SAN DIEGO, May 3 /PRNewswire-FirstCall/ -- Nanogen, Inc. (Nasdaq: NGEN), developer of advanced diagnostic products, today announced its unaudited financial results for the quarter ended March 31, 2005 and reaffirmed its financial guidance for 2005. Total revenues for the first quarter of this year increased by 47 percent to $3.2 million from $2.2 million in the same period in 2004, and $1.0 million in the fourth quarter of 2004. Product revenues for the first quarter of 2005 were $1.2 million compared to $1.1 million for the first quarter of 2004 and $0.4 million in the fourth quarter of 2004. This is the first complete quarter of financial results that reflect operations of Epoch Biosciences which was acquired on December 16, 2004. Nanogen's research and development, and selling, general and administrative operating expenses for the first quarter of 2005 were $10.9 million. The same expenses in the first quarter of 2004 were $7.9 million, which did not include expenses of the businesses of SynX Pharma and Epoch Biosciences which were acquired later in the year. Nanogen's expenses in the first quarter of 2005 were consistent with the expenses of $10.8 million in the fourth quarter of 2004, reflecting continued cost management and operating efficiencies. Nanogen's consolidated cash, cash equivalents and short-term investments balance at the end of the first quarter of 2005 was $39.8 million, compared to $51.9 million at the close of the previous quarter. Cash used during the first quarter included approximately $2.3 million of payments for costs associated with the acquisition of Epoch. For the quarter ended March 31, 2005, Nanogen reported a net loss of $8.3 million or $0.17 per share, compared to a net loss of $5.4 million or $0.20 per share in the first quarter of 2004 and a loss of $11.2 million or $0.31 per share in the previous quarter. The current quarter's other income included $881,000 of non-cash income related to the revaluation of warrants on the company's balance sheet that moves inversely to the value of the company's stock price. "The results of Nanogen's first quarter show the immediate increase in revenues we expected from our growing product portfolio and license agreements from acquisitions. With renewed vigor in product sales, we are also seeing the benefits of our broader product line of reagents for conducting genetic analysis," said Howard C. Birndorf, Nanogen's chairman of the board and chief executive officer. "By building critical mass, we are accelerating our revenue growth while simultaneously continuing to realize cost efficiencies as we complete the integrations of Epoch Biosciences and SynX. We anticipate further revenue growth during the year as new products begin shipping during the second half of 2005." Nanogen reiterates its 2005 guidance provided when it reported year-end 2004 financial results. The company anticipates that total revenue will increase at least three-fold from 2004 levels based on its larger product portfolio and royalty revenues. Revenue growth should accelerate during 2005 as new products are introduced. Operating expenses are anticipated to rise slightly during the year. Overall, excluding the impact of potential future business combinations, Nanogen expects a continuing improvement in operating results. Webcast of Today's Conference Call Nanogen management will host a conference call today to discuss the first quarter 2005 results at 4:30 p.m. Eastern Time. Audio of management's presentation will be available via live webcast on the investor relations section of Nanogen's corporate website at www.nanogen.com, and will be archived for 90 days. A digital recording of the call will also be available for 48 hours, beginning two hours after the completion of the conference call on May 3, 2005 and can be accessed via telephone at (877) 519-4471 for US/Canada participants, and (973) 341-3080 for international participants. The conference ID, 5984241, will be required to listen to the playback. About Nanogen, Inc. Nanogen's advanced diagnostics provide physicians and patients worldwide with sophisticated information to predict, diagnose and treat disease. Research and clinical reference labs use the highly accurate and reliable NanoChip(R) Molecular Biology Workstation, NanoChip(R) Electronic Microarray and broad suite of analyte specific reagents to develop diagnostic tests for variety of diseases. Nanogen also offers a broad portfolio of patented nucleic acids chemistries and molecular tools that accelerate genomic analysis and are compatible with many systems. The SynX subsidiary offers a line of point-of-care diagnostic tests and is building expertise in cardiac related health conditions. Nanogen's ten years of pioneering research involving nanotechnology may also have future applications in medical diagnostics, biowarfare and other industries. For additional information please visit Nanogen's website at www.nanogen.com. Forward-Looking Statement This press release contains forward-looking statements that are subject to risks and uncertainties, including statements regarding future financial and operating results, estimates of operating expenses and projections of revenue increases. These forward-looking statements are based on current expectations and speak only as of the date hereof. Actual results may differ materially from those set forth in the forward-looking statements, as a result of various factors and uncertainties, including whether new products will be launched, whether any benefits expected from mergers and acquisitions are achieved, whether patents owned or licensed by Nanogen will be developed into products, whether the patents owned by Nanogen offer any protection against competitors with competing technologies, whether products under development can be successfully developed and commercialized, whether results reported by our customers or partners can be identically replicated, and other risks and uncertainties discussed under the caption "Factors That May Affect Results" and elsewhere in Nanogen's Form 10-K most recently filed with the Securities and Exchange Commission. Nanogen disclaims any intent or obligation to update these forward-looking statements. NANOGEN, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par value and share data) As of As of March 31, December 31, 2005 2004 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 12,715 $15,372 Short-term investments 27,134 36,562 Receivables, net of allowance for doubtful accounts of $117 and $176 in 2005 and 2004, respectively 2,246 2,023 Inventories, net 2,117 1,744 Other current assets 1,571 1,741 Total current assets 45,783 57,442 Property and equipment, net 8,114 8,500 Acquired technology rights, net 11,152 11,819 Restricted cash 1,411 1,411 Other assets, net 786 780 Goodwill 96,178 96,072 Total assets $163,424 $ 176,024 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $6,100 $9,923 Deferred revenue 322 420 Common stock warrants 231 1,112 Current portion of debt obligations 909 988 Total current liabilities 7,562 12,443 Debt obligations, less current portion 624 610 Other long-term liabilities 5,484 5,455 Total long-term liabilities 6,108 6,065 Commitments and contingencies Stockholders' equity: Convertible preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued and outstanding at March 31, 2005 and December 31, 2004 -- -- Common stock, $0.001 par value, 135,000,000 shares authorized at March 31, 2005 and December 31, 2004; 47,771,773 and 47,765,581 shares issued and outstanding at March 31, 2005 and December 31, 2004, respectively 48 48 Additional paid-in capital 375,152 374,910 Accumulated other comprehensive loss (134) (174) Deferred compensation (971) (1,184) Accumulated deficit (223,419) (215,162) Treasury stock, at cost, 500,189 shares at March 31, 2005 and December 31, 2004, respectively (922) (922) Total stockholders' equity 149,754 157,516 Total liabilities and stockholders' equity $163,424 $ 176,024 NANOGEN, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) For the Three Months Ended March 31, 2005 2004 Revenues: Product sales $1,210 $1,132 License fees 1,700 152 Sponsored research -- 375 Contracts and grants 266 500 Total revenues 3,176 2,159 Costs and expenses: Cost of product sales 1,146 914 Research and development 4,912 4,348 Selling, general and administrative 5,967 3,575 Amortization of purchased intangible assets 393 -- Total costs and expenses 12,418 8,837 Loss from operations (9,242) (6,678) Other income (expense): Interest income, net 179 102 Other expense (88) (20) Warrant valuation adjustment 881 -- Gain on foreign currency translation 13 1,221 Total other income 985 1,303 Net loss $(8,257) $(5,375) Net loss per share - basic and diluted $(0.17) $(0.20) Number of shares used in computing net loss per share - basic and diluted 47,773 26,936
SOURCE Nanogen, Inc.