SAN DIEGO, March 7, 2012 /PRNewswire/ -- Sequenom, Inc. (NASDAQ: SQNM), a life sciences company providing innovative genetic analysis solutions, today reported total revenues of $15.5 million and $55.9 million for the fourth quarter and full-year of 2011, respectively. Net loss was $22.2 million, or $0.22 per share, and $74.2 million, or $0.75 per share, for the fourth quarter and full-year, respectively.
“2011 was a pivotal year for Sequenom as the Sequenom Center for Molecular Medicine launched its cornerstone MaterniT21(TM) prenatal laboratory-developed test and advanced a number of other important programs,” said Harry F. Hixson, Chairman and CEO of Sequenom, Inc. “The positive uptake from the launch of the MaterniT21 LDT and increasing early volumes for testing services since has set the tone for our expected growth and expansion during 2012.”
Fourth Quarter 2011 Performance
Fourth quarter revenues of $15.5 million in 2011 increased 13% over revenues of $13.8 million for the comparable period in 2010. Fourth quarter 2011 revenues from the genetic analysis operating segment were essentially flat year-over-year, while revenues from the Sequenom Center for Molecular Medicine (Sequenom CMM) diagnostics services operating segment grew more than 130% in the fourth quarter of 2011 from the prior year period.
Gross margin for the fourth quarter of 2011 was 46% as compared to gross margin of 62% for the fourth quarter of 2010. This difference reflects the increased costs associated with the nationwide launch of the MaterniT21(TM) LDT during the fourth quarter, in October of 2011.
Total operating expenses for the fourth quarter of 2011 were $29.0 million, as compared to total operating expenses of $30.7 million for the fourth quarter of 2010. Research and development expenses increased $2.6 million to $13.1 million for the fourth quarter of 2011, a change associated primarily with higher labor costs and an increase in consumables associated with additional T21 clinical studies. Selling and marketing expenses increased by $1.1 million to $9.1 million for the fourth quarter of 2011, resulting primarily from higher labor costs associated with the expansion of the Sequenom CMM sales force and the CLIA laboratory. Total stock-based compensation expense was $2.8 million for the fourth quarter of 2011, consistent with the $2.8 million in stock-based compensation recorded for the fourth quarter of 2010.
“Our 2011 year end results are demonstrative of our commitment to delivering on the priorities set early in the year. We met the major goals of our strategic plan, managing costs while establishing the groundwork for continued commercial expansion,” said Paul V. Maier, Sequenom’s CFO. “We have set new goals and are focusing on accelerating our growth and expansion in a number of important areas to maintain this positive trajectory in 2012. As a result of our recent financing, we are well capitalized to implement our expansion plans.”
Full-Year 2011 Performance
The Company reported revenues of $55.9 million for the full-year 2011, an increase of 18% compared to revenues of $47.5 million for the full-year 2010. The Company will continue to account for product revenue from our diagnostic testing services on a cash basis until further experience is gained and additional internal and third party controls are established that will allow a reasonable estimate of collectable amounts to be made before moving to the accrual method of accounting.
Net loss for the full-year 2011 was $74.2 million or $0.75 per share, as compared to net loss of $120.8 million, or $1.69 per share for 2010.
Gross margin for the full-year 2011 was 58% of revenues, decreasing 2% as compared to gross margin for the full-year 2010. Gross margin for the full-year 2011 reflects a change in the mix of product sales from the genetic analysis operating segment, and an increased proportion of diagnostic revenues at lower margins.
Total operating expenses for the full-year 2011 were $106.9 million, as compared to total expenses of $149.5 million for 2010. This reduction was primarily the result of a decrease in litigation settlement expense of $55.4 million during 2010, which did not recur in 2011.
Research and development expenses increased to $53.6 million for the full-year 2011 from $43.4 million in 2010. The incremental expense is related primarily to higher labor costs associated with the expansion of the Sequenom CMM CLIA laboratory and development activities related to the launch of the MaterniT21 LDT in the fourth quarter of 2011. Selling and marketing expenses increased by $2.7 million to $31.1 million for the full-year 2011, due primarily to higher labor costs associated with the expansion of the prenatal and retinal specialty sales forces. Total stock-based compensation expense was $12.1 million for the full-year 2011, an increase from the $11.5 million recorded during the full-year 2010.
As of December 31, 2011, the Company’s total cash, cash equivalents and marketable securities were $84.2 million. Net cash used in operating activities was $51.3 million for the full-year 2011, while purchases of capital equipment for the same period totaled $16.2 million, funded primarily through utilization of the Company’s credit facility. In January of 2012, the Company completed an offering of 14.95 million shares of common stock, the net proceeds of which contributed to an increase in cash balances of $58.5 million in the first quarter of 2012 to be used for general corporate purposes.
Operational Update
Sequenom CMM launched its noninvasive proprietary MaterniT21 LDT in the fourth quarter of 2011 and began marketing testing services to physicians in the United States. A clinical validation study leading to the introduction of the MaterniT21 LDT was published in the journal Genetics in Medicine which demonstrated high accuracy, detecting nearly all (99.1%) positive cases of fetal trisomy 21 with a very low false positive rate.
Most recently, Sequenom CMM announced the publication of an independent multi-center study on Sequenom CMM’s MaterniT21 LDT, demonstrating that it can detect fetal trisomy 21, 18 and 13 with high accuracy from a maternal blood sample. The Company expanded the application of the MaterniT21 test to include the detection of trisomies 18 and 13 in addition to trisomy 21, rebranding it under the name MaterniT21(TM) PLUS.
Approximately 1,000 patient samples had been received by Sequenom CMM for testing in its MaterniT21 LDT by year-end 2011. A total of approximately 7,500 patient samples were received in the first two months of 2012, of which approximately 2,500 were for MaterniT21 and MaterniT21 PLUS LDTs. The current MaterniT21 PLUS sample volume trend equates to a run rate in excess of 20,000 tests annually, more than doubling the run rate at year-end 2011, a rate that we expect to increase with the further expansion of our sales force.
Over 21,000 total prenatal and retinal tests were billed during the full-year 2011. Test volumes continue to grow on a weekly basis as Sequenom CMM works toward reaching its goal of billing a minimum of 25,000 MaterniT21 PLUS LDTs in 2012.
Due to the initial adoption and growing commercial interest in the MaterniT21 PLUS LDT, Sequenom CMM expanded its prenatal sales force as planned. During the first quarter of 2012, Sequenom CMM added 23 new prenatal sales representatives and three additional AMD sales representatives, bringing the total to more than 50 diagnostic sales representatives actively selling in all 50 states in the U.S.
Conference Call Information
A conference call will take place today, March 7, 2012, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) hosted by Chairman and CEO Harry F. Hixson, Jr., Ph.D., and other members of senior management. To access the live teleconference call, dial 800-860-2442 in the U.S., 866-605-3852 in Canada (both are toll free), and 412-858-4600 for other international callers. Please specify to the operator that you would like to join the “Sequenom Fourth Quarter and Full-Year 2011 Earnings Conference Call.” If you are unable to listen to the live webcast, a teleconference replay will be available through Thursday, March 15, 2012. Interested parties can access the rebroadcast by dialing 877-344-7529 or 412-317-0088 internationally and entering the conference number 10010487.
The conference call webcast is accessible through the “Investors” section of the Sequenom website at http://ir.sequenom.com. An online replay will be available following the initial broadcast until Wednesday, April 4, 2012.
About Sequenom
Sequenom, Inc. (NASDAQ: SQNM) is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom maintains a Web site at http://www.sequenom.com to which Sequenom regularly posts copies of its press releases as well as additional information about Sequenom. Interested persons can subscribe on the Sequenom Web site to email alerts or RSS feeds that are sent automatically when Sequenom issues press releases, files its reports with the Securities and Exchange Commission or posts certain other information to the Web site.
SEQUENOM®, MaterniT21 and MaterniT21 PLUS are trademarks of Sequenom, Inc. All other trademarks and service marks are the property of their respective owners.
