Full Press Release Details
Transgenomic Reports Second Quarter 2015
Conference Call to Be Held at 5:00 PM
Omaha, Neb. (August 13, 2015) -
Transgenomic, Inc. (NASDAQ: TBIO) today reported financial results for the second quarter ended June 30, 2015, and provided
Second Quarter Financial Results
Net sales for the second quarter of 2015 were $7.0 million,
a 4% increase over the $6.8 million in net sales for the same period in 2014. However, the increase over the same period in 2014
was approximately 11% after adjusting for the sale in the third quarter of 2014 of the Company's Surveyor Kits product line.
Sales in the Company's Laboratory Services segment increased by $1.0 million in the second quarter of 2015 compared to the
year-earlier period, a 26% increase. This reflects higher sales of patient tests, spurred by a number of new products launched
in late 2013, along with increased sales of Transgenomic's contract laboratory services. In the Genetic Assays and Platforms
segment, net sales in the second quarter of 2015 decreased by $0.7 million, or 25%, as compared to the same period in 2014, as
a result of lower bioconsumables and instrument sales. The decrease in bioconsumables sales was primarily due to the divestiture
of the Surveyor Kits product line in the third quarter of 2014.
Gross profit in the second quarter of 2015 was $2.9 million,
or 41% of net sales, compared with gross profit of $2.4 million, or 35% of net sales for the same period in 2014. Gross profits
increased primarily as a result of an approximately $1.1 million increase in profits in the Laboratory Services segment in the
second quarter of 2015 compared to the prior year period. This increase primarily reflects increased patient test volume along
with lower manufacturing costs and higher volumes in the Company's contract laboratory services. This increase was partially
offset by lower gross profit in the Genetic Assays and Platforms segment, resulting from the Surveyor Kits product line divestiture,
lower instrument sales and a $0.3 million obsolete inventory provision that was recorded during the second quarter of 2015.
Operating expenses were $5.7 million during the second quarter
of 2015, compared with $6.3 million in the prior-year period. The $0.6 million decrease in operating expenses included lower personnel
costs, lower operating supply costs and lower stock compensation costs.
The net loss for the second quarter of 2015 was $3.3 million,
or $0.30 per share, compared with a net loss of $3.9 million, or $0.57 per share, for the second quarter of 2014. Modified EBITDA,
which is a non-GAAP measure that Transgenomic views as an appropriate and sound measure of the Company's results, was a loss of
$2.0 million for the second quarter of 2015, compared to a loss of $3.2 million for the same period in 2014. A reconciliation of
Net Loss to Modified EBITDA is presented below.
Cash and cash equivalents were $2.3 million at June 30, 2015,
compared with $1.6 million in cash and cash equivalents at December 31, 2014. As previously announced, during the first quarter
of 2015 the Company completed financings that raised approximately $7.1 million in net proceeds. Additionally, in July 2015, the
Company completed a private placement financing in which it raised approximately $2.7 million in net proceeds.
"Transgenomic made solid progress in the second quarter
in our ongoing transformation into an advanced technology company primarily focused on commercializing the many applications of
our Multiplexed ICE COLD-PCR (MX-ICP) technology," said Paul Kinnon, President and Chief Executive Officer. "Importantly,
we reported good increases in sales in our strategically important businesses, with overall net sales up four percent year over
year, and up 11% after adjusting for our divested Surveyor Kit product line. In the key Laboratory Services segment, we recorded
a 26% increase in sales compared to the year-earlier period, as the impact of new product introductions began to manifest. At the
same time, we were successful in continuing to manage costs, with operating expenses down compared to the second quarter in 2014
despite our investments in new products. We also are very pleased to report that gross margins in the quarter strengthened compared
to last year, rising to 41% compared to 35% in 2014, a level we expect to maintain and seek to further improve."
Mr. Kinnon continued, "We are delivering on our commitments
to achieve continued progress this year in commercializing MX-ICP. Since the start of the second quarter, we incorporated MX-ICP
technology in our Biomarker Identification business, making it available to all pharmaceutical and biotechnology customers who
are developing biomarkers for targeted therapies and precision medicine applications. At ASCO, we announced the launch of our EGFR
tests for lung and colon cancer, the first in a series of CLIA mutation detection tests that leverage MX-ICP's exceptional
accuracy and sensitivity and its ability to work with multiple patient sample types. We are
starting to gain traction with these first tests and additional tests are moving through the pipeline. At the end of the
quarter, we launched our ICEme Mutation Enrichment Kits available to cancer researchers worldwide. The initial menu includes
17 clinically actionable cancer mutations, and the kits are customizable and work on all sequencing platforms. Earlier this month,
we announced initiation of a pilot clinical study in collaboration with four leading biopharmaceutical oncology firms to validate
the accuracy and utility of MX-ICP-based liquid biopsies to guide and monitor cancer clinical trials. The results of this study,
if positive, could serve as critical confirmation of our liquid biopsy technology, and the fact that multiple global oncology leaders
are participating is very encouraging.
Mr. Kinnon concluded, "We also are delighted to announce
the formation of the Transgenomic Clinical-Commercial Advisory Board for our MX-ICP technology. Our distinguished founding members
are leaders in oncology and genomics from academia and industry. We view their participation as another confirmation of the exceptional
promise of this technology to help transform the diagnosis and treatment of cancer. As we progress into the second half of the
year, we believe our efforts to date are starting to bear fruit, as we work to accelerate the momentum already underway that we
believe will enable us to realize the clinical and commercial promise of MX-ICP."
Six Month Financial Results
Net sales for the six months ended June 30, 2015 were $13.6
million, a 4% increase compared to the $13.0 million in net sales for the same period in 2014. However, the increase over the same
period in 2014 was approximately 11% after adjusting for the sale of the Surveyor Kits product line. Net sales in the Laboratory
Services segment increased by 29% year over year due to higher test volumes in both patient testing and contract laboratory services.
In the Genetic Assays and Platforms segment, net sales for the six months ended June 30, 2015 decreased by 30% as compared to the
same period in 2014, as a result of lower bioconsumables and instrument sales. The lower bioconsumables sales primarily reflect
the divestiture of the Surveyor Kits product line in the third quarter of 2014.
Gross profit was $5.8 million, or 43% of net sales, for the
six months ended June 30, 2015 compared with gross profit of $4.9 million, or 38% of net sales, for the same period in 2014. Gross
profit increased approximately $2.2 million in the Laboratory Services segment as a result of increased patient test profitability
due to increased test volume, lower manufacturing costs and higher volumes in contract laboratory services. This increase was partially
offset by a decrease of $1.2 million in gross profit in the Genetic Assays and Platforms segment resulting from divestiture of
the Surveyor Kits product line, lower instrument sales and a $0.3 million obsolete inventory provision that was recorded during
the second quarter of 2015.
Operating expenses were $11.3 million for the six months ended
June 30, 2015, compared with $12.4 million in operating expenses in the prior year period. The $1.1 million decrease in operating
expenses included lower personnel costs, lower operating supply costs and lower stock compensation costs, partially offset by a
higher provision for bad debts.
The net loss for the six months ended 2015 was $6.3 million,
or $0.65 per share, compared with a net loss of $8.1 million, or $1.17 per share, for the six months ended June 30, 2014.
Transgenomic management will host a conference call to discuss
the second quarter 2015 financial results and answer questions beginning at 5:00 pm Eastern Time today. To participate in the
call, dial 866-952-7532 from the U.S. and Canada or 785-424-1834 from international locations and enter conference ID: TRANS.
The call will be webcast live and can be accessed at https://www.webcaster4.com/Webcast/Page/1139/10094,
which is also available on the IR section of Transgenomic's website.
A replay will be available for two weeks beginning approximately two hours after the call's conclusion, until 11:59 PM ET
August 27, 2015. To access the replay, dial 800-839-1180 (domestic) or 402-220-0400 (international).
Transgenomic, Inc. is
a global biotechnology company advancing personalized medicine in cardiology, oncology, and inherited diseases through advanced
diagnostic technologies, such as its revolutionary ICE COLD-PCR and its unique genetic tests provided through its Patient
Testing business. The company also provides specialized clinical and research services to biopharmaceutical companies developing
targeted therapies and sells equipment, reagents and other consumables for applications in molecular testing and cytogenetics.
Transgenomic's diagnostic technologies are designed to improve medical diagnoses and patient outcomes.
Forward-Looking Statements
Certain statements in this press release constitute "forward-looking
statements" of Transgenomic within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known
and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results,
performance or achievements expressed or implied by such statements. Forward-looking statements include, but are not limited to,