SAN DIEGO, Aug. 6 /PRNewswire-FirstCall/ -- SEQUENOM, Inc. (Nasdaq: SQNM), today reported its financial results for the quarter ended June 30, 2009.

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Second Quarter Results

• Total revenue for the second quarter of 2009 was $9.2 million, compared with $12.8 million for the second quarter of 2008. The decrease from the comparable period last year was primarily due to softness in capital expenditure in the bioresearch market, resulting in lower sales of MassARRAY((R)) systems.
• Cost of product and service revenue for the second quarter of 2009 was $3.1 million, compared with $5.5 million for the second quarter of 2008.
• Gross margin for the second quarter of 2009 was 66%, compared to 57% for the second quarter of 2008 reflecting higher consumable sales as a percentage of the company's product mix. Consumables are higher margin products as compared to hardware or platform products.
• Research and development expenses were $10.2 million for the second quarter of 2009, compared with $6.4 million for the same period in the prior year. Research and development expenses for the second quarter of 2009 reflected additional expenses associated with product development, as well as expenses associated with the company's new Clinical Laboratory Improvement Amendment (CLIA) certified laboratory, which was acquired in November 2008.
• Selling, general and administrative expenses of $15.1 million for the second quarter of 2009 increased from $10.6 million for the second quarter of 2008 as a result of increased legal expenses, higher FAS123(R) expenses, higher facilities costs, and expenses associated with the start-up of the company's contract sales force which began in February 2009.
• Total costs and expenses for the second quarter of 2009 were $29.5 million, including $1.0 million in restructuring costs, compared with $22.5 million for the comparable quarter in 2008. For the three months ended June 30, 2009 and 2008, the company recorded $3.2 million and $1.5 million, respectively, of compensation expense related to FAS123(R).
• Net loss for the second quarter of 2009 was $20.2 million, or $0.33 per share, compared with $9.7 million, or $0.21 per share, for the second quarter of 2008. The number of shares used to calculate net loss per share was 61,137,755 for this period versus 47,146,856 for the second quarter of 2008.
  

Six-Month Results

• Revenue for the first six months of 2009 totaled $17.9 million, compared with $23.4 million for the first six months of 2008.
• Cost of product and services revenues for the first six months of 2009 was $6.6 million, compared with $10.1 million reported for the first six months of 2008.
• Gross margin for the first six months of 2009 was 63%, compared to 57% for the first six months of 2008.
• Total costs and expenses for the first six months of 2009 were $55.9 million, versus $41.2 million for the comparable period in 2008. For the six months ended June 30, 2009 and 2008, the company recorded $6.2 million and $2.6 million, respectively, of compensation expense related to FAS123(R).
• Net loss for the first six months of 2009 was $37.7 million, or $0.62 per share, compared with $18.4 million, or $0.40 per share for the comparable period in 2008. The number of shares used to calculate loss per share was 61,078,534 for this period versus 46,238,618 for the first half of 2008.
  

Cash, Cash Equivalents and Available for Sale Securities

As of June 30, 2009, SEQUENOM had total cash, cash equivalents and short- and long-term marketable securities of $69.3 million and $7.5 million in accounts receivable.

"This recent period has been a challenging time for SEQUENOM. Our announcement at the end of April was immensely disappointing and has resulted in a setback in our molecular diagnostics programs. However, I believe we are at a point where we can look forward to other promising developments for SEQUENOM," said Harry Stylli, PhD, president and CEO of SEQUENOM. "We have made improvements to our MassARRAY platform and we are poised to introduce a series of molecular diagnostics tests to the market, including the first of those based on cell free fetal nucleic acids."

2009 Second Quarter and Recent Highlights

Genetic Analysis

Compact 96 Launch - With the launch of the Compact 96 system the company continues to make improvements to its MassARRAY platform. This next generation MassARRAY system addresses the needs of lower throughput laboratories. The combination of the features of the new MassARRAY Compact 96 system - accuracy, sensitivity, and now the ability to cost-effectively run fewer samples, make this new offering an ideal system for use in clinical laboratories.

OncoCarta Panel - The company continues to benefit from market acceptance of the OncoCarta panel. OncoCarta is a comprehensive multi-gene panel available for profiling rare somatic mutations. It enables researchers to rapidly profile genetic changes associated with tumor initiation and progression. The company expects to add more oncogenes and mutations to the OncoCarta panel in the near future.

Diagnostics Business

Commercial Launch Plans - The company is on track to launch three diagnostic products through its CLIA laboratory by the first quarter of 2010 - cystic fibrosis carrier screen (CFTR), RHD and fetal sex determination. The first of these tests - CFTR - is expected to launch this quarter or early next quarter. The RHD and fetal sex determination tests are on target for launches thereafter.

Down Syndrome Test - The company is evaluating both RNA and DNA approaches for a Down syndrome test, and it is taking a rigorous and detailed approach to this work. The company is also sponsoring a number of clinical studies through independent third parties, the results of which will be published in peer-reviewed journals prior to the launch of any Down syndrome test that the company develops.