Both Sequenom and Transgenomic posted losses for the fourth quarter and calendar 2012, but their numbers tell significantly different stories.
Sequenom started out primarily as a life sciences company, but it’s most recent earnings report indicates it is hitting its stride as a molecular diagnostic laboratory. Last year, the San Diego-based company launched MaterniT21 PLUS, a noninvasive prenatal test for chromosomal abnormalities. It performed more than 61,000 of the assays during the year. By the fourth quarter, its annualized run rate topped 120,000, and it is projecting it will perform at least 150,000 of the tests in 2013.
“Results for both test unit volume and revenues for 2012 surpassed even our own optimistic expectations and the internal goals we announced for the beginning of the year,” said Harry Hixson Jr., Sequenom’s chief executive officer.
Although Sequenom has yet to achieve profitability, it is reporting rapid revenue growth. For the fourth quarter, ending Dec. 31, Sequenom reported a net loss of $32.8 million on revenue of $33.7 million.
That compares to a net loss of $22.2 million on revenues of $15.5 million—a 117 percent increase in sales.
For calendar 2012, the company lost $117.1 million on revenue of $89.7 million. For 2011, it lost $74.2 million on revenues of $55.9 million.
But Sequenom is not behaving like a venture anticipating the losses to continue indefinitely. It increased its sales staff from 20 to 75, hired medical affairs executives, increased the capacity of its laboratory in San Diego, and is ramping up operations of a second lab in North Carolina.
| Eyeing the Bottom Lines |
|
2012 Revenues |
2012 Net Income |
2011 Revenues |
2011 Net Income |
| Transgenomic |
$31.5 million |
-$8.3 million |
$32 million |
-$9.8 million |
| Sequenom |
$89.7 million |
-$117.1 million |
$55.9 million |
-$74.2 million |
Revenue from diagnostic services increased more than fivefold between 2011 and 2012 and has surpassed genetic analysis. Gross margins for diagnostics during the first quarter turned positive for the first time in the company’s history.
Although analysts have forecast that Sequenom will continue to operate in the red during 2013, losses are projected to narrow by about 30 percent. The company’s stock price has appreciated 60 percent since last summer, closing at $4.45 on March 18.
Meanwhile, the Omaha, Neb.-based Transgenomic reported a net loss of $2.3 million on revenue of $7.3 million for the fourth quarter, ending Dec. 31. For the year-ago quarter, it had eked out a profit of $264,000 on revenue of $8.6 million.
Company officials pinned both the loss and the 15 percent decline in revenues primarily to a drop in its instrument sales. However, it also indicated its clinical laboratory revenues were also “modestly below” those of the fourth quarter of 2011. The company does not break out sales for specific segments.
For calendar 2012, Transgenomic reported a loss of $8.3 million on revenues of $31.5 million. That compares to a 2011 loss of $9.7 million on revenues of $32 million.
The company indicated that it expects lab sales to grow significantly in 2013, driven primarily by new molecular tests for assessing adolescent risk for scoliosis and sensitivity to the cardiovascular drug Plavix.
“We expect these activities will drive top-line revenue growth, especially as we progress throughout the year,” said Craig Tuttle, Transgenomic’s chief executive officer.
