first quarter of
2013, compared to $10.3 million for the prior year period. Cost of revenues
increased primarily due to the significant increase in Sequenom CMM's test
volumes and costs to support increased testing capacity, as total tests
accessioned increased 250% to more than 44,500 patient samples during the
first quarter of 2013. Approximately 35,000 of those patient samples tested
during the first quarter were MaterniT21 PLUS test samples, compared to
approximately 25,000 in the fourth quarter of 2012, growing 40% sequentially.
Overall gross margin for the first quarter of 2013 was 36% as compared to
gross margin of 31% for the first quarter of 2012. This improvement is
attributable primarily to the positive contribution from the Sequenom CMM
diagnostic services business resulting from higher cash collections during the
quarter and improved efficiencies in processing patient samples. Gross margin
for the Sequenom CMM diagnostics services business in the first quarter of
2013 was approximately 28%, as compared to a negative gross margin in the
first quarter of 2012. Gross margin for the genetic analysis business for the
first quarter of 2013 was 63% compared to 66% for the prior year period.
Total operating expenses for the first quarter of 2013 were $41.0 million, as
compared to total operating expenses of $28.9 million for the first quarter of
2012, down sequentially from total operating expenses of $42.0 million for the
fourth quarter of 2012. Selling and marketing expenses increased to $13.7
million for the first quarter of 2013 from $9.7 million year-over-year,
resulting primarily from higher labor costs associated with the expansion of
the Sequenom CMM sales force and increased headcount to support commercial
operations. Research and development expenses increased to $13.8 million for
the first quarter of 2013, as compared to $11.8 million in the first quarter
of 2012, related primarily to increased labor and supplies and costs relative
to the expansion into the Sequenom CMM North Carolina facilities.
General and administrative expenses for the first quarter of 2013 were $13.5
million, as compared to $7.4 million for the first quarter of 2012, primarily
due to increased legal expenses associated with patent litigation, increased
collection costs due to the increase in diagnostics revenue and increased
headcount to support the Company's operations. Total stock-based compensation
expense was $3.1 million for the first quarter of 2013, an increase from $2.9
million in stock-based compensation recorded for the first quarter of 2012.
Net loss for the first quarter of 2013 was $29.4 million, or $0.26 per share,
as compared to net loss of $24.4 million, or $0.22 per share, for the same
period in 2012. Net cash used in operating activities was $19.7 million for
the first quarter of 2013, compared to $23.3 million in the same period in the
prior year. The Company also used cash for capital investments of $4.1
million and debt repayments of $1.8 million during the first quarter of 2013.
As of March 31, 2013, total cash, cash equivalents, and marketable securities
were $151.1 million.
"We are pleased to see sequential improvements in volume, revenue and margin
during the quarter, an indication of steady growth and sustained momentum in
2013," said Paul V. Maier, Sequenom's CFO. "As we complete the process of
moving our billing and collections processes in-house, we anticipate even
greater control in monitoring our payments from payors and improved workflows
that will help us improve our collection cycle and reimbursement."
The Company recently reported that Sequenom CMM had processed 100,000
MaterniT21 PLUS samples since launch of the testing service in October 2011,
reflecting the overwhelmingly positive response from the physician community
based on the superior attributes of the test and customer support offered by
Sequenom CMM. Nearly 60% of maternal-fetal medicine specialists and more than
3,300 OBGYN physicians in the United States have ordered the test since its
The annualized run rate for the MaterniT21 PLUS test at the end of the first
quarter surpassed 140,000 samples. This growth has continued with a record
number of samples accessioned in the last week of April and Sequenom CMM
expects to exceed 150,000 samples accessioned for all of 2013.
During the first quarter, Sequenom CMM published several key studies that
support enhanced performance and clinical utility of both the MaterniT21 PLUS
test, and the RetnaGene™ AMD laboratory-developed test for age related macular
degeneration (AMD). A publication inPLOS One in March 2013describes the
basis of process enhancements to the MaterniT21 PLUS test, along with
equivalence data in a large clinical sample set.
Sequenom CMM also announced that the MaterniT21 PLUS test now reports on the
presence of fetal sex chromosomal aneuploidies, in addition to its
identification of aneuploidies for chromosomes 21, 18 and 13. Results of a
blinded clinical study reporting on detection of sex aneuploidies have been
accepted for publication inPrenatal Diagnosisand is available online.
A largepatient study published in Ophthalmology in March 2013 describes
enhancements to the clinical utility of the RetnaGene AMD test by
demonstrating that the test can now be usedto predict progression risk to
choroidal neovascularization (CNV) or late stage '"wet" AMD in patients with
early stage disease.
Sequenom CMM had a strong presence during the annual clinical meeting of the
American College of Medical Genetics and Genomics in March, during which NIPT
was a prominent topic. Sequenom CMM hosted a dynamic symposium on NIPT
attended by approximately 700 medical professionals and presented a series of
posters highlighting its clinical experience with the first 60,000 MaterniT21
PLUS test samples processed.
Sequenom CMM also accessioned a record number of patient samples for cystic
fibrosis testing, based on the introduction of the Heredi-T™ cystic fibrosis
(CF) carrier screening test. The Heredi-T CF laboratory-developed test now
analyzes 136 mutations and five variants proven to be clinically relevant in
causing CF, integrating disease causing mutations selected from the Johns
Hopkins CFTR2 database. The test analyzes nearly six times the number of
clinically relevant mutations currently available in the most common
commercial CF carrier screening test methods.
In response to the growing commercial interest and demand for its testing
services, Sequenom CMM expanded its diagnostics sales force during the first
quarter of 2013, bringing the total to approximately 84 diagnostic sales
representatives actively selling in all 50 states. The Company continues to
expand into international markets as well.
Sequenom CMM has implemented an in-house billing system, effective May 1,
2013, utilizing a leading hosted software solution. This new system is
expected to enable Sequenom CMM to maximize reimbursement, improve cash flow
and improve efficiencies in the billing and collections process.
Sequenom CMM has completed the build-out and validation of the additional
laboratory location in North Carolina, which has recently received its CLIA
registration for operation. This additional location is expected to begin
commercial operations mid-year.
As a result of the Company's efforts, the U.S. patent and trademark office
(PTO) declared a patent interference on May 3, 2013, between issued U.S.
Patent number 8,195,415, which is asserted against the Company in litigation,
and U.S. patent application number 13/070,266, which is exclusively licensed
to Sequenom, Inc. On the same date, the PTO also re-declared patent
interference number 105,920, betweenissued U.S. Patent no. 8,008,018, which
is also asserted against the Company in litigation, and U.S. patent
application no. 13/070,275, which is exclusively licensed to Sequenom, Inc.
On May 3, 2013, the PTO also declared two additional patent interferences
(nos. 105,923 and 105,924) between patent applications licensed to another
party and patent applications licensed to Sequenom, Inc.
"We are encouraged by these decisions by the PTO and look forward to continued
developments in this important area," said Bill Bowen, Senior Vice President
and General Counsel of Sequenom, Inc.
Conference Call Information
A conference call hosted by Harry F. Hixson, Jr., Ph.D., Chairman and CEO, and
other members of senior management will take place today, May 9, at 5:00 pm ET
(2:00 pm PT) and will be webcast live on the Sequenom website. To access the
live teleconference call, dial 800-860-2442 in the U.S. and 412-858-4600 for
international callers. Please specify to the operator that you would like to
join the "Sequenom First Quarter 2013 Earnings Conference Call." If you are
unable to listen to the live webcast, a teleconference replay will be
available until Thursday, May 16, 2013. Interested parties can access the
replay by dialing 877-344-7529 or 412-317-0088 internationally and entering
the conference number 10028207.
The conference call webcast is accessible through the "Investors" section of
the Sequenom website at http://ir.sequenom.com. An online replay will be
available following the initial broadcast until Thursday, June 20, 2013.
Sequenom, Inc. (NASDAQ: SQNM) is a life sciences company committed to
improving healthcare through revolutionary genetic analysis solutions.
Sequenom develops innovative technology, products and diagnostic tests that
target and serve discovery and clinical research, and molecular diagnostics
markets. The company was founded in 1994 and is headquartered in San Diego,
California. Sequenom maintains a Web site at http://www.sequenom.com to which
Sequenom regularly posts copies of its press releases as well as additional
information about Sequenom. Interested persons can subscribe on the Sequenom
Web site to email alerts or RSS feeds that are sent automatically when
Sequenom issues press releases, files its reports with the Securities and
Exchange Commission or posts certain other information to the Web site.
About Sequenom Center for Molecular Medicine
Sequenom Center for Molecular Medicine (Sequenom CMM^®) is a CAP accredited
and CLIA-certified molecular diagnostics reference laboratory currently with
two locations dedicated to the development and commercialization of
laboratory-developed tests for prenatal and eye conditions and diseases.
Utilizing innovative proprietary technologies, Sequenom CMM provides test
results that can be used by health care professionals in managing patient
care. Testing services are available only upon request by physicians.
Sequenom CMM works closely with key opinion leaders and experts in
obstetrics, retinal care and genetics. Sequenom CMM scientists use a variety
of sophisticated and cutting-edge methodologies in the development and
validation of tests. Sequenom CMM is changing the landscape in genetic
diagnostics. Visit http://www.sequenomcmm.com for more information on
laboratory testing services.
SEQUENOM^®, MaterniT21™, MaterniT21™ PLUS, RetnaGene™ and Heredi-T™ are
trademarks of Sequenom, Inc. All other trademarks and service marks are the
property of their respective owners.
Except for the historical information contained herein, the matters set forth
in this press release, including statements regarding the Company's progress
in negotiations with payors, indications of steady growth and sustained
momentum in 2013 for the Company's diagnostics business, the Company's
expectations to complete the moving of its billing and collections processes
in-house and its anticipation of greater control in monitoring payments from
payors and improved workflows that will improve collections, maximize
reimbursement and improve cash flow and efficiencies, the annualized run rate
for the MaterniT21 PLUS test at the end of the first quarter and Sequenom
CMM's expectation to exceed 150,000 samples accessioned for all of 2013, the
Company's continuing expansion in international markets, Sequenom CMM's
expectation for the North Carolina laboratory to begin commercial operations
mid-year 2013, the Company's commitment to improving healthcare through
revolutionary genetic analysis solutions, and Sequenom CMM's dedication to the
development and commercialization of laboratory-developed tests for prenatal
and eye conditions and diseases and changing the landscape in genetic
diagnostics, are forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties that
may cause actual results to differ materially, including the risks and
uncertainties associated with market demand for and acceptance and use of
technology and tests such as the MaterniT21 PLUS test, reliance upon the
collaborative efforts of other parties such as, without limitation, healthcare
providers, international distributors and licensees, the Company or third
parties obtaining or maintaining regulatory approvals that impact the
Company's business, government regulation particularly with respect to
diagnostic products and laboratory developed tests, publication processes, the
performance of designed product enhancements, the Company's ability to develop
and commercialize technologies and products, particularly new technologies
such as noninvasive prenatal diagnostics, laboratory developed tests, and
genetic analysis platforms, the Company's financial position, the timing and
amount of reimbursement that Sequenom CMM receives from payors for its
laboratory developed tests, the Company's ability to manage its existing cash
resources or raise additional cash resources, competition, intellectual
property protection and intellectual property rights of others, litigation
involving the Company, and other risks detailed from time to time in the
Company's most recently filed Quarterly Report on Form 10-Q, its most recently
filed reports on Form 8-K, and its most recently filed Annual Report on Form
10-K, and other documents subsequently filed with or furnished to the
Securities and Exchange Commission. These forward-looking statements are based
on current information that may change and you are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date of this press release. All forward-looking statements are qualified in
their entirety by this cautionary statement, and the Company undertakes no
obligation to revise or update any forward-looking statement to reflect events
or circumstances after the issuance of this press release.
[Financial tables follow]
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share information)
Three Months Ended March 31,
Diagnostic services $ 29,083 $ 4,780
Genetic analysis product sales and services 9,415 10,140
Total revenues 38,498 14,920
Cost of revenues:
Cost of diagnostic services 21,079 6,871
Cost of genetic analysis product sales and 3,459 3,423
Total cost of revenues 24,538 10,294
Gross margin 13,960 4,626
Selling and marketing 13,657 9,677
Research and development 13,834 11,844
General and administrative 13,483 7,350
Total operating expenses 40,974 28,871
Loss from operations (27,014) (24,245)
Other income (expense), net (2,334) (176)
Loss before income taxes (29,348) (24,421)
Income tax expense (12) (2)
Net loss $ (29,360) $ (24,423)
Net loss per common share, basic and diluted $ (0.26) $ (0.22)
Weighted average number of shares outstanding, 115,040 110,512
basic and diluted
CONDENSED CONSOLIDATED BALANCE SHEETS
Cash, cash equivalents and marketable securities $ 151,075 $ 175,942
Accounts receivable, net 7,127 7,887
Inventories 12,582 10,570
Other current assets and prepaid expenses 3,639 3,075
Total current assets 174,423 197,474
Property, equipment and leasehold improvements, net 35,243 33,494
Other assets 18,325 17,987
Total assets $ 227,991 $ 248,955
Liabilities and stockholders' equity
Accounts payable $ 20,479 $ 16,469
Accrued expenses 27,316 24,507
Long-term debt and obligations, current portion 7,607 7,601
Other current liabilities 2,878 2,713
Total current liabilities 58,280 51,290
Long-term liabilities 147,300 149,658
Total stockholders' equity 22,411 48,007
Total liabilities and stockholders' equity $ 227,991 $ 248,955
SOURCE Sequenom, Inc.
Contact: Marcy Graham, Senior Director, Investor Relations & Corp Comm,
Sequenom, Inc., 858-202-9028, firstname.lastname@example.org; or Jakob Jakobsen, Media
Contact, Chandler Chicco Agency, 310-309-1003,
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