SAN DIEGO, May 4, 2016 /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 $27.6 million, total accessioned units of 46,400,
and a net loss of $13.4 million, or
$0.11 per basic and diluted share,
for the first quarter of 2016.
"During the quarter, we executed on a number of key initiatives
designed to return Sequenom to sustainable growth, resulting in
quarter over quarter growth in our unit volume," said Dirk van den Boom, Ph.D., President and CEO of
Sequenom. "Overall, we made meaningful progress toward
achieving our goal of becoming financially self-sustaining while
solidifying our position as a leader in reproductive health."
Operational Updates
To date in 2016, Sequenom and Sequenom Laboratories™
made significant progress on several key corporate objectives:
- Total tests accessioned in the first quarter of 2016 reflect
growth of 10% in test volume compared to the fourth quarter of
2015. Sequenom Laboratories' total noninvasive prenatal test
(NIPT) accessions in the first quarter of 2016 were up 3,900 units
sequentially from the fourth quarter of 2015, for growth of
11%;
- Completed the consolidation of Sequenom Laboratories'
North Carolina laboratory location
into the San Diego laboratory
location;
- Enhanced San Diego laboratory
productivity and restructured other key functions, consistent with
the annualized cost reduction goal of greater than $20 million before the end of 2016;
- Negotiated in-network contracts with Anthem Blue Cross and Blue
Shield Health Plans for 11 states. Sequenom Laboratories has
coverage for over 200 million commercial lives and 46 million lives
under Medicaid programs;
- Filed a writ of certiorari asking the U.S. Supreme Court to
decide if the claims of Sequenom's '540 patent are directed to
patent-eligible subject matter;
- Launched Sequenom Laboratories' testing portfolio into the
average-risk pregnancy market and optimized its sales approach to
better serve the obstetrician channel; and
- Introduced a multi-faceted physician and patient customer
experience program that seeks to provide a best-in-class experience
at every step of the customer journey.
First Quarter 2016 Results
First quarter 2016 revenues of $27.6
million declined 27% from $37.8
million in the first quarter of 2015. Revenues and
unit volumes in the first quarter of 2016 were lower than the first
quarter of 2015, primarily reflecting the conversion of certain
laboratory customers to licensee status under the Pooled Patents
Agreement, and a smaller amount available to collect during the
first quarter of 2016 for testing services performed in prior
periods. This latter factor reflects the improvement in the
timeliness of Sequenom Laboratories collections as a result of
additional payor contracts. These changes resulted in
approximately $10 million in net
revenue reduction for the first quarter of 2016 compared to the
first quarter of 2015.
Total patient samples accessioned decreased by 12% to 46,400
patient samples during the first quarter of 2016, compared to the
prior year's first quarter. Approximately 41,200 of those
patient samples accessioned were for NIPT, including the
MaterniT® 21 PLUS, VisibiliT™ and
MaterniT® GENOME laboratory-developed tests, which is a
9% decrease in testing volume compared to the first quarter of
2015. The decrease in tests accessioned was driven by the
conversions of laboratory customers to licensee status, as
described above, partially offset by the increase in tests
accessioned for patients in the average-risk pregnancy
market.
The total volume of tests from Sequenom's core business
increased by 7% over the first quarter of 2015, largely as a result
of Sequenom Laboratories' entry into the average-risk pregnancy
market. In this press release, "core business" refers to
Sequenom's revenue and unit volume excluding the effect of the
conversion of certain laboratory customers to licensee status in
2015. Notably, the volume of NIPT tests in Sequenom's core
business, which includes average-risk pregnancies, increased by 14%
for the first quarter of 2016 over the first quarter of 2015.
License revenue was $2.2 million
in the first quarter of 2016, compared to $2.1 million for the first quarter of 2015, and
$2.3 million in the fourth quarter of
2015. Sequenom continues to expect a total of $10 million in license fee revenue for
2016.
Total cost of revenues decreased to $16.8
million for the first quarter of 2016, compared to
$19.3 million for the prior year
period. Cost of revenues decreased primarily due to the
decrease in test volumes as a result of the conversion of certain
laboratory customers to licensee status.
Gross margin for the first quarter of 2016 was 39% compared to
gross margin of 49% for the first quarter of 2015. The effect
of laboratory customers who converted to licensee status, costs
associated with Sequenom Laboratories' laboratory consolidation and
restructuring, the impact of entering the average-risk pregnancy
market and increased MaterniT GENOME volume largely drove the
decrease. Incremental costs related to the laboratory
consolidation reduced gross margin for the first quarter of 2016 by
3%. Sequenom continues to expect gross margin to increase for
the remaining quarters of 2016.
Total operating expenses for the first quarter of 2016 were
$22.1 million, compared to
$23.0 million for the first quarter
of 2015. Total operating expenses for the first quarter of
2016 were up only slightly from total operating expenses of
$21.9 million for the fourth quarter
of 2015, due to the costs associated with Sequenom Laboratories'
laboratory consolidation and other restructuring activities, which
offset the benefit of reduced spending for research and development
and general and administrative activities.
Operating loss for the first quarter of 2016 was $11.4 million, compared to operating income of
$16.5 million for the same period in
2015. Operating and net income for the first quarter of 2015
included a $21.0 million gain on the
Pooled Patents Agreement with Illumina. Net loss for the
first quarter of 2016 was $13.4
million or $0.11 per basic and
diluted share, as compared to net income of $14.3 million, or $0.11 per diluted share, and $0.12 per basic share for the same period in
2015.
Cash burn for the first quarter of 2016 was $10.4 million, compared to $9.4 million in the same period of 2015 and
$4.7 million in the fourth quarter of
2015. Cash burn increased in the first quarter of 2016
primarily due to reduced revenue collected for testing services
performed in prior periods and delays in collections related to the
launch of tests into the average-risk pregnancy market. Cash
burn in the first quarter also included semi-annual interest
payments on Sequenom's convertible debt.
Unrecorded accounts receivable for tests performed and
recognized on a cash basis are estimated to be $16 million to $18 million as of March 31, 2016, the same as the estimate as of
December 31, 2015.
As of March 31, 2016, cash, cash
equivalents, and marketable securities totaled $66.1 million.
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 March 31, 2016. Management uses non-GAAP
financial measures because it believes that a cash flow metric
incorporating cash used in 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 in operating activities, purchases of property, equipment and
leasehold improvements, and payments on long-term obligations.
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 hosted by Dr. Dirk van
den Boom, President and CEO of Sequenom, and other members
of senior management, will take place on Wednesday, May 4, 2016, at 5:00 p.m. ET (2:00 p.m.
PT) and will be webcast live on the Sequenom website.
Call participants should dial 877-883-0383 (U.S. / Canada) or 412-902-6506 (other countries).
Please use code 4043466. A telephonic replay will be
available through June 3, 2016 by
dialing 877-344-7529 (US toll free), 855-669-9658 (Canada toll free), or 412-317-0088
(international toll), and entering the conference number
10085264.
The conference call webcast is also accessible through the
"Investors" section of the Sequenom website at
http://sequenom.investorroom.com/webcasts
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) is a pioneering genetic testing
company dedicated to women's health through the development of
innovative products and services. The Company serves patients
and physicians by providing early patient management
information. For more information, 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,
MaterniT® 21 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, MaterniT® 21PLUS,
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 initiatives designed to
return Sequenom to sustainable growth, Sequenom's goal of becoming
financially self-sustaining, solidifying Sequenom Laboratories'
position as a leader in reproductive health and a multi-faceted
physician and patient customer experience program that seeks to
provide a best-in-class experience at every step of the customer
journey. 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 Sequenom's filings with the
Securities and Exchange Commission, including without limitation
Sequenom's most recent Annual Report on Form 10-K, Sequenom's most
recent Quarterly Reports on Form 10-Q, Sequenom's most recently
filed Current Reports on Form 8-K 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.
Sequenom 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
|
|
March 31,
2016
|
|
March 31,
2015
|
Revenues:
|
|
|
|
Diagnostic services,
net
|
$
|
25,410
|
|
|
$
|
35,703
|
|
License
|
2,160
|
|
|
2,102
|
|
Total
revenues
|
27,570
|
|
|
37,805
|
|
Costs and
expenses:
|
|
|
|
Cost of
revenues
|
16,804
|
|
|
19,306
|
|
Selling and
marketing
|
8,510
|
|
|
8,486
|
|
Research and
development
|
4,901
|
|
|
5,869
|
|
General and
administrative
|
7,854
|
|
|
8,676
|
|
Restructuring
costs
|
859
|
|
|
—
|
|
Total costs and
expenses
|
38,928
|
|
|
42,337
|
|
Gain on pooled
patents agreement
|
—
|
|
|
21,000
|
|
Operating (loss)
income
|
(11,358)
|
|
|
16,468
|
|
Interest
expense
|
(2,057)
|
|
|
(1,994)
|
|
Interest
income
|
38
|
|
|
11
|
|
Other income
(expense), net
|
23
|
|
|
(125)
|
|
(Loss) income before
income taxes
|
(13,354)
|
|
|
14,360
|
|
Income tax
expense
|
(95)
|
|
|
(76)
|
|
Net (loss)
income
|
$
|
(13,449)
|
|
|
$
|
14,284
|
|
|
|
|
|
Net (loss) income
per common share, basic
|
|
|
|
Net (loss) income per
share
|
$
|
(0.11)
|
|
|
$
|
0.12
|
|
Weighted average
number of shares outstanding, basic
|
118,859
|
|
|
117,737
|
|
|
|
|
|
Net (loss)
income per common share, diluted
|
|
|
|
Net (loss) income per
share
|
$
|
(0.11)
|
|
|
$
|
0.11
|
|
Weighted average
number of shares outstanding, diluted
|
118,859
|
|
|
146,642
|
|
SEQUENOM,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
|
|
March 31,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash, cash
equivalents, and marketable securities
|
$
|
66,057
|
|
|
$
|
76,170
|
|
Accounts receivable,
net
|
6,950
|
|
|
6,421
|
|
Inventories
|
2,994
|
|
|
2,417
|
|
Other current assets
and prepaid expenses
|
2,960
|
|
|
2,943
|
|
Total current
assets
|
78,961
|
|
|
87,951
|
|
Property, equipment,
and leasehold improvements, net
|
7,651
|
|
|
10,059
|
|
Other
assets
|
18,004
|
|
|
18,718
|
|
Total
assets
|
$
|
104,616
|
|
|
$
|
116,728
|
|
|
|
|
|
Liabilities and
stockholders' deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
7,078
|
|
|
$
|
5,234
|
|
Accrued
expenses
|
12,523
|
|
|
15,368
|
|
Long-term debt and
obligations, current portion
|
311
|
|
|
316
|
|
Other current
liabilities
|
578
|
|
|
589
|
|
Total current
liabilities
|
20,490
|
|
|
21,507
|
|
Long-term
liabilities
|
134,054
|
|
|
133,619
|
|
Total stockholders'
deficit
|
(49,928)
|
|
|
(38,398)
|
|
Total liabilities and
stockholders' deficit
|
$
|
104,616
|
|
|
$
|
116,728
|
|
SEQUENOM,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
March 31,
2016
|
|
March 31,
2015
|
Operating
activities
|
|
|
|
Net (loss)
income
|
$
|
(13,449)
|
|
|
$
|
14,284
|
|
Adjustments to
reconcile net (loss) income to net cash used in operating
activities:
|
|
|
|
Share-based
compensation
|
1,694
|
|
|
1,542
|
|
Depreciation and
amortization
|
2,175
|
|
|
2,892
|
|
Other non-cash
items
|
343
|
|
|
236
|
|
Gain on pooled
patents agreement
|
—
|
|
|
(21,000)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(529)
|
|
|
1,468
|
|
Inventories
|
(148)
|
|
|
1,737
|
|
Prepaid expenses and
other assets
|
761
|
|
|
578
|
|
Accounts payable and
accrued expenses
|
(1,066)
|
|
|
(7,715)
|
|
Other
liabilities
|
146
|
|
|
(1,220)
|
|
Net cash used in
operating activities
|
(10,073)
|
|
|
(7,198)
|
|
|
|
|
|
Investing
activities
|
|
|
|
Purchases of
property, equipment and leasehold improvements
|
(200)
|
|
|
(289)
|
|
Purchases of
marketable securities
|
(9,967)
|
|
|
(10,007)
|
|
Maturities and sales
of marketable securities
|
15,009
|
|
|
10,052
|
|
Proceeds from pooled
patents agreement
|
—
|
|
|
6,000
|
|
Net cash provided by
investing activities
|
4,842
|
|
|
5,756
|
|
|
|
|
|
Financing
activities
|
|
|
|
Payments on term loan
and capital lease obligations
|
(87)
|
|
|
(1,909)
|
|
Proceeds from common
stock issued under employee stock plans
|
223
|
|
|
177
|
|
Net cash provided by
(used in) financing activities
|
136
|
|
|
(1,732)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
—
|
|
|
(45)
|
|
Net decrease in cash
and cash equivalents
|
(5,095)
|
|
|
(3,219)
|
|
Cash and cash
equivalents at beginning of period
|
50,344
|
|
|
63,309
|
|
Cash and cash
equivalents at end of period
|
$
|
45,249
|
|
|
$
|
60,090
|
|
SEQUENOM,
INC.
|
RECONCILIATION OF
CASH BURN
|
(Unaudited)
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
March 31,
2016
|
|
March 31,
2015
|
Cash
Burn:
|
|
|
|
Net cash used in
operating activities
|
$
|
10,073
|
|
|
$
|
7,198
|
|
Purchases of
property, equipment and leasehold improvements
|
200
|
|
|
289
|
|
Payments on term loan
and capital lease obligations
|
87
|
|
|
1,909
|
|
Cash burn
(1)
|
$
|
10,360
|
|
|
$
|
9,396
|
|
|
|
|
|
(1) See accompanying
Non-GAAP Financial Measures section for description of
adjustments
|
Logo - http://photos.prnewswire.com/prnh/20160225/337675LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sequenom-inc-reports-first-quarter-2016-results-300262977.html
SOURCE Sequenom, Inc.