Record Prenatal Microarray Volumes and
Revenue Growth, Record Cash Collections and
Traction of New Tests Highlight a Strong Quarter of Commercial
Execution
– Company to
Host Conference Call and Webcast Today at 1:30 p.m. PDT
–
CombiMatrix Corporation (Nasdaq:CBMX), a molecular diagnostics
company specializing in DNA-based testing services for pre- and
postnatal developmental disorders and pre-implantation genetic
screening (PGS) services, today reported financial results for the
first quarter ended March 31, 2015. The Company will host a
conference call and webcast at 1:30 p.m. PDT, today.
"The first quarter of 2015 was truly a phenomenal quarter for
CombiMatrix," said Mark McDonough, President and Chief Executive
Officer of CombiMatrix. "We continued to see record microarray test
volumes, revenues and collections. Our Sequenom collaboration
continues to gain traction and is driving increased volumes at
attractive reimbursement rates. We had a record quarter in
terms of cash collections from tests performed despite a dynamic
reimbursement environment for all healthcare laboratories. We
signed several contracts with providers that expand our penetration
into our target markets. We put the litigation behind us with the
execution of the settlement agreement with the Plaintiff in the
case, which enables us to direct all of our resources toward
building our business. We stabilized our balance sheet and
increased our cash runway with our $4.9 million raise. We worked
diligently to operate the business efficiently while we
concurrently grow our business and in so doing, managed our
expenses and cash burn in a prudent manner. We entered a new market
with CombiPGS and are very excited about what we can generate in
this market in 2015 and beyond. In short we are executing on our
plan and we look forward to continuing to do so in the coming
quarters."
Operational Highlights
- Record prenatal microarray volume of 1,206 tests performed in
the quarter ended March 31, 2015, a 64 percent increase compared to
the first quarter of 2014 (see table below).
- Record prenatal microarray revenues of $1.55 million for the
quarter ended March 31, 2015, a 38.5 percent increase from
$1.12 million during the first quarter of 2014
- The Company's customer base continued to grow, reaching 228
billable customers during the quarter ended March 31, 2015, a new
record for CombiMatrix and a 52 percent increase compared to
150 billable customers during the first quarter of 2014.
- Record cash collections of $2.1 million for the quarter ended
March 31, 2015, compared to $1.5 million in the first quarter of
2014.
- Raised $4.9 million in new capital from existing accredited
institutional investors through a registered direct offering of
common stock, Series E convertible preferred stock and common stock
warrants.
Additional test volume and revenue data are as follows:
|
Volumes |
Revenues
(in 000's) |
|
Q1
'15 |
Q1
'14 |
# Δ |
% Δ |
Q1
'15 |
Q1
'14 |
$ Δ |
% Δ |
Prenatal |
324 |
216 |
108 |
50.0% |
$ 422 |
$ 284 |
$ 138 |
48.6% |
Miscarriage analysis |
882 |
521 |
361 |
69.3% |
1,132 |
838 |
294 |
35.1% |
Subtotal - prenatal arrays |
1,206 |
737 |
469 |
63.6% |
1,554 |
1,122 |
432 |
38.5% |
Pediatric |
467 |
516 |
(49) |
-9.5% |
497 |
498 |
(1) |
-0.2% |
Oncology |
-- |
116 |
(116) |
-100.0% |
-- |
94 |
(94) |
-100.0% |
Subtotal - all arrays |
1,673 |
1,369 |
304 |
22.2% |
2,051 |
1,714 |
337 |
19.7% |
Non-array tests |
672 |
304 |
368 |
121.1% |
236 |
76 |
160 |
210.5% |
Total - all tests |
2,345 |
1,673 |
672 |
40.2% |
2,287 |
1,790 |
497 |
27.8% |
Royalties |
|
|
|
|
42 |
32 |
10 |
31.3% |
Total revenues |
|
|
|
|
$ 2,329 |
$ 1,822 |
$ 507 |
27.8% |
%age of arrays of total |
71% |
82% |
|
-12.8% |
90% |
96% |
|
-6.3% |
Financial Results
Quarter ended March 31, 2015 compared to Quarter ended
March 31, 2014
For the quarter ended March 31, 2015, CombiMatrix reported total
revenues of $2.3 million, a 28 percent increase over total revenues
of $1.8 million for the first quarter of 2014. The increase in
revenues was driven primarily by increased volumes of both
microarray and non-microarray diagnostic tests, partially offset by
a reduction in oncology volumes and revenues as the Company exited
that business during 2014. Excluding oncology, total revenues grew
by 35 percent. Volume and revenue growth in the non-array business
was driven primarily by volumes growth from the Sequenom
collaboration, as well as from improved reimbursement from
third-party payers for those tests.
Total operating expenses were $4.1 million for the quarter ended
March 31, 2015, compared to $3.8 million in the comparable quarter
of 2014. The increase was driven primarily by continued investment
in revenue generating departments such as sales, marketing, billing
and genetic counseling as well as from increased cost of services
performed due to volume growth. General and administrative
expenses decreased primarily due to reduced litigation costs and
expenses from the conclusion of the Strathmann litigation in early
2015.
Net loss was $1.8 million for the quarter ended March 31, 2015,
compared to a net loss of $2.0 million in the comparable quarter of
2014. The reduction in net loss in the first quarter of 2015 was
driven primarily by increased revenues and lower litigation
expenses, partially offset by continued investment in
revenue-generating departments and increased cost of services as
noted above.
The Company reported a net loss attributable to common
stockholders of $2.7 million, or $0.23 per basic and diluted share
for the quarter ended March 31, 2015, compared to $2.0 million, or
$0.18 per basic and diluted share, for the same period in
2014. The net loss attributable to common stockholders in the
first quarter of 2015 includes a non-cash expense of $890,000, or
$0.08 per basic and diluted share, related to deemed dividends from
the issuance of Series E convertible preferred stock to investors
as part of our $4.9 million registered direct offering that closed
on February 18, 2015.
Cash, cash equivalents and short-term investments totaled $8.7
million as of March 31, 2015, compared to $5.2 million as of
December 31, 2014. The increase in cash, cash equivalents and
short-term investments was driven by the $4.9 million registered
direct offering previously discussed, which after offering-related
costs and expenses was $4.76 million. For the quarter ended
March 31, 2015, net cash used in operating activities was $1.2
million, compared to $1.6 million in the comparable 2014 period.
The decrease in net cash used in operating activities was due
primarily to record cash reimbursement realized during the quarter,
coupled with reduced legal expenses and favorable timing of vendor
payments for inventory supplies and related costs. The Company's
cash and cash equivalents are expected to be sufficient to fund
current operations through the middle of 2016. This
projection does not include any proceeds from possible future
partnerships or additional financing activities, should they
occur.
Recent Business Highlights
- The Superior Court of California (the "Court") issued a final
statement of decision in favor of CombiMatrix in the matter of the
People of the State of California and Relator Michael Strathmann
("Plaintiff") vs. Acacia Research Corporation, CombiMatrix
Corporation and Amit Kumar ("Defendants"). The Court ruled in favor
of the Defendants and against all claims of the Plaintiff.
Specifically, the Court determined that Defendants had no
fraudulent intent when they pursued insurance benefits under their
D&O Policy over a decade ago. Recently, the Defendants and
Plaintiff entered into a settlement agreement whereby Plaintiff
agreed to waive its right to appeal the Court's findings or to seek
to have the findings overturned and re-litigated. In return,
Defendants agreed to waive their rights for recovery of
court-related costs and expenses along with their rights to pursue
reimbursement for legal costs incurred in defense of the
lawsuit. As a result, the Company does not expect to incur
additional legal defense costs related to this case in the
future.
- Karen Warner, RN, joined CombiMatrix as Vice President of Payer
Relations. Ms. Warner will be responsible for managed care, payer
access and reimbursement.
- ReproSource, Inc., a nationally-recognized laboratory dedicated
to fertility specialists and the patients they serve, is now
offering CombiMatrix's chromosomal microarray analysis testing for
miscarriage analysis.
- CombiMatrix entered into a contractual agreement with Fortified
Provider Network ("FPN") for coverage of CombiMatrix's suite of
diagnostic laboratory services. FPN has over 200 payer clients
nationwide and contracts with physicians, hospitals, ancillary
facilities, mid-level providers and other specialty healthcare
providers.
- CombiMatrix entered into a contractual agreement with InterWest
Health for coverage of CombiMatrix's suite of diagnostic laboratory
services. InterWest is the largest and most comprehensive network
available in the northwest region of the United States, consisting
of over 25,000 hospitals, physicians and other providers. InterWest
contracts with providers in Montana, Idaho, Washington, North
Dakota, South Dakota and Wyoming.
- An article and letter to the editor published online in The New
England Journal of Medicine support the need for follow-up
confirmatory diagnostic testing following a positive noninvasive
prenatal screening test (NIPT) result.
- CombiMatrix announced the launch of its Buccal Swab DNA
Collection as an alternative to blood draws for its patients in the
postnatal genetic testing market.
Conference Call and Webcast
CombiMatrix will host a conference call at 1:30 p.m. PDT (4:30
p.m. EDT) today to discuss the first quarter 2015 financial and
operating results. To access the presentation by phone, dial
1-877-407-0784 for domestic callers and 1-201-689-8560 for direct
dial or international callers. Please ask for the "CombiMatrix
Corporation 2015 First Quarter Financial Results Conference Call."
The conference call will be webcast live under the investor
relations section of CombiMatrix's website at www.combimatrix.com.
A replay of the presentation will be available following the
presentation for 30 days, either via the CombiMatrix website
Investor/Events section or by dialing 1-877-870-5176 for domestic
callers or 1-858-384-5517 for direct-dial international callers.
When prompted, enter playback pin number 13607508.
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 and strategic partners, 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 both prenatal and developmental genetic testing
markets; our ability to attract and retain a qualified sales force
in wider geographies; our ability to ramp production from our sales
force and our strategic partners; rapid technological change in our
markets; changes in demand for our future services; legislative,
regulatory and competitive developments; the outcome of pending
litigation; 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.
|
COMBIMATRIX
CORPORATION |
CONSOLIDATED SUMMARY
FINANCIAL INFORMATION |
(In thousands,
unaudited) |
|
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
Revenues: |
|
|
Diagnostic services |
$ 2,287 |
$ 1,790 |
Royalties |
42 |
32 |
Total revenues |
2,329 |
1,822 |
|
|
|
Operating expenses: |
|
|
Cost of services |
1,230 |
998 |
Research and development |
157 |
134 |
Sales and marketing |
1,190 |
886 |
General and administrative |
1,475 |
1,757 |
Patent amortization and royalties |
25 |
32 |
Total operating expenses |
4,077 |
3,807 |
Operating loss |
(1,748) |
(1,985) |
|
|
|
Other income (expense): |
|
|
Interest income |
3 |
5 |
Interest expense |
(20) |
(16) |
Total other income (expense) |
(17) |
(11) |
Net loss |
$ (1,765) |
$ (1,996) |
|
|
|
Deemed dividends from issuing Series E
convertible preferred stock |
$ (890) |
$ -- |
Net loss attributable to common
stockholders |
$ (2,655) |
$ (1,996) |
|
|
|
Basic and diluted net loss per share |
$ (0.15) |
$ (0.18) |
Deemed dividends from issuing Series E
convertible preferred stock |
(0.08) |
-- |
Basic and diluted net loss per share
attributable to common stockholders |
$ (0.23) |
$ (0.18) |
|
|
|
Basic and diluted weighted average common
shares outstanding |
11,796,477 |
10,926,701 |
|
|
CONSOLIDATED BALANCE
SHEET INFORMATION: |
|
|
March 31,
2015 |
December 31,
2014 |
Total cash, cash equivalents and short-term
investments |
$8,730 |
$5,240 |
Total assets |
$12,524 |
$8,632 |
Total liabilities |
$2,232 |
$1,512 |
Total stockholders' equity |
$10,292 |
$7,120 |
CONTACT: Company Contact:
Mark McDonough
President & CEO, CombiMatrix Corporation
(949) 753-0624
Investor Contact:
Robert Flamm, Ph.D.
Russo Partners, LLC
(212) 845-4226
robert.flamm@russopartnersllc.com
Media Contact:
David Schull or Lena Evans
Russo Partners LLC
(212) 845-4271
david.schull@russopartnersllc.com
lena.evans@russopartnersllc.com
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