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Posted: November 12, 2007
Nanogen Reports Smaller Loss On Higher Revenues
(Nanowerk News) Nanogen, Inc. (Nasdaq:NGEN), developer of advanced diagnostic products, today reported its unaudited financial results for the quarter ended September 30, 2007.
Total revenues for the third quarter of 2007 were $8.4 million compared to $7.5 million one year ago and $10.3 million in the prior quarter. Product revenues for the third quarter of 2007 were $5.5 million, an increase of approximately 17% as compared to $4.7 million for the third quarter of 2006 and up 5% over prior quarter. License, contract and grant revenues for the third quarter of 2007 remained steady at $2.8 million compared to the third quarter of 2006 but declined by $2.2 million compared to the prior quarter as the company completed the initial phases of its CDC contract but is awaiting approval to provide services for future phases.
Total costs and expenses in the third quarter of 2007 were $20.0 million as compared to the $19.1 million in the third quarter of 2006. The third quarter of 2007 includes costs related to the exit of the micro array business which were offset by a gain recorded as a result of deconsolidating Jurilab. The array exit costs were $6.9 million and were mostly offset by a $5.8 million gain related to the deconsolidation of Jurilab; there was no cash flow impact of these entries. Total operating expenses in the third quarter of 2007 fell by $1.6 million compared with expenses in the same period last year, exclusive of the non-recurring accounting entries included in operating expenses in the third quarter of 2007. Operating expenses are expected to fall further following staff and related expense reductions associated with the exit of the array business.
For the quarter ended September 30, 2007, Nanogen’s net loss was $7.5 million or $0.10 per share, compared to a net loss of $11.8 million or $0.18 per share for the same quarter in 2006. Included in the third quarter results of 2007 is a $5.4 million non-cash gain related to revaluation of the company’s warrants and the conversion features on its convertible notes.
“This was a transformational quarter as we initiate our exit of the array business to focus on the faster growing real time and point of care opportunities,” said Howard C. Birndorf, Nanogen's chairman of the board and CEO. “We have a strong portfolio of differentiated products that will allow us to increase our market share in these fast growing market segments. We anticipate our financial profile will change quickly in the new year and are targeting achieving cash flow breakeven late in 2008.”
Nanogen's consolidated cash, cash equivalents and short-term investments balance at the end of the third quarter of 2007 was approximately $15.3 million.
Financial Guidance for Q4 2007 and 2008:
Nanogen expects quarterly revenue to exceed $9.0 million during Q4 2007. Further, total 2008 revenues are expected to increase by approximately 25 percent from 2007 levels with a gross margin of approximately 60 percent. The anticipated growth in revenues combined with gross margins and operating expense improvements should allow the company to achieve cash flow breakeven late in 2008.
Webcast of Conference Call
Nanogen management will host a conference call to discuss the third quarter 2007 results on November 12 at 4:30 p.m. Eastern (1:30 p.m. Pacific). Interested investors and others may participate in the conference call by dialing 800.237.9752 for US/Canada participants and 617.847.8706 for international participants. The conference ID will be 99468930.
Audio of management's presentation will be available via live webcast on the investor relations section of Nanogen's corporate website at www.nanogen.com, and will be archived for one year. A digital recording of the call will also be available for 48 hours, beginning two hours after the completion of the conference call on November 12, and can be accessed via telephone at 888-286-8010 for US/Canada participants and 617-801-6888 for international participants. The conference ID, 83888365, will be required to listen to the playback.
About Nanogen, Inc.
Nanogen’s advanced technologies provide researchers, clinicians and physicians worldwide with improved methods and tools to predict, diagnose, and ultimately help treat disease. The company's products include real-time PCR reagents and a line of rapid, point-of-care diagnostic tests. Nanogen’s ten years of pioneering research involving nanotechnology holds the promise of miniaturization and continues to be supported for its potential for diagnostic and biodefense applications. For additional information please visit Nanogen’s website at www.nanogen.com.
Nanogen Forward-Looking Statement
This press release contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements, including whether patents owned or licensed by Nanogen will be developed into products, whether the patents owned by Nanogen offer any protection against competitors with competing technologies, whether products under development can be successfully developed and commercialized, whether results reported by our customers or partners can be identically replicated, and other risks and uncertainties discussed under the caption "Factors That May Affect Results" and elsewhere in Nanogen’s Form 10-K or Form 10-Q most recently filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Nanogen disclaims any intent or obligation to update these forward-looking statements.