Nanogen Reports Preliminary 2005 First Quarter Financial Results

May 03, 2005, 01:00 ET from Nanogen, Inc.

    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
     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, 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
     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
      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.
                     (in thousands, except per share data)
                                                      For the Three Months
                                                        Ended March 31,
                                                     2005            2004
       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.