SAN DIEGO, May 3, 2012 /PRNewswire/ --Sequenom, Inc. (SQNM), a life sciences company providing innovative genetic analysis solutions, today reported revenue of $14.9 million for the first quarter of 2012, an increase of 10% compared to revenue of $13.5 million for the first quarter of 2011. First quarter 2012 revenues from the Sequenom Center for Molecular Medicine (Sequenom CMM) diagnostics services operating segment grew more than 187%, while revenues from the genetic analysis operating segment decreased 14% in the first quarter of 2012 as compared to the prior year period. Net loss for the first quarter of 2012 was $24.5 million, or $0.22 per share, as compared to net loss of $12.7 million, or $0.13 per share for the same period in 2011, reflecting an increase in costs associated primarily with the early commercialization of the Sequenom CMM MaterniT21 PLUS laboratory developed test (LDT).

As to be expected in the first year following the launch of a new LDT, gross margin was reduced in the first quarter of 2012 as compared to the same period one year ago, falling to 36% of revenue as compared to gross margin of 63% for the first quarter of 2011. Diagnostic services revenue is primarily recognized when cash is received and costs are recognized at the time services are performed. The delay in revenue recognition results in a decrease in gross margin, which is significantly magnified by increasing test volumes. Therefore, diagnostic revenue recognized in the current period does not relate directly to the costs incurred in the same period. This will continue until such time as the company converts to accrual accounting for diagnostic services revenue which is expected when sufficient reimbursement history has been established.

Gross margin is expected to continue to fluctuate on a quarterly basis due primarily to changes in sales volumes and the timing of cash receipts. During the first quarter of 2012, gross margin on diagnostic services revenue was negative, while gross margin on genetic analysis revenues increased by 3% to 74%, primarily due to a change in product mix, with higher margin consumables comprising a larger percentage of overall segment revenues.

Total operating expenses for the first quarter of 2012 were $29.8 million, as compared to total expenses of $21.6 million for the first quarter of 2011. This change reflects increased selling and marketing expenses resulting primarily from higher labor costs associated with increased headcount and an expanded diagnostic sales force, as well as increased research and development expenses associated with facilities allocation and overhead, higher operational supply expenses and labor related costs.

General and administrative expenses also increased for the first quarter, primarily due to increased facilities and legal expenses as compared to the same period one year ago. Total stock-based compensation expense was $2.9 million for the first quarter of 2012, as compared to $2.6 million as recorded during the first quarter in 2011.

"Our performance during the quarter reflects the successful achievement of our operational goals throughout the organization, specifically those associated with the expansion of Sequenom CMM's testing services and the launch and rapid adoption of the MaterniT21 PLUS laboratory developed test," said Paul V. Maier, Sequenom's CFO. "We ended the quarter with a favorable cash position as we continued to strengthen our balance sheet, raising $58.2 million during the period through an underwritten public offering, the proceeds of which will primarily be used to fund the expansion of our operations in support of the growing demand for our testing services."

As of March 31, 2012, total cash, cash equivalents, and marketable securities were $119.7 million. Net cash used in operating activities was $23.3 million for the first quarter, while purchases of capital equipment for the same period totaled $1.8 million, funded primarily through utilization of the Company's credit facility. As of March 31, 2012, the Company had borrowed $17.0 million under the credit facility.

Operational Updates

The Company recently reported that more than 12,700 total tests, including in excess of 4,900 MaterniT21 PLUS laboratory-developed tests (LDT) offered by Sequenom CMM, were accessioned during the first quarter of 2012, a 140% increase over the same period in 2011.At the close of the first quarter of 2012, the number of MaterniT21 PLUS samples accessioned on an annualized basis equated to approximately 30,000 tests. As of the last week in April, the52-week runrate had increased to more than 45,000 tests.

"The first quarter of 2012 has been an active and productive one for Sequenom and Sequenom CMM, as we have received and responded to the strong interest in Sequenom CMM's testing services, particularly with regard to Sequenom CMM's MaterniT21 PLUS LDT," said Harry Hixson, Jr., Ph.D., Chairman and CEO of Sequenom. "It is our goal to build on this positive momentum as the year progresses. We will continue to expand our reach to meet growing demand and deliver on our objective of providing high quality testing services offered by Sequenom CMM to physician customers nationwide."

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Sequenom, Inc. Reports Financial Results For The First Quarter Of 2012

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