SEQUENOM Reports First Quarter Financial Results

Business Bolstered by Seven MassARRAY(TM) System Placements and Expanding

Genomics Business



Apr 24, 2001, 01:00 ET from SEQUENOM, Inc.

    SAN DIEGO, April 24 /PRNewswire Interactive News Release/ -- SEQUENOM(TM),
 Inc. (Nasdaq: SQNM) today reported financial results for the first quarter
 ended March 31, 2001.  Revenue for the quarter increased to $5.2 million
 compared to $1.6 million for the first quarter in 2000.  Revenue growth was
 driven by an increase in MassARRAY system and consumables sales and revenue
 from genomics services provided to the Company's collaborators.
     SEQUENOM's total costs and expenses for the quarter were $14.3 million
 compared to $13.0 million in total costs and expenses for the first quarter of
 2000.  The increase in expenses during the quarter was primarily driven by the
 establishment of the Company's new high-throughput genotyping facility in San
 Diego, expansion of single nucleotide polymorphism (SNP) and gene validation
 efforts for collaborative and internal programs, and a corresponding increase
 in headcount.
     The net loss for the first quarter was $7.0 million, or $0.29 per diluted
 share, compared to a net loss of $14.3 million, or $0.65 per pro forma diluted
 share for the first quarter of 2000.  On March 31, 2001, the Company held
 cash, cash equivalents and short-term investments totaling $128.7 million.
 Highlights during the quarter included:
 
     -- Novel gene target discoveries using SEQUENOM's disease gene discovery
        program.  SEQUENOM has identified more than 30 candidate disease genes
        that indicate an impact upon the health of 2 percent to 8 percent of a
        population representative of North America.  The Company continues to
        file patents for all candidate genes it discovers using its disease
        gene discovery program, which is based on the Company's ability to
        screen all genes in the human genome across large populations and its
        proprietary DNA bank.  SEQUENOM is using this strategy to identify and
        prioritize candidate disease genes and related drug targets affecting
        large segments of the population.  The Company plans to license this
        information to biotech and pharmaceutical partners.
     -- Validated medical utility of SNPs and genes. SEQUENOM has significant
        internal efforts and continues to form collaborations with leading
        genomics companies to validate SNPs in various ethnic and patient
        groups and to identify genes with medical utility.  During the quarter,
        SEQUENOM announced collaborations with GlaxoSmithKline to study type 2
        diabetes mellitus and the Genomics Institute of the Novartis Research
        Foundation to create a high-quality SNP map of the mouse genome.
        SEQUENOM typically retains intellectual property and revenue sharing
        rights to discoveries and downstream product or information sales from
        its collaborations.
     -- Progress updates on Incyte Genomics and GlaxoSmithKline collaborations.
        SEQUENOM and Incyte Genomics have achieved initial results from their
        collaboration, including the creation of validated SNP assays expected
        to cover approximately one-third of all gene transcripts in the human
        genome.  The initial set of validated assays were created in a period
        of six months using SNPs from Incyte's LifeSeq Gold database and
        SEQUENOM's proprietary MassARRAY technology.  SEQUENOM and
        GlaxoSmithKline completed a project using MassARRAY to screen hundreds
        of SNPs over patient and control groups.  The scope of the work
        involved the identification of a narrow target region containing a
        susceptibility gene for type 2 diabetes, a critical step in determining
        leads for new diagnostic tests and therapeutics.
     -- Strong demand for MassARRAY technology.  SEQUENOM continues to build
        upon its leadership position in providing high-throughput genotyping
        systems, software and related consumables.  The Company has sold
        29 systems since its commercial launch at the beginning of 2000.  The
        seven systems sold during the quarter included Quest Diagnostics,
        HiberGen Limited, Korea Advanced Institute of Science and Technology
        (KAIST), Galileo Genomics, a second system to the Whitehead Institute,
        and two undisclosed locations. SEQUENOM's Japanese distributor Nissei
        Sangyo Co., Ltd. also sold a system to Japan's National Cancer Center
        Research Institute.
     -- Expansion of SNP assay portfolio as a value-added product offering.
        SEQUENOM has created the industry's largest portfolio of SNP assays
        using its assay design software and MassARRAY technology.  The
        Company's portfolio now consists of 1.3 million SNP assays, 60,000 of
        which have been converted to practice.  An assay is a test that enables
        a SNP to be analyzed and validated for its medical utility.  SEQUENOM's
        portfolio covers virtually all genes in the human genome, a key
        prerequisite to perform full genome screens for the systematic
        identification of genes linked to disease.
     -- Technology advancements. During the quarter, SEQUENOM commercially
        launched its homogeneous MassEXTEND(TM) (hME) assay, a new product that
        dramatically reduces the required reaction chemicals and enzymes,
        sample volumes and cost per sample.  All hME reactions occur on a
        single plate, thereby eliminating the need for sample transfers and
        increasing MassARRAY system capacity.
     -- Expanded patent protection. In January, SEQUENOM announced Notices of
        Allowance from the United States Patent and Trademark Office for two
        key patents for a broad spectrum of methods to analyze DNA or other
        nucleic acids using mass spectrometry.  The first patent broadly covers
        detection of target nucleic acids by mass spectrometry for genotyping
        in all genomes, including humans, plants and animals.  The second
        covers detection of target nucleic acids using mass spectrometry in
        combination with a variety of primer extension reactions.
 
     "Milestones and growth achieved during the first quarter have bolstered
 both our genomics and systems businesses, and we are aggressively expanding
 our leadership position in the market," said Toni Schuh, Ph.D., SEQUENOM's
 President and Chief Executive Officer.  "In addition to our significant
 revenue growth rate, we are particularly pleased with progress made using our
 disease gene discovery program.  The identification of more than 30 candidate
 disease genes within about six months is impressive proof of the outstanding
 performance of the MassARRAY system.  This also demonstrates our ability to
 capture a strategic intellectual property position covering candidate genes
 with validated medical utility.  By the very nature of our approach, we know
 that the candidate genes identified impact the health of large segments of the
 population.  We are performing similar studies through collaborations, many of
 which are the largest of their kind in the industry.
     "Within our systems business, we continue to meet an outstanding demand
 for our MassARRAY product line.  Our customers choose the MassARRAY system
 because it scores high in all critical performance parameters required of
 large-scale genotyping studies.  These parameters include automated and
 efficient SNP assay design, high data precision when analyzing pooled samples
 for allele frequency determination, highest data quality for genotyping
 applications, and throughput and cost effectiveness that is second to none.
 Combined, the technological advantages of our MassARRAY system are enabling a
 new level in large-scale genetic analysis."
 
     Webcast of Conference Call
     SEQUENOM's management will hold a conference call today at 10:00 am
 Eastern Time to discuss the first quarter results, milestones and guidance for
 the remainder of 2001.  A live webcast is available at
 http://www.videonewswire.com/SEQUENOM/042401/ and through a link that is
 posted on SEQUENOM's website at www.sequenom.com.  A telephone replay of the
 conference call also will be available for 24 hours at 800-633-8284 or
 858-812-6440, reservation number 18507414.  The webcast will be available on
 SEQUENOM's website through May 1, 2001.
 
     About SEQUENOM
     SEQUENOM is leading a worldwide effort to identify genes and genetic
 variations with significant impact on human health.  Using its innovative
 technologies, information and scientific strategy, the Company is rapidly
 translating data generated from the Human Genome Project into medically
 important applications.  Breaking through the limitations of traditional
 research, SEQUENOM's MassARRAY product line, SNP assay portfolio and disease
 gene discovery program are generating results that position SEQUENOM and its
 customers and collaborators to quickly capture novel leads to utilize in new
 genetics-based diagnostics, drugs and therapies.
 
     All statements in this press release that are not historical are
 forward-looking statements within the meaning of the Securities Exchange Act
 of 1934 as amended.  Such forward-looking statements are subject to factors
 that could cause actual results to differ materially for SEQUENOM from those
 projected.  Those factors include risks and uncertainties relating to
 technological approaches of SEQUENOM and its collaborators and competitors,
 product development, manufacturing, market acceptance, cost and pricing of
 SEQUENOM products, dependence on collaborative partners and commercial
 customers, successful performance under collaborative and commercial
 agreements, competition, the intellectual property of others, patent
 protection and other risk factors discussed from time to time in SEQUENOM's
 reports and filings with the Securities and Exchange Commission, including
 SEQUENOM's Annual Report on Form 10-K for the year ended December 31, 2000.
 SEQUENOM expressly disclaims any obligation or undertaking to release publicly
 any updates or revisions to any forward-looking statements contained herein to
 reflect any change in SEQUENOM's expectations with regard thereto or any
 change in events, conditions, or circumstances on which any such statements
 are based.
 
 
     SEQUENOM, Inc.
     Consolidated Financial Statements
     (in thousands, except per share data)
 
     Consolidated Summaries of Operations
                                                         Three Months Ended
                                                             March 31,
                                                       2001           2000
                                                            (Unaudited)
     Revenues:
       Product                                         $3,710         $1,451
       Services                                         1,471             --
       Research                                            67            124
         Total revenues                                 5,248          1,575
 
     Costs and expenses:
       Cost of product and service revenue              4,153          1,028
       Research and development expenses                5,290          4,237
       Selling, general and administrative expenses     4,526          5,212
       Amortization of deferred compensation              291          2,498
         Total costs and expenses                      14,260         12,975
 
     Operating loss                                    (9,012)       (11,400)
 
     Interest income                                    2,088          1,539
     Interest expense                                     (73)        (4,480)
     Other income (expense), net                          (33)            16
 
     Net loss                                         ($7,030)      ($14,325)
 
     Historical net loss per share,
      basic and diluted                                ($0.29)        ($0.85)
 
     Historical weighted average
      shares outstanding, basic and diluted        24,317,175     16,803,697
 
     Pro forma net loss per share,
      basic and diluted (1)                                           ($0.65)
 
     Pro forma weighted average
      shares outstanding, basic and diluted                       22,057,958
 
      (1) The pro forma net loss in 2000 was calculated as if our convertible
          preferred stock and 4.0 million German deutsche mark convertible
          long-term debt, both of which converted into common stock upon the
          closing of our initial public offering in February 2000, were
          converted into shares of our common stock on the date of their
          issuance.
 
     Consolidated Balance Sheet Information
                                                     March 31,    December 31,
                                                       2001           2000
                                                    (Unaudited)
     Assets
       Cash, cash equivalents,
        and short-term investments                   $128,646       $138,424
       Other current assets                            18,537         15,590
       Equipment and leasehold improvements, net        9,580          8,118
       Other assets                                     3,830          4,130
         Total assets                                $160,593       $166,262
 
     Liabilities and Stockholders' Equity
       Deferred revenue                                $9,526        $10,580
       Other liabilities                               12,522         10,743
       Stockholders' equity                           138,545        144,939
         Total liabilities and stockholders'
          equity                                     $160,593       $166,262
 
 
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SOURCE SEQUENOM, Inc.
    SAN DIEGO, April 24 /PRNewswire Interactive News Release/ -- SEQUENOM(TM),
 Inc. (Nasdaq: SQNM) today reported financial results for the first quarter
 ended March 31, 2001.  Revenue for the quarter increased to $5.2 million
 compared to $1.6 million for the first quarter in 2000.  Revenue growth was
 driven by an increase in MassARRAY system and consumables sales and revenue
 from genomics services provided to the Company's collaborators.
     SEQUENOM's total costs and expenses for the quarter were $14.3 million
 compared to $13.0 million in total costs and expenses for the first quarter of
 2000.  The increase in expenses during the quarter was primarily driven by the
 establishment of the Company's new high-throughput genotyping facility in San
 Diego, expansion of single nucleotide polymorphism (SNP) and gene validation
 efforts for collaborative and internal programs, and a corresponding increase
 in headcount.
     The net loss for the first quarter was $7.0 million, or $0.29 per diluted
 share, compared to a net loss of $14.3 million, or $0.65 per pro forma diluted
 share for the first quarter of 2000.  On March 31, 2001, the Company held
 cash, cash equivalents and short-term investments totaling $128.7 million.
 Highlights during the quarter included:
 
     -- Novel gene target discoveries using SEQUENOM's disease gene discovery
        program.  SEQUENOM has identified more than 30 candidate disease genes
        that indicate an impact upon the health of 2 percent to 8 percent of a
        population representative of North America.  The Company continues to
        file patents for all candidate genes it discovers using its disease
        gene discovery program, which is based on the Company's ability to
        screen all genes in the human genome across large populations and its
        proprietary DNA bank.  SEQUENOM is using this strategy to identify and
        prioritize candidate disease genes and related drug targets affecting
        large segments of the population.  The Company plans to license this
        information to biotech and pharmaceutical partners.
     -- Validated medical utility of SNPs and genes. SEQUENOM has significant
        internal efforts and continues to form collaborations with leading
        genomics companies to validate SNPs in various ethnic and patient
        groups and to identify genes with medical utility.  During the quarter,
        SEQUENOM announced collaborations with GlaxoSmithKline to study type 2
        diabetes mellitus and the Genomics Institute of the Novartis Research
        Foundation to create a high-quality SNP map of the mouse genome.
        SEQUENOM typically retains intellectual property and revenue sharing
        rights to discoveries and downstream product or information sales from
        its collaborations.
     -- Progress updates on Incyte Genomics and GlaxoSmithKline collaborations.
        SEQUENOM and Incyte Genomics have achieved initial results from their
        collaboration, including the creation of validated SNP assays expected
        to cover approximately one-third of all gene transcripts in the human
        genome.  The initial set of validated assays were created in a period
        of six months using SNPs from Incyte's LifeSeq Gold database and
        SEQUENOM's proprietary MassARRAY technology.  SEQUENOM and
        GlaxoSmithKline completed a project using MassARRAY to screen hundreds
        of SNPs over patient and control groups.  The scope of the work
        involved the identification of a narrow target region containing a
        susceptibility gene for type 2 diabetes, a critical step in determining
        leads for new diagnostic tests and therapeutics.
     -- Strong demand for MassARRAY technology.  SEQUENOM continues to build
        upon its leadership position in providing high-throughput genotyping
        systems, software and related consumables.  The Company has sold
        29 systems since its commercial launch at the beginning of 2000.  The
        seven systems sold during the quarter included Quest Diagnostics,
        HiberGen Limited, Korea Advanced Institute of Science and Technology
        (KAIST), Galileo Genomics, a second system to the Whitehead Institute,
        and two undisclosed locations. SEQUENOM's Japanese distributor Nissei
        Sangyo Co., Ltd. also sold a system to Japan's National Cancer Center
        Research Institute.
     -- Expansion of SNP assay portfolio as a value-added product offering.
        SEQUENOM has created the industry's largest portfolio of SNP assays
        using its assay design software and MassARRAY technology.  The
        Company's portfolio now consists of 1.3 million SNP assays, 60,000 of
        which have been converted to practice.  An assay is a test that enables
        a SNP to be analyzed and validated for its medical utility.  SEQUENOM's
        portfolio covers virtually all genes in the human genome, a key
        prerequisite to perform full genome screens for the systematic
        identification of genes linked to disease.
     -- Technology advancements. During the quarter, SEQUENOM commercially
        launched its homogeneous MassEXTEND(TM) (hME) assay, a new product that
        dramatically reduces the required reaction chemicals and enzymes,
        sample volumes and cost per sample.  All hME reactions occur on a
        single plate, thereby eliminating the need for sample transfers and
        increasing MassARRAY system capacity.
     -- Expanded patent protection. In January, SEQUENOM announced Notices of
        Allowance from the United States Patent and Trademark Office for two
        key patents for a broad spectrum of methods to analyze DNA or other
        nucleic acids using mass spectrometry.  The first patent broadly covers
        detection of target nucleic acids by mass spectrometry for genotyping
        in all genomes, including humans, plants and animals.  The second
        covers detection of target nucleic acids using mass spectrometry in
        combination with a variety of primer extension reactions.
 
     "Milestones and growth achieved during the first quarter have bolstered
 both our genomics and systems businesses, and we are aggressively expanding
 our leadership position in the market," said Toni Schuh, Ph.D., SEQUENOM's
 President and Chief Executive Officer.  "In addition to our significant
 revenue growth rate, we are particularly pleased with progress made using our
 disease gene discovery program.  The identification of more than 30 candidate
 disease genes within about six months is impressive proof of the outstanding
 performance of the MassARRAY system.  This also demonstrates our ability to
 capture a strategic intellectual property position covering candidate genes
 with validated medical utility.  By the very nature of our approach, we know
 that the candidate genes identified impact the health of large segments of the
 population.  We are performing similar studies through collaborations, many of
 which are the largest of their kind in the industry.
     "Within our systems business, we continue to meet an outstanding demand
 for our MassARRAY product line.  Our customers choose the MassARRAY system
 because it scores high in all critical performance parameters required of
 large-scale genotyping studies.  These parameters include automated and
 efficient SNP assay design, high data precision when analyzing pooled samples
 for allele frequency determination, highest data quality for genotyping
 applications, and throughput and cost effectiveness that is second to none.
 Combined, the technological advantages of our MassARRAY system are enabling a
 new level in large-scale genetic analysis."
 
     Webcast of Conference Call
     SEQUENOM's management will hold a conference call today at 10:00 am
 Eastern Time to discuss the first quarter results, milestones and guidance for
 the remainder of 2001.  A live webcast is available at
 http://www.videonewswire.com/SEQUENOM/042401/ and through a link that is
 posted on SEQUENOM's website at www.sequenom.com.  A telephone replay of the
 conference call also will be available for 24 hours at 800-633-8284 or
 858-812-6440, reservation number 18507414.  The webcast will be available on
 SEQUENOM's website through May 1, 2001.
 
     About SEQUENOM
     SEQUENOM is leading a worldwide effort to identify genes and genetic
 variations with significant impact on human health.  Using its innovative
 technologies, information and scientific strategy, the Company is rapidly
 translating data generated from the Human Genome Project into medically
 important applications.  Breaking through the limitations of traditional
 research, SEQUENOM's MassARRAY product line, SNP assay portfolio and disease
 gene discovery program are generating results that position SEQUENOM and its
 customers and collaborators to quickly capture novel leads to utilize in new
 genetics-based diagnostics, drugs and therapies.
 
     All statements in this press release that are not historical are
 forward-looking statements within the meaning of the Securities Exchange Act
 of 1934 as amended.  Such forward-looking statements are subject to factors
 that could cause actual results to differ materially for SEQUENOM from those
 projected.  Those factors include risks and uncertainties relating to
 technological approaches of SEQUENOM and its collaborators and competitors,
 product development, manufacturing, market acceptance, cost and pricing of
 SEQUENOM products, dependence on collaborative partners and commercial
 customers, successful performance under collaborative and commercial
 agreements, competition, the intellectual property of others, patent
 protection and other risk factors discussed from time to time in SEQUENOM's
 reports and filings with the Securities and Exchange Commission, including
 SEQUENOM's Annual Report on Form 10-K for the year ended December 31, 2000.
 SEQUENOM expressly disclaims any obligation or undertaking to release publicly
 any updates or revisions to any forward-looking statements contained herein to
 reflect any change in SEQUENOM's expectations with regard thereto or any
 change in events, conditions, or circumstances on which any such statements
 are based.
 
 
     SEQUENOM, Inc.
     Consolidated Financial Statements
     (in thousands, except per share data)
 
     Consolidated Summaries of Operations
                                                         Three Months Ended
                                                             March 31,
                                                       2001           2000
                                                            (Unaudited)
     Revenues:
       Product                                         $3,710         $1,451
       Services                                         1,471             --
       Research                                            67            124
         Total revenues                                 5,248          1,575
 
     Costs and expenses:
       Cost of product and service revenue              4,153          1,028
       Research and development expenses                5,290          4,237
       Selling, general and administrative expenses     4,526          5,212
       Amortization of deferred compensation              291          2,498
         Total costs and expenses                      14,260         12,975
 
     Operating loss                                    (9,012)       (11,400)
 
     Interest income                                    2,088          1,539
     Interest expense                                     (73)        (4,480)
     Other income (expense), net                          (33)            16
 
     Net loss                                         ($7,030)      ($14,325)
 
     Historical net loss per share,
      basic and diluted                                ($0.29)        ($0.85)
 
     Historical weighted average
      shares outstanding, basic and diluted        24,317,175     16,803,697
 
     Pro forma net loss per share,
      basic and diluted (1)                                           ($0.65)
 
     Pro forma weighted average
      shares outstanding, basic and diluted                       22,057,958
 
      (1) The pro forma net loss in 2000 was calculated as if our convertible
          preferred stock and 4.0 million German deutsche mark convertible
          long-term debt, both of which converted into common stock upon the
          closing of our initial public offering in February 2000, were
          converted into shares of our common stock on the date of their
          issuance.
 
     Consolidated Balance Sheet Information
                                                     March 31,    December 31,
                                                       2001           2000
                                                    (Unaudited)
     Assets
       Cash, cash equivalents,
        and short-term investments                   $128,646       $138,424
       Other current assets                            18,537         15,590
       Equipment and leasehold improvements, net        9,580          8,118
       Other assets                                     3,830          4,130
         Total assets                                $160,593       $166,262
 
     Liabilities and Stockholders' Equity
       Deferred revenue                                $9,526        $10,580
       Other liabilities                               12,522         10,743
       Stockholders' equity                           138,545        144,939
         Total liabilities and stockholders'
          equity                                     $160,593       $166,262
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X72748820
 
 SOURCE  SEQUENOM, Inc.