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SEQUENOM Reports First Quarter 2009 Financial Results
On Wednesday April 29, 2009, 4:40 pm EDT

Sequenom Inc.
SAN DIEGO--(BUSINESS WIRE)--SEQUENOM, Inc. (NASDAQ: SQNM - News) today reported its financial results for the quarter ended March 31, 2009.

SEQUENOM reported first quarter 2009 revenues of $8.7 million, compared with revenues of $10.6 million reported for the first quarter of 2008. The decrease in revenues for the first quarter was primarily due to a decrease in system sales and services in the company’s genetic analysis business. Net loss for the first quarter of 2009 was $17.5 million, or $0.29 per share, compared with $8.6 million, or $0.19 per share, for the first quarter of 2008. The increase in net loss during the first quarter of 2009, compared with the first quarter of 2008, reflects increased general and administrative expenses and expenses associated with the planned launch of various noninvasive prenatal tests.

System revenues were $2.4 million, as compared to $3.7 million in the prior period while consumable sales rose modestly (1.3%) to $4.7 million. Gross margin was 61% for the first quarter of 2009, compared with 56% for the first quarter of 2008. The increased gross margin was attributable to higher relative sales in consumables (which have higher gross margins), as compared to lower relative system and contract research revenues (which traditionally have lower gross margins).

Research and development expenses were $8.8 million for the first quarter of 2009, compared with $4.9 million for the same period of 2008. The increase in research and development expenses for the first quarter of 2009 reflected additional expenses associated with the company’s investment in its molecular diagnostic technology and product development, increased clinical study costs and increased headcount-related expenses (including higher stock-based compensation expense), primarily associated with the building of the company’s infrastructure for its molecular diagnostics business. Selling, general and administrative expenses for the first quarter of 2009 were $14.3 million compared with $9.2 million for the first quarter 2008. The increase in selling, general and administrative expenses in 2009 resulted from increased headcount-related expenses related to the building of the company’s diagnostics sales force, as well as legal fees associated with on-going litigation and acquisition activities. Total operating expenses for the first quarter of 2009 were $23 million, compared with $14.1 million for the first quarter of 2008.

As of March 31, 2009 SEQUENOM had total cash and short- and long-term marketable securities of $87 million and $7.8 million in accounts receivable.

Updated 2009 Financial Guidance

SEQUENOM is updating its 2009 financial guidance as follows:

Genetic Analysis:


The company anticipates 2009 revenues to range between $32 million and $35 million
Gross margin is expected to be approximately 57% in 2009
After corporate allocations Genetic Analysis is expected to report a loss of between $10 million to $12 million, which includes approximately $5 million in non-cash FAS 123R expense, while incurring a cash burn after corporate allocations of breakeven to $2.0 million.

Molecular Diagnostics


The company is not providing revenue guidance for the molecular diagnostic business. However, Molecular Diagnostics is expected to incur a net loss after corporate allocations of between $52 million to $55 million, which includes approximately $7 million in non-cash FAS 123R expense, while incurring a cash burn after corporate allocations of approximately $45 million to $50 million.

Consolidated


On a consolidated basis the company is expected to report a 2009 loss of between $62 million to $67 million, which includes approximately $12 million in non-cash FAS 123R expenses.
On a consolidated basis, the company is expected to have a cash burn of between $45 million to $52 million.

Conference Call

Due to the news announced earlier today SEQUENOM’s management is rescheduling the earnings call previously scheduled for Thursday, April 30 to today at 2:00 p.m. Pacific time. Individuals interested in participating in the conference call may do so by dialing [phone] for domestic callers or [phone] for international callers. Those interested in listening to the conference call live via the Internet may do so by visiting the investor relations section of the company’s website at www.sequenom.com.

A webcast replay will be available on the SEQUENOM Web site for 14 days. A telephone replay will be available for 48 hours following the conclusion of the call by dialing [phone] for domestic callers, or [phone] for international callers, and entering reservation code 93862699