diaDexus, Inc. Reports First Quarter 2014 Financial Results

  diaDexus, Inc. Reports First Quarter 2014 Financial Results

       Increasing Full Year 2014 Revenue Guidance to $27 to $29 Million

                    Conference Call Today at 4:30 p.m. ET

Business Wire

SOUTH SAN FRANCISCO, Calif. -- May 7, 2014

diaDexus, Inc. (OTCQB: DDXS), a company developing and commercializing
proprietary cardiovascular diagnostic products, today announced financial
results for the first quarter ended March 31, 2014.

"In the first quarter, diaDexus delivered $5.4 million in revenues, while
continuing the sales and marketing programs that we believe position us for
positive revenue growth in the second half of 2014. In addition, the recently
secured laboratory services contract with GlaxoSmithKline (GSK) has enabled us
to raise our full year revenue guidance," said Brian Ward, Ph.D., diaDexus'
president and chief executive officer. "We are also pleased to announce the
completion of a validation study for the PLAC test for Lp-PLA[2] Activity that
will support our submission of a traditional 510(k) by mid-year.”

Recent Highlights

  *Gross margins for the first quarter 2013 were 70 percent compared with 67
    percent for the comparable period in 2013.
  *Significantly expanded support of our laboratory partners including the
    doubling of our sales force in the first quarter of 2014.
  *Entered into a services agreement with GSK to provide them with certain
    laboratory testing and related services worth up to $3.1 million in
  *Completed the validation study that will support our submission to the
    U.S. Food and Drug Administration of a traditional 510(k) for the PLAC
    test for Lp-PLA[2] Activity by mid-year.
  *Data presented at the 63rd Annual American College of Cardiology
    Scientific Session from the GSK sponsored Phase 3 STABILITY trial provided
    further evidence that Lp-PLA[2 ]is a causative risk factor for coronary
    heart disease.
  *Expanded our pipeline through an exclusive licensing and supply agreement
    with Thermo Fisher Scientific Inc., that will provide diaDexus with the
    ability to develop and commercialize three independent biomarkers
    (MR-proADM (midregional pro adrenomedullin), MR-proANP (midregional pro
    atrial natriuretic peptide), and CT-proET1 (C-terminal pro endothelin-1))
    to aid in risk prediction and prognosis for heart failure.
  *Dedicated resources to the heart failure biomarker program and initiated
    feasibility studies for two of the three biomarkers, MR-proADM and

Total revenues for the first quarter 2014 were $5.4 million, compared with
$5.6 million reported in the first quarter of 2013. The decrease in revenues
for the first quarter of 2014 was due to an unexpected, temporary decline in
orders from a significant customer that was partially accounted for by
seasonality in the business and by inclement weather that particularly
affected the Eastern half of the U.S. Total operating expenses for the first
quarter 2014 were $9.3 million, compared with $6.9 million for the first
quarter of 2013. The increase in operating expenses resulted primarily from
the costs related to in-licensing the three heart failure biomarkers from
Thermo Fischer Scientific for $1.7 million and costs related to expansion of
our sales and marketing programs. The Company's net loss for the first quarter
2014 was $4.1 million, or $(0.07) per share, compared with a net loss of $1.2
million, or $(0.02) per share, in the first quarter of 2013.

Updated 2014 Financial Guidance

For the full year 2014, the Company is increasing its total revenue guidance
to be in the range of $27 to $29 million to account for the potential revenue
associated with the recently announced GSK service agreement. The Company
anticipates second quarter revenues to be significantly higher than the same
quarter last year as a result of this agreement and continues to anticipate
positive product revenue growth in the second half of 2014 as a result of the
Company’s recently expanded sales and marketing programs.


diaDexus will host a conference call and webcast today, May 7 at 4:30 p.m. ET
(1:30 p.m. PT) to discuss the first quarter 2014 results. The dial-in numbers
for the conference call are 1 (877) 378-9048 for domestic callers and 1 (781)
483-4169 for international. The reservation number for both is 35773383. The
webcast may be accessed via the company's website at www.diadexus.com/webcast.
A replay of the webcast will be available shortly following the live webcast.

About diaDexus, Inc.

diaDexus, Inc., based in South San Francisco, California, develops and
commercializes proprietary cardiovascular diagnostic products addressing unmet
needs in cardiovascular disease. The company's PLAC® Test ELISA Kit is the
only blood test cleared by the FDA to aid in predicting risk for both coronary
heart disease and ischemic stroke associated with atherosclerosis, the #1 and
#3 causes of death, respectively, in the United States. The company's PLAC®
Test for Lp-PLA[2] Activity, a CE-marked test, is an indicator of
atherosclerotic cardiovascular disease, the #1 cause of death in Europe.
diaDexus is ISO 13485 certified and manufactures the PLAC Test for Lp-PLA[2]
Activity on-site. For more information, please visit the company's website at

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
are based on current expectations and assumptions and entail various risks and
uncertainties that could cause actual results to differ materially from those
expressed in such forward-looking statements. Important factors known to
diaDexus that could cause actual results to differ materially from those
expressed in such forward-looking statements include the factors necessary to
achieve revenue guidance, including the positive second half growth and the
potential success of our expanded sales and marketing program, and product
opportunity expectations for the remainder of the year such as diaDexus'
ability to gain acceptance of its PLAC® Test products in the marketplace, such
as its ability to demonstrate that treatment of individuals based on their
Lp-PLA[2] levels improves clinical outcomes in prospective clinical studies;
diaDexus' high degree of customer concentration, including the downward
pressure that its largest customers exert on its product pricing; the ability
to continue to grow revenue at the same quarterly or annual rate; the medical
device excise tax under the Patient Protection and Affordable Care Act of 2010
("PPACA") and the ability to pass those costs through to customers; the
ability to report under the sunshine provisions of the PPACA; diaDexus'
relationship with key customers, including GlaxoSmithKline, the licensor of
Lp-PLA[2]; third party payors' acceptance of and reimbursement for the
PLAC®Tests; diaDexus' ability to obtain higher selling prices with its
partners when reimbursement coverage for its PLAC® Tests increases; diaDexus'
ability to develop and commercialize new products and services; various risks
associated with the international expansion of diaDexus' business; the timing
of data unblinding in the second Phase 3 study of darapladib being conducted
by GlaxoSmithKline and its impact on the PLAC Test adoption and sales;
diaDexus' ability and timing to submit a new 510(k) application for, and
obtain FDA clearance of, its new automated Lp-PLA[2] Activity test; diaDexus'
ability to initiate and continue to manufacture the PLAC® Test for Lp-PLA[2]
Activity to meet customer demand; diaDexus will be able to successfully
develop and commercialize tests to measure MR-proADM, MR-proANP, CT-proET1 for
clinical evaluations, the timing of when the development efforts may be
completed, whether the Food and Drug Administration will clear any or all of
these commercial tests, if at all, whether Thermo Fisher Scientific can meet
the supply requirements of diaDexus and whether these tests will be ordered by
physicians and reimbursed by public or private payers,the adequacy of
diaDexus' intellectual property rights; diaDexus' ability to satisfy its
obligations under its license agreements, to maintain its license rights under
those license agreements and to enter into any necessary licenses on
acceptable terms; diaDexus' limited revenue and cash resources; and diaDexus'
significant corporate expenses, including real estate lease liabilities and
expenses associated with being a public company. Future financing needs will
depend on diaDexus' ability to continue increasing the rate of adoption for
its products by physicians and its progress in expanding insurance coverage
for the PLAC® Test. Additional factors that could cause diaDexus' results to
differ materially from those described in the forward-looking statements can
be found in diaDexus' most recent yearly report on Form 10-K and other reports
filed with the Securities and Exchange Commission, and available at the SEC's
web site at www.sec.gov. The information set forth herein speaks only as of
the date hereof, and except as required by law, diaDexus disclaims any
intention and does not assume any obligation to update or revise any forward
looking statement, whether as a result of new information, future events or



(In thousands, except share data)

                                               Three Months Ended

                                               March 31,
                                               2014            2013
Product sales                                  $ 5,011          $ 5,460
Service revenue                                  349              —
License revenue                                  75               76
Royalty revenue                                 —               18
Total revenues                                   5,435            5,554
Operating costs and expenses:
Product and service costs                        1,638            1,825
Sales and marketing                              2,481            1,950
Research and development                         3,041            1,116
General and administrative                      2,143           1,980
Total operating costs and expenses              9,303           6,871
Loss from operations                             (3,868     )     (1,317     )
Interest income, interest expense and other
income (expense), net:
Interest income                                  1                2
Interest expense                                 (219       )     (93        )
Other income (expense), net                     (2         )    243
Loss before income tax                           (4,088     )     (1,165     )
Income tax                                      (12        )    (5         )
Net loss                                       $ (4,100     )   $ (1,170     )
Basic and diluted net loss per share:          $ (0.07      )   $ (0.02      )
Weighted average shares used in computing       54,771,788      53,903,634
basic and diluted net loss per share



(In thousands)

                                                 March 31,      December 31,
                                                 2014           2013
Current assets:
Cash and cash equivalents                        $ 13,849       $  16,847
Accounts receivable                                2,913           3,027
Inventories                                        216             460
Prepaid expenses and other current assets         948            845
Total current assets                               17,926          21,179
Restricted cash                                    1,400           1,400
Property and equipment, net                        933             968
Other long-term assets                            82             100
Total assets                                     $ 20,341       $  23,647
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable                                 $ 669          $  611
Notes payable, current portion                     2,770           2,763
Deferred revenues, current portion                 151             228
Deferred rent, current portion                     70              51
Unfavorable lease obligation                       727             697
Accrued and other current liabilities             3,633          2,203
Total current liabilities                          8,020           6,553
Non-current portion of notes payable               6,351           7,047
Non-current portion of deferred rent               304             336
Non-current portion of unfavorable lease           1,580           1,777
Other long term liabilities                       446            414
Total liabilities                                  16,701          16,127
Stockholders’ equity:
Preferred stock                                    —               —
Common stock                                       548             548
Additional paid-in capital                         207,088         206,868
Accumulated deficit                               (203,996 )     (199,896  )
Total stockholders’ equity                        3,640          7,520
Total liabilities and stockholders’ equity       $ 20,341       $  23,647


diaDexus, Inc.
Brian E. Ward, Ph.D., CEO, 650-246-6400
Jean-Frédéric Viret, Ph.D., CFO, 650-246-6400
Investor/Media Relations:
Nicole Foderaro, 415-946-1058
Press spacebar to pause and continue. Press esc to stop.