November, 2010 -- The demand for the Arrow instrument is growing beyond expectations. Sales reached 51 instruments in Q3-2010, and NorDiag expects to exceed the target for the year substantially. The recipe for the success is simple; low price and unique features. The result: New record sales in Q3 for the Sample preparation segment (previous Infectious Diseases).
NorDiag had operating revenues of NOK 25.1 million in Q3-2010, compared with NOK 27.9 million in Q3-2009. The Sample Preparation segment (previous Infectious Diseases segment) had a record quarter reaching NOK 7.5 million in operating revenues in Q3-2010, compared to NOK 5.4 million in Q3-2009; an increase of 39%. The HLA Typing segment contributed with NOK 17.5 million in operating revenues in Q3-2010, compared to NOK 22.6 million in Q3-2009. The decrease of NOK 5.1 million is mainly related to the divestment of NorDiag’s shares in Olerup Inc. in March 2010.
Gross margin related to operating revenues was 29% in Q3-2010, on par with the same period last year. The gross margin for the Sample Preparation segment decreases from 52% in Q3-2009 to 33% in Q3-2010. This is attributable to product and sale channels mix. “The sales of the Arrow instrument to OEM-partner have been exceptional high this quarter, which is good news and fully intended,” comments Wigstøl, “on the other hand, this will put some pressure on margins.” He elaborates:”We will continue to seek increasing sales volume, but focus more on elevating margins going forward. A 12 month margin program for the Arrow product line is started and on track, including a new automated production line for kits. We are also focusing on the other sales channels (direct, distributors, HLA market) and expect good traction here as well going forward.
Reorganizing for further growth Following the fast success of the Arrow technology, the organizational focus is shifted from R&D to sales, production and customer support. Guttorm Osborg is hired as VP Instruments and Automation from January 1, 2011. He comes from the position as director for development, production and service of instruments within the in-vitro diagnostics in Axis Shield PoC. Furthermore, the sales organization for Scandinavia and Europe is reorganized and strengthened. In US, Timothy W. Murray has been appointed as a new General Manager from November 16, 2010. He has held various positions within business development, sales and marketing in diagnostics companies like Luminex, Cenetron, Bayer Diagnostics, and comes to NorDiag from Sequenom Center for Molecular Medicine. – It is extremely important to show our customers that we can give them support at same level as other international players, and we are very pleased to sign world class competence to the company, says Mårten Wigstøl.
Outlook NorDiag is on track to reach a break even quarter in 2011 as previously expressed. The Company expects sales to grow further and margin improvements next quarters. Bullet and kit sales are expected to pick up.
Contact: CEO Mårten Wigstøl Phone. +47 911 65775 CFO Tone Kvåle Phone: +47 915 19576
About NorDiag: NorDiag is a biotechnology company developing, manufacturing and marketing automated solutions (instruments and tests) for sample preparation of DNA from difficult biological samples. DNA diagnostics give more rapid and precise answers, and are the fastest growing field within diagnostics. The company’s sample preparation solutions are today used in connection with STI, tuberculosis, MRSA, respiratory pathogens and viruses on instruments for large and small laboratories. NorDiag was founded in 2003 and has its headquarters in Oslo, Norway. The company has offices and laboratories in Stockholm, Sweden, in West Chester (PA), USA and in Vienna, Austria. The group has today 38,4 man-labour years. NorDiag is listed on Oslo Stock Exchange with ticker NORD. For further information - www.nordiag.com.
