[May 24, 2016] |
|
Transgenomic Reports First Quarter 2016 Financial Results
Transgenomic, Inc. (NASDAQ: TBIO) today reported financial
results for the first quarter ended March 31, 2016, and provided a
business update.
Business Update During the
first quarter of 2016 Transgenomic (TBIO) continued to work to realign
its core activities around the commercialization of ICE COLD-PCR (News - Alert)™ (ICP),
an innovative technology that enables the use of DNA liquid biopsies for
better, safer and less costly diagnosis and treatment of many diseases.
Broader commercialization of ICP is expected to provide a foundation for
expansion of the Company's licensing and partnering strategy in order to
maximize the value of this broadly enabling technology.
As part of its strategic focus on broadly commercializing ICP, TBIO is
exiting lower growth legacy businesses, a process that is now largely
complete. TBIO conducted a strategic review of the Patient Testing
Business Unit in the first quarter of 2016 resulting in a decision to
suspend testing at its CLIA laboratory in New Haven, Connecticut, and
consolidate all remaining CLIA activities in the Company's laboratory in
Omaha, Nebraska. Divestiture options for these legacy Patient Testing
assets are being pursued. Suspension of these Patient Testing activities
and closure of the New Haven lab have significantly reduced expenses,
resulting in savings of over $1 million a month.
The drive to exit legacy businesses has had major effects on the
Company's operations and financial results. The Genetic Assays and
Platforms and Patient Testing businesses have been classified as
discontinued operations. Information presented for current and prior
quarter periods in the financial statements has been modified to reflect
them as discontinued operations.
Paul Kinnon, Transgenomic President and Chief Executive Officer,
commented, "We are now nearing completion of our plan to exit our low
growth, unprofitable legacy businesses, thereby releasing management to
focus solely on commercialization and adoption of our ICP technology. As
stated in our conference call last month, we are optimistic that the
foundation being developed for ICP will begin to bear fruit over the
remainder of 2016. The recent release of additional compelling
concordance data is an essential element in providing potential partners
and customers with the validation they need to demonstrate that ICP can
deliver on its promise to enable and simplify the detection of genetic
alterations, which is central to implementation of personalized and
precision medicine. We believe that the ICP platform has the potential
to make TBIO a leader in the rapidly emerging liquid biopsy market, and
we have now turned our full attention to further development of our ICE
COLD-PCR technology. Having alternatives to tissue-based biopsies is
expected to fundamentally change how we diagnose and treat cancer and
other disorders. The terrific results from our concordance study have
re-affirmed our excitement about the near and long-term potential for
this broadly-enabling technology, and we look forward to continued
progress in the months ahead."
First Quarter Financial Results from Continuing
Operations Net sales for the first quarter of 2016 were
$0.2 million as compared with $0.7 million for the same period in 2015.
The $0.5 million decrease reflects phasing of contracts in the first
quarter due to client sample availability issues, a situation the
Company expects to be transitory.
Gross profit was a negative $0.3 million, compared with gross profit of
$0.3 million for the same period in 2015. The negative gross profit in
the first quarter of 2016 is due to the lower revenues noted above
coupled with a substantial one-time milestone expense associated with
product commercialization. A significant portion of Cost of Goods Sold
is fixed costs associated with the operation of Transgenomic's
laboratory. The Company anticipates that gross profit percentages will
increase as revenues from ICP-based products and services rise.
Operating expenses were $2.0 million during the first quarter of 2016 as
compared to $2.3 million in the first quarter of 2015. The $0.3 million
decrease in operating expenses was due to lower professional fees in the
first quarter of 2016 as compared to the same period in 2015.
The net loss from continuing operations for the first quarter of 2016
was $2.1 million or $0.10 per share, compared with a net loss of $2.3
million or $0.28 per share for the first quarter of 2015. 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
$2.1 million for the first quarter of 2016, compared to a loss of $1.8
million for the same period in 2015. A reconciliation of Net Loss to
Modified EBITDA is presented below.
Cash and cash equivalents were $0.2 million at March 31, 2016, compared
with $0.4 million at December 31, 2015. As previously announced, during
the first quarter of 2016, the Company completed a financing that raised
approximately $2.0 million in net proceeds.
Recent Highlights
-
Released New Study Showing 100% Concordance between ICE COLD-PCR
(ICP) Liquid Biopsies and Conventional Tissue Biopsy Results; ICP Also
Identified More Tumor Mutations than Conventional Methods
-
The concordance study confirmed that ICP-enriched testing
identified all mutations detected by standard tissue biopsy
PCR. Notably, ICP also identified additional mutations missed by
conventional tissue biopsy. The study confirmed that ICP's
ultra-high sensitivity enables use of plasma-based liquid biopsies
for cancer mutation detection, replacing costly and invasive
tissue biopsies and enabling ongoing patient monitoring.
-
Launched First Rapid Turnaround Breast Cancer Analysis Panel at
2016 AACR Annual Meeting
-
The liquid biopsy test uses Multiplexed ICE COLD-PCR™
to detect actionable tumor mutations in genes relevant to
treatment decisions with high sensitivity. Notably, results are
available in 7-10 days, in contrast to turnaround times of up to
four weeks for other testing methods.
-
Announced Data Presentation Confirming Utility of ICP Liquid Biopsy
Technology at AACR
-
Includes first systematic data confirming concordance of ICP
liquid and tissue biopsy results
-
Launched 1st Commercially Available Assay
for Ultra Low Level Detection of EGFR C797S Mutations for Lung Cancer,
New MX-ICP Liquid Biopsy Tests for Detection of Colorectal and
Melanoma Tumor Mutations, and New MX-ICP Panels for Liquid Biopsy
Detection of RAS and PIK3CA Tumor Mutations
-
Launched multiple important new ICE COLD-PCR liquid biopsy cancer
tests.
Conference Call Transgenomic
management will host a conference call to discuss first quarter 2016
financial results and answer questions beginning at 9:00 a.m. Eastern
Time today. To access the call via telephone, please dial 877-876-9176
from the U.S. or Canada or 785-424-1667 for international participants
and enter conference ID TRANS. The call also will be broadcast live over
the Internet. To listen to the webcast, please log onto the Company's
Investor Relations web page at http://www.transgenomic.com/ir/investor-information/
and follow the instructions. An archived webcast of the call will be
available for 30 days. A telephone replay will be available from 8:00
p.m. Eastern Time on today through 11:59 p.m. Eastern Time on June 6th
by dialing 800-839-0866 (domestic) or 402-220-0662 (international).
About Transgenomic Transgenomic,
Inc. is a global biotechnology company advancing personalized
medicine in oncology and inherited diseases through advanced diagnostic
technologies, such as its revolutionary ICE COLD-PCR™, which
enables use of liquid biopsies for mutation detection. The company also
provides specialized clinical and research services to biopharmaceutical
companies developing targeted therapies. 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, those with respect to management's current views and
estimates of future economic circumstances, industry conditions, company
performance and financial results, including the ability of the Company
to grow its involvement in the diagnostic products and services markets,
expectations regarding new clients, projects and prospects, MX-ICP's
ability to accelerate the Company's growth and generate revenue, and the
operation of our billing systems. The known risks, uncertainties and
other factors affecting these forward-looking statements are described
from time to time in Transgenomic's filings with the Securities and
Exchange Commission. Any change in such factors, risks and uncertainties
may cause the actual results, events and performance to differ
materially from those referred to in such statements. Accordingly, the
Company claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995 with respect to all statements contained in this press release. All
information in this press release is as of the date of the release and
Transgenomic does not undertake any duty to update this information,
including any forward-looking statements, unless required by law.
|
|
|
|
TRANSGENOMIC, INC. AND SUBSIDIARY
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Dollars in thousands except per share data)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
NET (News - Alert) SALES
|
|
|
$
|
236
|
|
|
|
$
|
750
|
|
COST OF GOODS SOLD:
|
|
|
|
505
|
|
|
|
|
465
|
|
Gross profit
|
|
|
|
(269
|
)
|
|
|
|
285
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
1,704
|
|
|
|
|
1,804
|
|
Research and development
|
|
|
|
270
|
|
|
|
|
451
|
|
|
|
|
|
1,974
|
|
|
|
|
2,255
|
|
OPERATING LOSS FROM CONTINUING OPERATIONS
|
|
|
|
(2,243
|
)
|
|
|
|
(1,970
|
)
|
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
(169
|
)
|
|
|
|
(190
|
)
|
Warrant revaluation
|
|
|
|
321
|
|
|
|
|
(145
|
)
|
Other, net
|
|
|
|
-
|
|
|
|
|
(13
|
)
|
|
|
|
|
152
|
|
|
|
|
(348
|
)
|
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
|
|
(2,091
|
)
|
|
|
|
(2,318
|
)
|
INCOME TAX BENEFIT
|
|
|
|
-
|
|
|
|
|
-
|
|
LOSS FROM CONTINUING OPERATIONS
|
|
|
|
(2,091
|
)
|
|
|
|
(2,318
|
)
|
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES
|
|
|
|
(1,173
|
)
|
|
|
|
(723
|
)
|
NET LOSS
|
|
|
|
(3,264
|
)
|
|
|
|
(3,041
|
)
|
|
|
|
|
|
|
|
PREFERRED STOCK DIVIDENDS
|
|
|
|
(21
|
)
|
|
|
|
(331
|
)
|
|
|
|
|
|
|
|
NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS
|
|
|
|
(2,112
|
)
|
|
|
|
(2,649
|
)
|
NET LOSS FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON
STOCKHOLDERS
|
|
|
|
(1,173
|
)
|
|
|
|
(723
|
)
|
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS
|
|
|
$
|
(3,285
|
)
|
|
|
$
|
(3,372
|
)
|
|
|
|
|
|
|
|
BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS
|
|
|
$
|
(0.10
|
)
|
|
|
$
|
(0.28
|
)
|
BASIC AND DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS
|
|
|
$
|
(0.06
|
)
|
|
|
$
|
(0.08
|
)
|
BASIC AND DILUTED LOSS PER COMMON SHARE
|
|
|
$
|
(0.16
|
)
|
|
|
$
|
(0.36
|
)
|
BASIC AND DILUTED WEIGHTED-AVERAGE SHARES OF COMMON STOCK
OUTSTANDING
|
|
|
|
20,323,333
|
|
|
|
|
9,392,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transgenomic, Inc.
|
Summary Financial Results
|
Proforma Modified EBITDA
|
(dollars in thousands)
|
|
Management uses Modified EBITDA, a non-GAAP measure, to measure
the Company's financial performance and to internally manage its
businesses. Management believes that Modified EBITDA provides
useful information to investors as a measure of comparison with
peer and other companies. Modified EBITDA should not be considered
an alternative to, or more meaningful than, net income or cash
flow as determined in accordance with generally accepted
accounting principles. Modified EBITDA calculations may vary from
company to company. Accordingly, our computation of Modified
EBITDA may not be comparable with a similarly-titled measure of
another company.
|
|
The following sets forth the reconciliation of Net Loss to
Modified EBITDA for the periods indicated:
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2015
|
NET LOSS FROM CONTINUING OPERATIONS
|
|
|
$
|
(2,091
|
)
|
|
|
$
|
(2,318
|
)
|
|
|
|
|
|
|
|
INTEREST EXPENSE
|
|
|
|
169
|
|
|
|
|
190
|
|
|
|
|
|
|
|
|
DEPRECIATION AND AMORTIZATION
|
|
|
|
83
|
|
|
|
|
41
|
|
|
|
|
|
|
|
|
CHANGE IN FAIR VALUE OF WARRANTS
|
|
|
|
(321
|
)
|
|
|
|
145
|
|
|
|
|
|
|
|
|
STOCK COMPENSATION EXPENSE
|
|
|
|
110
|
|
|
|
|
114
|
|
|
|
|
|
|
|
|
MODIFIED EBITDA
|
|
|
$
|
(2,050
|
)
|
|
|
$
|
(1,828
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRANSGENOMIC, INC. AND SUBSIDIARY
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
222
|
|
|
|
$
|
444
|
|
Accounts receivable, net
|
|
|
|
170
|
|
|
|
|
264
|
|
Inventories, net
|
|
|
|
44
|
|
|
|
|
50
|
|
Other current assets
|
|
|
|
503
|
|
|
|
|
537
|
|
Assets held for sale
|
|
|
|
1,182
|
|
|
|
|
1,987
|
|
Total current assets
|
|
|
|
2,121
|
|
|
|
|
3,282
|
|
PROPERTY AND EQUIPMENT, NET
|
|
|
|
237
|
|
|
|
|
259
|
|
OTHER ASSETS:
|
|
|
|
|
|
|
Intangibles, net
|
|
|
|
1,146
|
|
|
|
|
1,170
|
|
Other assets
|
|
|
|
88
|
|
|
|
|
105
|
|
|
|
|
$
|
3,592
|
|
|
|
$
|
4,816
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
Current liabilities
|
|
|
$
|
17,261
|
|
|
|
$
|
16,717
|
|
Liabilities held for sale
|
|
|
|
20
|
|
|
|
|
264
|
|
Total current liabilities
|
|
|
|
17,281
|
|
|
|
|
16,981
|
|
OTHER LIABILITIES:
|
|
|
|
|
|
|
Common stock warrant liability
|
|
|
|
1,466
|
|
|
|
|
350
|
|
Other long-term liabilities
|
|
|
|
255
|
|
|
|
|
305
|
|
Total liabilities
|
|
|
|
19,002
|
|
|
|
|
17,636
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
(15,410
|
)
|
|
|
|
(12,820
|
)
|
|
|
|
$
|
3,592
|
|
|
|
$
|
4,816
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160524005244/en/
[ Back To TMCnet.com's Homepage ]
|