SAN DIEGO, Aug. 5, 2015 /PRNewswire/ -- Sequenom, Inc.
(NASDAQ: SQNM), a life sciences company committed to enabling
healthier lives through the development of innovative products and
services, today reported total revenues of $32.8 million for the second quarter of 2015, a
decrease of 18% compared to revenues of $39.8 million for the second quarter of
2014. Revenues for the second quarter of 2014 included
approximately $6.1 million of
incremental "catch-up" payments from payors for services performed
in prior periods, as well as the incremental change for the
conversion from cash to accrual accounting for certain payors. No
significant catch-up collections were received in the second
quarter of 2015, as the timeliness of collections has improved with
additional payor contracts. Sequenom now has coverage for 172
million commercial lives and 40 million lives under Medicaid
programs. The second quarter of 2015 had lower diagnostic services
revenues compared to the second quarter of 2014 by approximately
$3 million, associated with the
conversion of a referring laboratory partner to a patent pool
licensee.
License revenues increased to $1.9
million for the second quarter of 2015, compared to
$0.4 million for the second quarter
of 2014, reflecting the increase in test fees under the Pooled
Patents Agreement that was signed in December 2014.
Cash burn for the second quarter of 2015 was $2.9 million, compared to $4.1 million in the same period of 2014.
The second quarter 2015 cash burn excludes payment of costs related
to the convertible debt exchange of $1.6
million. The loss from continuing operations before
income taxes decreased by 41% to $9.0
million for the second quarter of 2015 as compared to
$15.3 million for the second quarter
of 2014.
"We are pleased with the improvement in our operations and cash
burn," said Bill Welch, President
and Chief Executive Officer of Sequenom, Inc. "As expected,
we increased revenues from global patent pool licensees while we
saw a decline in test volume from some referring laboratory
partners as they entered the patent pool."
Diagnostic services revenues are recorded primarily on a cash
basis with accrual accounting used for several third-party payors
and for client bill arrangements. In total, over 36% of
Sequenom's diagnostic services revenues in the second quarter of
2015 are accounted for on the accrual basis of accounting.
Total patient samples accessioned decreased by 12% to 44,400
patient samples during the second quarter of 2015, compared to the
prior year second quarter. Approximately 36,400 of those
patient samples accessioned were for the MaterniT21®
PLUS laboratory-developed test (LDT), which is a decrease in
testing volume of 11% compared to the second quarter of 2014.
This decline primarily reflects the strategic shift of certain
business from direct testing to tests performed by a licensee, for
which Sequenom receives license revenues. MaterniT21 PLUS test
sample volume, after excluding this shift of samples, declined
slightly in the second quarter of 2015.
Gross margin for the second quarter of 2015 was 49%, as compared
to gross margin of 44% for the second quarter of 2014. This
improvement is attributable primarily to the improved cost
efficiencies in processing patient samples. Total cost of
revenues decreased to $16.6 million
for the second quarter of 2015, compared to $22.4 million for the prior year period.
Cost of revenues decreased primarily due to the change in
volume and continued cost improvements to Sequenom Laboratories'
existing tests.
Total operating expenses excluding cost of revenues for the
second quarter of 2015 were $23.2
million, as compared to total operating expenses of
$30.6 million for the second quarter
of 2014. The decrease is mainly due to reductions in
litigation expense, research and development expense, facilities
expense, and stock compensation expense, partially offset by the
increase of $1.6 million due to the
convertible note exchange transaction costs.
The operating loss for the second quarter of 2015 was
$7.0 million, as compared to a loss
of $13.2 million for the same period
in 2014. Net loss from continuing operations for the second
quarter of 2015 was $9.0 million or
$0.08 per diluted share, as compared
to a net loss of $8.4 million, or
$0.07 per share, for the same period
in 2014.
Unrecorded accounts receivable for tests performed are estimated
to be $27 to $30 million as of
June 30, 2015. This range has
declined by $2 million, compared to
the estimates in the prior quarter.
As of June 30, 2015, total cash,
cash equivalents, and marketable securities were $86.8 million.
Operational updates and highlights:
- There are now 32 participants in the patent pool, including
Sequenom and Illumina. Many of those licensees are in the process
of developing and validating a noninvasive prenatal test to be
performed in their own laboratories.
- Sequenom Laboratories announced the launch of the
MaterniT™ GENOME test for the third quarter. Initial
performance data was shared at the 19th International
Conference on Prenatal Diagnosis and Therapy (ISPD) in Washington D.C.
- During the quarter, a peer-reviewed article published in
Prenatal Diagnosis reported on Sequenom Laboratories'
clinical experience with microdeletion testing, with positive
predictive values (PPVs) ranging between 60% and >99%. The PPVs
for microdeletions included in the MaterniT21 PLUS test are far
superior to the PPVs of competitive NIPT tests, which average from
5% to 31% according to information available in the public
domain.
- Sequenom made significant progress in its oncology program and
remains on track to launch a liquid biopsy test for research use in
the second half of 2015.
Non-GAAP Financial Measures
"GAAP" refers to financial information presented in accordance
with generally accepted accounting principles in the United States. To supplement the condensed
consolidated financial statements and discussion presented on a
GAAP basis, this press release includes non-GAAP financial measures
with respect to the quarter ended June 30,
2015. Management uses non-GAAP financial measures because it
believes that a cash flow metric incorporating cash used by
operations and certain other uses of cash are important to
understand the cash requirements of the business. The Company
reported cash burn as a non-GAAP financial measure. This non-GAAP
financial measure is not in accordance with or an alternative to
GAAP.
Management uses cash burn to evaluate performance compared to
forecasts. Cash burn is calculated as the sum of net cash
used by operating activities plus purchases of property, equipment
and leasehold improvements, and payments on long-term obligations,
less cash paid for the convertible debt exchange costs. The
reconciliations of cash used by operating activities, the GAAP
measure most directly comparable to cash burn, is provided on the
attached schedule.
Conference Call Information
A conference call to discuss the second quarter results will
take place today, August 5, at
5:00 p.m. EDT (2:00 p.m. PDT) and will be webcast live on the
Sequenom Website. To access the live teleconference call, dial
877-883-0383 in the U.S. and Canada, and 412-902-6506 for other
international callers. Please use code 4868059. For
interested parties unable to listen to the live conference call, a
replay will be available through Friday,
September 4, 2015. The replay will be accessible by dialing
877-344-7529 or 412-317-0088 international toll or Canada toll free at 855-669-9658, and entering
the conference number 10069178.
The conference call webcast is also accessible through the
"Invest" section of the Sequenom website at
www.sequenom.com/invest. An online replay will be available
following the initial broadcast until Friday, September 4, 2015.
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) is committed to enabling healthier
lives through the development of innovative products and
services. The Company serves patients and physicians by
providing early patient management information. To learn how
Sequenom is interpreting the genome to improve your life, visit
www.sequenom.com.
About Sequenom Laboratories
Sequenom Laboratories, a CAP-accredited and CLIA-certified
molecular diagnostics laboratory, has developed a broad range of
laboratory tests, with a focus principally on prenatal care.
Branded under the names HerediT™, HerediT™ UNIVERSAL, MaterniT™
GENOME, MaterniT21® PLUS, NextView™,
SensiGene® and VisibiliT™, these molecular genetic
laboratory-developed tests provide early patient management
information for obstetricians, geneticists, and maternal fetal
medicine specialists. Sequenom Laboratories is changing the
landscape in genetic diagnostics using proprietary cutting edge
technologies. Visit www.laboratories.sequenom.com and follow
@SequenomLabs.
SEQUENOM®, HerediT™, MaterniT™
GENOME, MaterniT21® PLUS, NextView™,
SensiGene®, VisibiliT™ and Sequenom Laboratories are
trademarks of Sequenom, Inc. All other trademarks and service
marks are the property of their respective owners.
Forward-Looking Statements
Statements contained in this press release regarding matters
that are not historical facts are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including statements regarding the development of
innovative products and services, the anticipated launch of the
MaterniT™ GENOME test in the third quarter and the
anticipated launch of a liquid biopsy test for research use in the
second half of 2015. Because such statements are subject to
risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking
statements. Risks are described more fully in the Company's
filings with the Securities and Exchange Commission, including
without limitation the Company's most recent Quarterly Report on
Form 10-Q and other documents subsequently filed with or furnished
to the Securities and Exchange Commission. All
forward-looking statements contained in this press release speak
only as of the date on which they were made. The Company
undertakes no obligation to update such statements to reflect
events that occur or circumstances that exist after the date on
which they were made.
SEQUENOM,
INC.
|
CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
|
(Unaudited)
|
(In thousands,
except per share information)
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
Diagnostic services,
net
|
$
|
30,891
|
|
$
|
39,380
|
|
$
|
66,595
|
|
$
|
76,100
|
License
|
1,875
|
|
402
|
|
3,977
|
|
743
|
Total
revenues
|
32,766
|
|
39,782
|
|
70,572
|
|
76,843
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
revenues
|
16,595
|
|
22,410
|
|
35,902
|
|
45,180
|
Selling and
marketing
|
8,359
|
|
7,920
|
|
16,845
|
|
16,479
|
Research and
development
|
5,652
|
|
7,087
|
|
11,520
|
|
13,876
|
General and
administrative
|
8,511
|
|
14,590
|
|
17,186
|
|
27,070
|
Restructuring costs
and other charges
|
656
|
|
975
|
|
656
|
|
1,885
|
Total costs and
expenses
|
39,773
|
|
52,982
|
|
82,109
|
|
104,490
|
Gain on pooled patents
agreement
|
—
|
|
—
|
|
21,000
|
|
—
|
Operating income
(loss)
|
(7,007)
|
|
(13,200)
|
|
9,463
|
|
(27,647)
|
Interest and other
expense, net
|
(1,958)
|
|
(2,092)
|
|
(4,067)
|
|
(4,190)
|
Earnings (loss) from
continuing operations before income taxes
|
(8,965)
|
|
(15,292)
|
|
5,396
|
|
(31,837)
|
Income tax benefit
(expense)
|
(48)
|
|
6,928
|
|
(124)
|
|
6,804
|
Earnings (loss) from
continuing operations
|
(9,013)
|
|
(8,364)
|
|
5,272
|
|
(25,033)
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Earnings from discontinued
operations, net of tax
|
—
|
|
12,817
|
|
—
|
|
13,812
|
Net earnings
(loss)
|
$
|
(9,013)
|
|
$
|
4,453
|
|
$
|
5,272
|
|
$
|
(11,221)
|
|
|
|
|
|
|
|
|
Net earnings
(loss) per common share, basic
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.08)
|
|
$
|
(0.07)
|
|
$
|
0.04
|
|
$
|
(0.22)
|
Discontinued
operations
|
$
|
—
|
|
$
|
0.11
|
|
$
|
—
|
|
$
|
0.12
|
Net earnings
(loss)
|
$
|
(0.08)
|
|
$
|
0.04
|
|
$
|
0.04
|
|
$
|
(0.10)
|
Net earnings
(loss) per common share, diluted
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.08)
|
|
$
|
(0.07)
|
|
$
|
0.04
|
|
$
|
(0.22)
|
Discontinued
operations
|
$
|
—
|
|
$
|
0.11
|
|
$
|
—
|
|
$
|
0.12
|
Net earnings
(loss)
|
$
|
(0.08)
|
|
$
|
0.04
|
|
$
|
0.04
|
|
$
|
(0.10)
|
Shares used in
computing earnings (loss) per share
|
|
|
|
|
|
|
|
Basic
|
118,120
|
|
116,454
|
|
117,930
|
|
116,260
|
Diluted
|
118,120
|
|
116,454
|
|
118,684
|
|
116,260
|
SEQUENOM,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
June 30,
2015
|
|
December 31,
2014
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash, cash equivalents
and marketable securities
|
$ 86,766
|
|
$ 93,897
|
Accounts receivable,
net
|
5,793
|
|
9,131
|
Inventories
|
3,520
|
|
6,516
|
Other current assets
and prepaid expenses
|
6,129
|
|
12,112
|
Total current
assets
|
102,208
|
|
121,656
|
Property, equipment
and leasehold improvements, net
|
12,482
|
|
15,348
|
Other
assets
|
21,928
|
|
24,067
|
Total
assets
|
$ 136,618
|
|
$ 161,071
|
|
|
|
|
Liabilities and
stockholders' deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
6,054
|
|
$
6,089
|
Accrued
expenses
|
15,127
|
|
22,155
|
Long-term debt and
obligations, current portion
|
374
|
|
4,144
|
Other current
liabilities
|
768
|
|
2,581
|
Deferred gain on
pooled patents agreement
|
—
|
|
21,000
|
Total current
liabilities
|
22,323
|
|
55,969
|
Long-term
liabilities
|
135,341
|
|
136,266
|
Total stockholders'
deficit
|
(21,046)
|
|
(31,164)
|
Total liabilities and
stockholders' deficit
|
$ 136,618
|
|
$ 161,071
|
SEQUENOM,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
Six Months
Ended
|
|
June
30,
|
|
2015
|
|
2014
|
Operating
activities
|
|
|
|
Net earnings
(loss)
|
$
5,272
|
|
$ (11,221)
|
Adjustments to
reconcile net earnings (loss) to net cash used in operating
activities:
|
|
|
|
Gain on pooled patents
agreement
|
(21,000)
|
|
—
|
Loss from discontinued
operations, net of tax
|
—
|
|
(13,812)
|
Share-based
compensation
|
3,407
|
|
6,467
|
Depreciation and
amortization
|
5,716
|
|
6,363
|
Non-cash restructuring
costs and other charges
|
386
|
|
1,885
|
Other non-cash
items
|
576
|
|
568
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
3,338
|
|
(2,987)
|
Inventories
|
2,996
|
|
6,592
|
Prepaid expenses and
other assets
|
(475)
|
|
(144)
|
Accounts payable and
accrued expenses
|
(7,047)
|
|
(4,928)
|
Deferred taxes
(benefit)
|
342
|
|
(6,816)
|
Other
liabilities
|
(1,857)
|
|
(153)
|
Net cash used in
operating activities of continuing operations
|
(8,346)
|
|
(18,186)
|
Investing
activities
|
|
|
|
Purchases of
property, equipment and leasehold improvements
|
(1,626)
|
|
(551)
|
Purchases of
marketable securities
|
(14,996)
|
|
(9,994)
|
Maturities of
marketable securities
|
15,000
|
|
14,158
|
Net cash received
from sale of segment
|
—
|
|
29,853
|
Proceeds from pooled
patents agreement
|
6,000
|
|
—
|
Change in restricted
cash
|
500
|
|
—
|
Net cash provided by
investing activities of continuing operations
|
4,878
|
|
33,466
|
Financing
activities
|
|
|
|
Payments on term loan
and capital lease obligations
|
(3,934)
|
|
(3,814)
|
Proceeds from common
stock issued under employee stock plans
|
282
|
|
885
|
Net cash used in
financing activities of continuing operations
|
(3,652)
|
|
(2,929)
|
Discontinued
operations
|
|
|
|
Net cash provided by
operating activities of discontinued operations
|
—
|
|
2,816
|
Net cash used in
investing activities of discontinued operations
|
—
|
|
(164)
|
Net cash provided by
discontinued operations
|
—
|
|
2,652
|
Effect of exchange
rate changes on cash and cash equivalents
|
(37)
|
|
—
|
Net increase
(decrease) in cash and cash equivalents
|
(7,157)
|
|
15,003
|
Cash and cash
equivalents at beginning of period
|
63,309
|
|
61,589
|
Cash and cash
equivalents at end of period
|
$ 56,152
|
|
$ 76,592
|
SEQUENOM,
INC.
|
RECONCILIATION OF
CASH BURN
|
(Unaudited)
|
(In
thousands)
|
|
Three Months Ended
June 30,
|
|
Six months ended
June 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Cash
Burn:
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
$
1,148
|
|
$
2,094
|
|
$
8,346
|
|
$ 18,186
|
Purchases of
property, equipment and leasehold improvements
|
1,337
|
|
146
|
|
1,626
|
|
551
|
Payments on long-term
obligations
|
2,025
|
|
1,908
|
|
3,934
|
|
3,814
|
Payment of
convertible note exchange transaction costs
|
(1,605)
|
|
—
|
|
(1,605)
|
|
—
|
Cash
burn(1)
|
$
2,905
|
|
$
4,148
|
|
$ 12,301
|
|
$ 22,551
|
|
|
|
|
|
|
|
|
(1) See accompanying
Non-GAAP Financial Measures section for description of
adjustments.
|
Logo - http://photos.prnewswire.com/prnh/20040415/SQNMLOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sequenom-inc-reports-financial-results-for-the-second-quarter-of-2015-300124395.html
SOURCE Sequenom, Inc.