SAN DIEGO, May 6, 2015 /PRNewswire/ -- Sequenom, Inc. (NASDAQ: SQNM), a life sciences company committed to enabling healthier lives through the development of innovative products and services, today reported total revenues of $37.8 million for the first quarter of 2015, an increase of 2% compared to revenues of $37.1 million for the first quarter of 2014.

Net earnings improved to $14.3 million, or $0.12 per share, basic and $0.11 per share, diluted, for the first quarter, as compared to a net loss of $15.7 million, or $0.13 per share, basic and diluted, for the first quarter of 2014. The improvement in the net earnings from the prior year is due to a $21.0 million gain on the pooled patents agreement with Illumina, Inc., as well as improved gross margins and reduced operating expenses compared to the prior year first quarter.

Total cost of revenues decreased to $19.3 million for the first quarter of 2015, compared to $22.8 million for the prior year quarter. The decrease was primarily due to continued cost improvements to Sequenom Laboratories' existing tests offset by the impact of higher test volumes.

Gross margin for the first quarter of 2015 was 49% as compared to gross margin of 39% for the first quarter of 2014. This improvement is attributable primarily to the increase in collections for tests performed in the current and prior quarters, the increase in the volume of tests on accrual accounting and improved cost efficiencies in processing patient samples.

"We are pleased with our continued financial and operational improvements as well as the addition of test fee revenues from our NIPT patent pool," said Bill Welch, President and Chief Executive Officer of Sequenom, Inc. "In addition, we expanded our prenatal testing menu with the launches of the VisibiliT and HerediT Universal laboratory-developed tests to support future growth."

Operational highlights since the last earnings release:


    --  License revenue for the first quarter of 2015 was $2.1 million, compared
        to $0.3 million in the first quarter of 2014. License revenue in 2015
        includes $0.8 million earned upon validation of the technology by a
        licensee.
    --  Total patient samples accessioned increased by 6% to 52,800 patient
        samples during the first quarter of 2015, compared to the prior year
        first quarter. Approximately 44,700 of those patient samples accessioned
        were for the MaterniT21(®) PLUS laboratory-developed test (LDT), which
        is an increase in testing volume of 12% compared to the first quarter of
        2014.
    --  Sequenom Laboratories launched the VisibiliT laboratory-developed test,
        to address the broader average risk population, in the U.S. market on a
        non-covered cash basis. Sequenom Laboratories also launched the HerediT
        Universal laboratory-developed test, a comprehensive universal carrier
        screening panel testing for over 250 genetic disorders.
    --  We announced our plan to develop liquid biopsy-based tests in oncology.
        In March, a case study of the detection of possible circulating tumor
        DNA through our noninvasive prenatal test was presented at the 8th
        annual Future of Genomic Medicine conference in San Diego highlighting
        the power of our technology in circulating cell-free DNA analysis and
        its potential application for circulating tumor DNA.

Diagnostic services revenues are recorded primarily on a cash basis with accrual accounting used for several third-party payors and for client bill arrangements. License revenue is now reported on a separate line item within total revenues, and includes revenue from the pooled patents agreement and other license revenue. In total, over 42% of Sequenom's revenue in the first quarter of 2015 is accounted for on the accrual basis of accounting.

Total costs and expenses, excluding cost of revenues for the first quarter of 2015 were $23.0 million, as compared to $28.7 million for the first quarter of 2014. The decrease is primarily due to reductions in litigation related expense.

Operating income for the first quarter of 2015 was $16.5 million as compared to a loss of $14.4 million for the same period in 2014. During the first quarter of 2015, the Company recognized a gain of $21.0 million related to the pooled patents agreement for the transfer of clinical samples and related study protocols.

Net cash used in operating activities was $7.2 million for the first quarter of 2015, an improvement compared to $16.1 million for the first quarter of 2014. Cash burn for the first quarter of 2015 was $9.4 million, compared to $18.4 million in the same period of 2014. The first quarter 2015 cash burn included $3.4 million of bonus payments compared to no bonus payments in the first quarter of 2014.

Unrecorded accounts receivable for tests performed are estimated to be $29 to $32 million as of March 31, 2015. This range has declined by $2 million compared to the estimates in the prior quarter, due primarily to collections in the first quarter.

As of March 31, 2015, total cash, cash equivalents, and marketable securities were $90.7 million.

Non-GAAP Financial Measures

"GAAP" refers to financial information presented in accordance with generally accepted accounting principles in the United States. To supplement the condensed consolidated financial statements and discussion presented on a GAAP basis, this press release includes non-GAAP financial measures with respect to the quarter ended March 31, 2015. Management uses non-GAAP financial measures because it believes that a cash flow metric incorporating cash used by operations and certain other uses of cash are important to understand the cash requirements of the business. The Company reported cash burn as a non-GAAP financial measure. This non-GAAP financial measure is not in accordance with or an alternative to GAAP.

Management uses cash burn to evaluate performance compared to forecasts. Cash burn is calculated as the sum of net cash used by operating activities plus purchases of property, equipment and leasehold improvements, and payments on long-term obligations. The reconciliations of cash used by operating activities, the GAAP measure most directly comparable to cash burn, is provided on the attached schedule.

Conference Call Information

A conference call hosted by Bill Welch, President and CEO, and other members of senior management will take place today, May 6, at 5:00 p.m. EDT (2:00 p.m. PDT) and will be webcast live on the Sequenom Website. To access the live teleconference call, dial 877-883-0383 in the U.S. and Canada, and 412-902-6506 for other international callers. Please use code 3860983. For interested parties unable to listen to the live conference call, a replay will be available through Friday, June 5, 2015. The replay will be accessible by dialing 877-344-7529 or 412-317-0088 international toll or Canada toll free at 855-669-9658, and entering the conference number 10064729.

The conference call webcast is also accessible through the "Invest" section of the Sequenom Website at www.sequenom.com/invest. An online replay will be available following the initial broadcast until Friday, June 5, 2015.

About Sequenom

Sequenom, Inc. (NASDAQ: SQNM) is committed to enabling healthier lives through the development of innovative products and services. The Company serves patients and physicians by providing early patient management information. To learn how Sequenom is interpreting the genome to improve your life, visit www.sequenom.com.

About Sequenom Laboratories

Sequenom Laboratories((TM)), a CAP-accredited and CLIA-certified molecular diagnostics laboratory, has developed a broad range of laboratory tests, with a focus principally on prenatal care. Branded under the names HerediT(®), HerediT(®) UNIVERSAL, MaterniT21(®) PLUS, NextView((TM)), SensiGene(®) and VisibiliT((TM)), these molecular genetic laboratory-developed tests provide early patient management information for obstetricians, geneticists, and maternal fetal medicine specialists. Sequenom Laboratories is changing the landscape in genetic diagnostics using proprietary cutting edge technologies. Visit www.laboratories.sequenom.com and follow @SequenomLabs.

SEQUENOM(®), HerediT(®), MaterniT21(®) PLUS, NextView((TM)), RetnaGene((TM)), SensiGene(®), VisibiliT((TM)) and Sequenom Laboratories((TM)), are trademarks of Sequenom, Inc. All other trademarks and service marks are the property of their respective owners.

Forward-Looking Statements

Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the development of innovative products and services, the expansion of our prenatal testing menu and our future growth, our ability to address the broader average risk population in the U.S. market and our ability to develop liquid biopsy-based tests in oncology. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Risks are described more fully in the Company's filings with the Securities and Exchange Commission, including without limitation the Company's most recent Quarterly Report on Form 10-Q and other documents subsequently filed with or furnished to the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.


                                                        SEQUENOM, INC

                                       CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                                                         (Unaudited)

                                        (In thousands, except per share information)


                                                          Three Months Ended March 31,

                                                             2015                    2014
                                                             ----                    ----

    Revenues:

    Diagnostic services, net                                         $35,703                         $36,720

    License                                                 2,102                              341
                                                            -----                              ---

    Total revenues                                         37,805                           37,061
                                                           ------                           ------

    Costs and expenses:

    Cost of revenues                                       19,306                           22,770

    Selling and marketing                                   8,486                            8,559

    Research and development                                5,869                            6,789

    General and administrative                              8,676                           12,480

    Restructuring costs                                         -                             910
                                                              ---                             ---

    Total costs and expenses                               42,337                           51,508

    Gain on pooled patents agreement                       21,000                                -
                                                           ------                              ---

    Operating income (loss)                                16,468                         (14,447)

    Interest and other expense, net                       (2,108)                         (2,098)

      Earnings (loss) from continuing
       operations before income taxes                      14,360                         (16,545)

    Income tax benefit (expense)                             (76)                             246
                                                              ---                              ---

    Earnings (loss) from continuing
     operations                                            14,284                         (16,299)

    Discontinued operations:

    Earnings from discontinued
     operations, net of tax                                     -                             625
                                                              ---                             ---

    Net earnings (loss)                                              $14,284                       $(15,674)
                                                                     =======                        ========


    Net earnings (loss) per common share, basic

    Continuing operations                                              $0.12                         $(0.14)

    Discontinued  operations                                    $          -                          $0.01

    Net earnings (loss)                                                $0.12                         $(0.13)

    Net earnings (loss) per common share, diluted

    Continuing operations                                              $0.11                         $(0.14)

    Discontinued  operations                                    $          -                          $0.01

    Net earnings (loss)                                                $0.11                         $(0.13)

    Shares used in computing earnings (loss) per
     share

    Basic                                                 117,737                          116,134

    Diluted                                               146,642                          116,134



                                                   SEQUENOM, INC

                                       CONDENSED CONSOLIDATED BALANCE SHEETS

                                                    (Unaudited)

                                                   (In thousands)


                                               March 31,                December 31,
                                                     2015                        2014
                                                     ----                        ----

    Assets

    Current assets:

    Cash, cash equivalents
     and marketable
     securities                                               $90,708                            $93,897

    Accounts receivable,
     net                                            7,663                                 9,131

    Inventories                                     4,779                                 6,516

    Other current assets
     and prepaid expenses                           5,446                                12,112

               Total current assets               108,596                               121,656

    Property, equipment
     and leasehold
     improvements, net                             13,750                                15,348

    Other assets                                   23,104                                24,067

                    Total assets                             $145,450                           $161,071
                                                             ========                           ========


    Liabilities and stockholders' deficit

    Current liabilities:

    Accounts payable                                           $5,381                             $6,089

    Accrued expenses                               15,303                                22,155

    Long-term debt and
     obligations, current
     portion                                        2,313                                 4,144

    Other current
     liabilities                                    1,212                                 2,581

    Deferred gain on
     pooled patents
     agreement                                          -                               21,000

                Total current
                 liabilities                       24,209                                55,969

    Long-term liabilities                         136,336                               136,266

    Total stockholders'
     deficit                                     (15,095)                             (31,164)
                                                  -------                               -------

                     Total liabilities and
                      stockholders' deficit                  $145,450                           $161,071
                                                             ========                           ========




                                                SEQUENOM, INC.

                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                  (Unaudited)

                                                (In thousands)


                                                     Three Months Ended

                                                       March 31,
                                                       ---------

                                                   2015                    2014
                                                   ----                    ----

    Operating activities

    Net
     earnings
     (loss)                                                $14,284                        $(15,674)

    Adjustments to reconcile
     net earnings (loss) to net
     cash used in operating
     activities:

    Gain on
     pooled
     patents
     agreement                                 (21,000)                                -

    Earnings
     from
     discontinued
     operations,
     net of tax                                       -                            (625)

    Share-
     based
     compensation                                 1,542                             2,577

     Depreciation
     and
     amortization                                 2,892                             3,219

    Non-cash
     restructuring
     costs                                            -                              941

    Other non-
     cash items                                     236                               285

    Changes in operating assets
     and liabilities:

    Accounts
     receivable                                   1,468                           (1,049)

    Inventories                                   1,737                             4,285

    Prepaid
     expenses
     and other
     assets                                         578                             (316)

    Accounts
     payable
     and
     accrued
     expenses                                   (7,715)                          (8,907)

    Other
     liabilities                                (1,220)                            (828)
                                                 ------                              ----

    Net cash
     used in
     operating
     activities
     of
     continuing
     operations                                 (7,198)                         (16,092)
                                                 ------                           -------

    Investing activities

    Purchases
     of
     property,
     equipment
     and
     leasehold
     improvements                                 (289)                            (405)

    Purchases
     of
     marketable
     securities                                (10,007)                          (9,994)

    Maturities
     of
     marketable
     securities                                  10,052                             8,679

    Proceeds
     from
     pooled
     patents
     agreement                                    6,000                                 -

    Net cash
     provided
     by (used
     in)
     investing
     activities
     of
     continuing
     operations                                   5,756                           (1,720)
                                                  -----                            ------

    Financing activities

    Payments on
     term loan
     and
     capital
     lease
     obligations                                (1,909)                          (1,906)

    Proceeds
     from
     common
     stock
     issued
     under
     employee
     stock
     plans                                          177                               592

    Net cash
     used in
     financing
     activities
     of
     continuing
     operations                                 (1,732)                          (1,314)
                                                 ------                            ------

    Discontinued Operations

    Net cash
     provided
     by
     operating
     activities
     of
     discontinued
     operations                                       -                            2,919

    Net cash
     used in
     investing
     activities
     of
     discontinued
     operations                                       -                             (28)
                                                    ---                              ---

    Net cash
     provided
     by
     discontinued
     operations                                       -                            2,891
                                                    ---                            -----

    Effect of
     exchange
     rate
     changes on
     cash and
     cash
     equivalents                                   (45)                             (14)
                                                    ---                               ---

    Net
     decrease
     in cash
     and cash
     equivalents                                (3,219)                         (16,249)

    Cash and
     cash
     equivalents
     at
     beginning
     of period                                   63,309                            61,589

    Cash and
     cash
     equivalents
     at end of
     period                                                $60,090                          $45,340
                                                           =======                          =======




                                 SEQUENOM, INC

                          RECONCILIATION OF CASH BURN

                                  (Unaudited)

                                 (In thousands)


                                  Three Months Ended March 31,
                                  ----------------------------

                                       2015                 2014
                                       ----                 ----

    Cash Burn:

    Net cash used in
     operating activities                     $7,198                   $16,092

    Purchases of
     property, equipment
     and leasehold
     improvements                       289                        405

    Payments on long-
     term obligations                 1,909                      1,906
                                      -----                      -----

    Cash burn(1)                              $9,396                   $18,403
                                              ======                   =======


            (1) See accompanying Non-GAAP
           Financial Measures section for
               description of adjustments

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