Growth in Revenue and Test Volumes Driven
by Miscarriage Analysis and Pre-implantation
Genetic Screening; Reports Narrowed Net Loss and Strong Cash
Collections
Conference Call Begins Today at 4:30 p.m. Eastern
Time
CombiMatrix Corporation (NASDAQ:CBMX), a molecular diagnostics
company specializing in DNA-based testing services for prenatal,
miscarriage analysis and postnatal developmental disorders and
pre-implantation genetic screening (PGS) services, today reported
financial results for the three and nine months ended September 30,
2015, and provided a business update.
"We continue to perform and execute on key metrics in terms of
driving testing volumes, adding new customers, securing
reimbursement contracts, collecting cash, and entering and
developing key markets. We delivered 23% revenue growth for the
quarter as the business momentum established during the first half
of the year continued," said Mark McDonough, CombiMatrix President
and CEO. "Test volumes for our reproductive health services
increased 37% and were driven by strong uptake in our PGS tests for
women undergoing in vitro fertilization, which is a private-pay
diagnostic service we launched in late 2014. Cash collections
remained strong at 95% of revenue, and the number of billable
customers increased to 234 for the quarter, up 34% from a year
ago."
Among the Company's recent highlights, in August CombiMatrix
announced that its CombiSNP™ Array for Prenatal Diagnosis was
approved by the New York Department of Health (NYDOH), thereby
opening a significant market opportunity. The Company secured five
new contracts with major insurance carriers, adding more than 14
million covered lives and bringing the total number of covered
lives under contract to approximately 170 million. Additionally,
results of a CombiMatrix-sponsored study supporting the use of
follow-up diagnostic testing to confirm non-invasive prenatal
testing for both chromosomal aneuploidies and microdeletions were
presented at a leading scientific conference.
"Our outlook is for continued revenue and volume growth driven
by effective implementation of our commercial strategy. We are
seeing particularly strong growth in reproductive health, notably
in miscarriage analysis and pre-implantation genetic screening, and
believe we are well positioned to benefit from continued
opportunities as we focus on these services," added Mr. McDonough.
"In addition, in the third quarter we completed training of the 10
sales representatives who were hired during the second quarter of
this year and we expect increased productivity from the expanded
salesforce in the coming months. We are also seeing accretive
revenue contribution from the three new products that we launched
over the past year, which is exciting and encouraging."
Third Quarter Financial and Operational
Highlights (all comparisons are with the third quarter of
2014)
- Total revenues of $2.5 million, up 23%
- Reproductive health revenues of $1.7 million, up 27%
- Reproductive health test volume of 1,265, up 37%
- Pediatric microarray diagnostic test revenue and volume growth
of 11% and 7%, respectively
- Number of billable customers up 34% to 234
- Cash collections of $2.4 million, up 17%
- Added 14 million lives covered from five new commercial payor
contracts
- Completed training of recent additions to sales team
|
Volumes |
Revenues
(in 000's) |
|
Q3
'15 |
Q3
'14 |
# Δ |
% Δ |
Q3
'15 |
Q3
'14 |
$ Δ |
% Δ |
Prenatal |
272 |
265 |
7 |
2.6% |
$ 368 |
$ 369 |
$ (1) |
-0.3% |
Miscarriage analysis |
866 |
660 |
206 |
31.2% |
1,145 |
944 |
201 |
21.3% |
PGS |
127 |
-- |
127 |
-- |
149 |
-- |
149 |
-- |
Subtotal - reproductive
health |
1,265 |
925 |
340 |
36.8% |
1,662 |
1,313 |
349 |
26.6% |
Pediatric |
509 |
478 |
31 |
6.5% |
558 |
501 |
57 |
11.4% |
Oncology |
-- |
17 |
(17) |
-100.0% |
-- |
23 |
(23) |
-100.0% |
Subtotal - all arrays |
1,774 |
1,420 |
354 |
24.9% |
2,220 |
1,837 |
383 |
20.8% |
Non-array tests |
721 |
539 |
182 |
33.8% |
261 |
174 |
87 |
50.0% |
Total - all tests |
2,495 |
1,959 |
536 |
27.4% |
2,481 |
2,011 |
470 |
23.4% |
Royalties |
|
|
|
|
45 |
51 |
(6) |
-11.8% |
Total revenues |
|
|
|
|
$ 2,526 |
$ 2,062 |
$ 464 |
22.5% |
Percentage of arrays |
71.1% |
72.5% |
|
-1.9% |
89.5% |
91.3% |
|
-2.0% |
|
|
|
|
|
|
|
|
|
|
Volumes |
Revenues
(in 000's) |
|
9 Mo's.
'15 |
9 Mo's.
'14 |
# Δ |
% Δ |
9 Mo's.
'15 |
9 Mo's.
'14 |
$ Δ |
% Δ |
Prenatal |
936 |
718 |
218 |
30.4% |
$ 1,214 |
$ 979 |
$ 235 |
24.0% |
Miscarriage analysis |
2,664 |
1,816 |
848 |
46.7% |
3,467 |
2,676 |
791 |
29.6% |
PGS |
157 |
-- |
157 |
-- |
189 |
-- |
189 |
-- |
Subtotal - reproductive
health |
3,757 |
2,534 |
1,223 |
48.3% |
4,870 |
3,655 |
1,215 |
33.2% |
Pediatric |
1,557 |
1,488 |
69 |
4.6% |
1,687 |
1,505 |
182 |
12.1% |
Oncology |
-- |
198 |
(198) |
-100.0% |
-- |
180 |
(180) |
-100.0% |
Subtotal - all arrays |
5,314 |
4,220 |
1,094 |
25.9% |
6,557 |
5,340 |
1,217 |
22.8% |
Non-array tests |
2,125 |
1,252 |
873 |
69.7% |
735 |
367 |
368 |
100.3% |
Total - all tests |
7,439 |
5,472 |
1,967 |
35.9% |
7,292 |
5,707 |
1,585 |
27.8% |
Royalties |
|
|
|
|
112 |
118 |
(6) |
-5.1% |
Total revenues |
|
|
|
|
$ 7,404 |
$ 5,825 |
$ 1,579 |
27.1% |
Percentage of arrays |
71.4% |
77.1% |
|
-7.4% |
89.9% |
93.6% |
|
-3.9% |
Financial Results
Three Months Ended September 30, 2015 and 2014
Total revenues for the third quarter of 2015 increased 22.5% to
$2.53 million from $2.06 million for the third quarter of 2014.
Revenues for the third quarter of 2015 were comprised of
$2.48 million of diagnostic services revenue and $45,000 in
royalties. Reproductive health diagnostic test revenue, which
includes prenatal microarrays, miscarriage analysis and PGS,
increased 27% to $1.7 million and related testing volumes increased
37% to 1,265. The third quarter 2015 revenue increase was
driven primarily by higher test volumes, particularly for
miscarriage analysis and PGS, as well as by a 34% increase in
quarterly billable customers to 234.
Total operating expenses decreased 8% to $4.2 million for the
third quarter of 2015, due primarily to lower general and
administrative expenses following the settlement of litigation in
early 2015. The Company did not incur any litigation expenses
in the third quarter of 2015, compared with $745,000 incurred
during the third quarter of 2014. The decrease in general and
administrative expenses was partially offset by an increase in cost
of services related to higher test volumes as well as an increase
in sales and marketing expenses related to salesforce
expansion. Gross margin for the third quarter of 2015 was
43.6%, compared with 43.9% for the third quarter of 2014.
As a result of higher revenues and lower operating expenses, the
Company's net loss attributable to common stockholders for the
third quarter of 2015 of $1.7 million, or $0.13 per share, improved
by $828,000 from a net loss attributable to common stockholders for
the third quarter of 2014 of $2.5 million, or $0.23 per
share.
Nine Months Ended September 30, 2015 and 2014
Total revenues for the first nine months of 2015 increased 27%
to $7.4 million from $5.8 million for the first nine months of
2014. Revenues for the first nine months of 2015 included $7.3
million in diagnostic services revenue and $112,000 in royalty
revenues.
Operating expenses for the first nine months of 2015 decreased
by $574,000 from the prior-year period due primarily to a $1.7
million reduction in general and administrative expenses. The
reduction in general and administrative expenses was driven
primarily by reduced litigation expenses, which were $114,000 in
the 2015 period compared with $2.0 million in the prior year. This
was partially offset by increased cost of services related to
higher test volumes and increased sales and marketing expenses due
to salesforce expansion. Gross margin was 44.8% for the first
nine months of 2015, compared with 44.3% for the first nine months
of 2014.
The net loss attributable to common stockholders for the first
nine months of 2015 of $6.0 million, or $0.48 per share, improved
by $1.1 million from a net loss attributable to common stockholders
for the first nine months of 2014 of $7.1 million, or $0.64 per
share. This improvement occurred despite the recognition in
the first nine months of 2015 of an $890,000 non-cash, deemed
dividend related to the issuance of Series E convertible preferred
stock to investors as part of the $4.9 million equity financing
completed in February 2015.
The Company reported $5.5 million in cash, cash equivalents and
short-term investments as of September 30, 2015, compared with $5.2
million as of December 31, 2014. The Company used $1.5 million
and $4.2 million in cash to fund operating activities during the
quarter and nine months ended September 30, 2015, respectively,
compared with $2.6 million and $6.6 million to fund operating
activities during the comparable 2014 periods,
respectively. The significant decreases in net cash used to
fund operating activities for the 2015 periods resulted from lower
litigation expenses discussed previously, coupled with improved
cash reimbursement of $2.4 million and $7.0 million for the third
quarter and nine months ended September 30, 2015, respectively,
compared with $2.0 million and $5.4 million in the comparable 2014
periods, respectively.
Conference Call and Webcast
CombiMatrix will hold an investment-community conference call
and audio webcast today beginning at 4:30 p.m. Eastern time (1:30
p.m. Pacific time). The conference call dial-in numbers are (866)
634-2258 for domestic callers and (330) 863-3454 for international
callers. A live webcast of the call will be available at
http://investor.combimatrix.com/events.cfm
A recording of the call will be available for seven days
beginning approximately two hours after the completion of the call
by dialing (855) 859-2056 for domestic callers or (404) 537-3406
for international callers, and entering passcode 63945724. The
webcast of the call will be archived for 30 days on the company's
website at http://investor.combimatrix.com/events.cfm.
About CombiMatrix Corporation
CombiMatrix Corporation provides valuable molecular diagnostic
solutions and comprehensive clinical support to foster the highest
quality in patient care. CombiMatrix specializes in
pre-implantation genetic screening, miscarriage analysis, prenatal
and pediatric diagnostics, offering DNA-based testing for the
detection of genetic abnormalities beyond what can be identified
through traditional methodologies. CombiMatrix performs genetic
testing utilizing a variety of advanced cytogenomic techniques,
including chromosomal microarray analysis, standardized and
customized fluorescence in situ hybridization (FISH) and
high-resolution karyotyping. CombiMatrix is dedicated to providing
high-level clinical support for healthcare professionals in order
to help them incorporate the results of complex genetic testing
into patient-centered medical decision making. Additional
information about CombiMatrix is available at www.combimatrix.com
or by calling (800) 710-0624.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
based upon our current expectations, speak only as of the date
hereof and are subject to change. All statements, other than
statements of historical fact included in this press release, are
forward-looking statements. Forward-looking statements can often be
identified by words such as "anticipates," "expects," "intends,"
"plans," "goal," "predicts," "believes," "seeks," "estimates,"
"may," "will," "should," "would," "could," "potential," "continue,"
"ongoing," similar expressions, and variations or negatives of
these words and include, but are not limited to, statements
regarding projected results of operations and management's future
business, operational and strategic plans, recruiting efforts and
test menu expansion. These forward-looking statements are not
guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause our actual results
to differ materially and adversely from those expressed in any
forward-looking statement. The risks and uncertainties referred to
above include, but are not limited to: our ability to successfully
expand the base of our customers, add to the menu of our diagnostic
tests, develop and introduce new tests and related reports, expand
and improve our current suite of services, optimize the
reimbursements received for our microarray testing services, and
increase operating margins by improving overall productivity and
expanding sales volumes; our ability to successfully accelerate
sales, steadily increase the size of our customer rosters in all of
our genetic testing markets; our ability to attract and retain
a qualified sales force in wider geographies; our ability to ramp
production from our sales; rapid technological change in our
markets; changes in demand for our future services; legislative,
regulatory and competitive developments; general economic
conditions; and various other factors. Further information on
potential factors that could affect our financial results is
included in our Annual Report on Form 10-K, Quarterly Reports of
Form 10-Q, and in other filings with the Securities and
Exchange Commission. We undertake no obligation to revise or update
publicly any forward-looking statements for any reason, except as
required by law.
Tables to Follow
COMBIMATRIX
CORPORATION |
CONSOLIDATED STATEMENTS
OF OPERATIONS |
(In thousands, except
share and per share information) |
(Unaudited) |
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Revenues: |
|
|
|
|
Diagnostic services |
$ 2,481 |
$ 2,011 |
$ 7,292 |
$ 5,707 |
Royalties |
45 |
51 |
112 |
118 |
Total revenues |
2,526 |
2,062 |
7,404 |
5,825 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Cost of services |
1,400 |
1,129 |
4,028 |
3,180 |
Research and development |
133 |
228 |
352 |
586 |
Sales and marketing |
1,295 |
1,191 |
3,658 |
3,186 |
General and administrative |
1,249 |
1,983 |
4,212 |
5,956 |
Patent amortization and
royalties |
25 |
28 |
75 |
88 |
Impairment of cost-basis
investment |
97 |
-- |
97 |
-- |
Total operating expenses |
4,199 |
4,559 |
12,422 |
12,996 |
Operating loss |
(1,673) |
(2,497) |
(5,018) |
(7,171) |
Other income (expense): |
|
|
|
|
Interest income |
5 |
7 |
13 |
36 |
Interest expense |
(19) |
(25) |
(59) |
(63) |
Warrant derivative gains |
-- |
-- |
-- |
152 |
Warrant modification
charge |
-- |
-- |
-- |
(44) |
Total other income
(expense) |
(14) |
(18) |
(46) |
81 |
Net loss |
$ (1,687) |
$ (2,515) |
$ (5,064) |
$ (7,090) |
|
|
|
|
|
Deemed dividends from modifying / issuing
Series E convertible preferred stock |
$ -- |
$ -- |
$ (890) |
$ -- |
Net loss attributable to common
stockholders |
$ (1,687) |
$ (2,515) |
$ (5,954) |
$ (7,090) |
|
|
|
|
|
Basic and diluted net loss per share |
$ (0.13) |
$ (0.23) |
$ (0.41) |
$ (0.64) |
Deemed dividends from issuing Series E
convertible preferred stock |
-- |
-- |
(0.07) |
-- |
Basic and diluted net loss per share
attributable to common stockholders |
$ (0.13) |
$ (0.23) |
$ (0.48) |
$ (0.64) |
|
|
|
|
|
Basic and diluted weighted average common
shares outstanding |
12,680,927 |
11,063,246 |
12,389,350 |
11,018,231 |
|
|
|
CONSOLIDATED BALANCE SHEET
INFORMATION (unaudited): |
|
|
|
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
|
|
|
Total cash, cash equivalents and short-term
investments |
$5,549 |
$5,240 |
Total assets |
$9,399 |
$8,632 |
Total liabilities |
$2,140 |
$1,512 |
Total stockholders' equity |
$7,259 |
$7,120 |
CONTACT: Company Contact:
Mark McDonough
President & CEO, CombiMatrix Corporation
(949) 753-0624
Investor Contact:
LHA
Jody Cain
(310) 691-7100
jcain@lhai.com
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