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Home > Press > Nanosphere Announces Second Quarter 2008 Results

Abstract:
Nanosphere, Inc. (Nasdaq:NSPH), a leader in the development and commercialization of advanced molecular diagnostics systems, today reported financial results for the second quarter and six months ended June 30, 2008.

Nanosphere Announces Second Quarter 2008 Results

Northbrook, IL | Posted on August 14th, 2008

Revenue from sales of the Verigene System and test cartridges during the second quarter of 2008 was $195,000 compared to $303,000 in the first quarter of 2008, and $51,000 in the fourth quarter of 2007. The sequential revenue decline in the second quarter was due to all new instrument placements being reference and reagent rental agreements, rather than outright sales. Total revenue during the second quarter of 2008 was $195,000 compared to $510,000 a year ago, which consisted of approximately $503,000 of revenues from contracts and government grants and $7,000 in product revenue.

"We continue to be encouraged by the positive reception to the Verigene System in the market. There is pent-up demand for new system placements and cartridge volume in anticipation of continued menu expansion. In the second quarter, our business was impacted by the delay in getting the cystic fibrosis assay into the market. The cystic fibrosis assay is now in final stages of clinical trials and we anticipate filing with the FDA soon," said William Moffitt, Nanosphere's president and chief executive officer.

Added Mr. Moffitt, "While we are disappointed with the time it has taken so far in getting our cystic fibrosis assay to the market and accelerating placements of the Verigene System, this and other tests we anticipate delivering over the next few quarters represent a market opportunity in excess of $1 billion. We believe this expanded menu and the value proposition of each assay will drive accelerated market penetration."

For the six months ended June 30, 2008, revenues were $771,000 compared with $780,000 recorded in the same period in 2007. Product revenues increased to $498,000 for the first six months of 2008 from $54,000 in the same period in 2007 due to Verigene System sales and rentals. Revenues from contracts and government grants were $273,000 for the six months ended June 30, 2008 and $726,000 for the six months ended June 30, 2007.

Since receiving FDA clearance to market the Verigene System last fall, Nanosphere invested in scaling up manufacturing capabilities to meet customer demand for products and to provide for increased capacity to support new product commercialization. As a result of additional investment in new product development, research and development expense increased to $6.0 million for the three months ended June 30, 2008, from $5.3 million for the same period in 2007. For the six months ended June 30, 2008, R&D expenses rose to $11.9 million from $10.2 million for the six months ended June 30, 2007.

Sales, general and administrative expenses increased to $3.8 million for the three months ended June 30, 2008, from $3.1 million for the three months ended June 30, 2007. The $0.7 million increase was due primarily to a $0.3 million increase in sales personnel expenses and other marketing expenses to support the sales of the Verigene System and $0.4 million of public company related expenses including consulting, legal and audit fees. For the six months ended June 30, 2008, SG&A expenses increased to $7.2 million, from $5.3 million for the comparable period a year ago. The $1.9 million increase was due primarily to $0.8 million of public company related expenses including consulting, legal and audit fees, a $0.6 million increase in sales personnel expenses and other marketing expenses to support the sales of the Verigene System and a $0.5 million increase in other sales, general and administrative expenses.

Conference Call Details

The company will hold a live conference call and webcast for investors on Thursday, August 14, 2008 at 5:00 P.M., Eastern Daylight Time. The teleconference can be accessed by dialing 888.680.0869 (U.S./Canada) or 617.213.4854 (international), participant code 28338525. The call will also be broadcast live over the Internet and can be accessed by interested parties at the Investor Relations tab on the Nanosphere website: www.nanosphere.us. For interested individuals unable to join the call or webcast, a replay will be available through August 28, 2008, by dialing 888-286-8010 or for international calls 617-801-6888, pass code 47536961, or on the company's website.

####

About Nanosphere, Inc.
Nanosphere develops, manufactures and markets an advanced molecular diagnostics platform, the Verigene(r) System, for direct genomic and ultra-sensitive protein detection. This easy to use and cost effective platform enables simple, low cost and highly sensitive genomic and protein testing on a single platform. Nanosphere is based in Northbrook, IL.

Except for historical information, the matters discussed in this press release are "forward-looking statements" and are subject to risks and uncertainties. Actual results could differ materially from these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (i) Nanosphere's ability to develop commercially viable products; (ii) Nanosphere's ability to achieve profitability; (iii) Nanosphere's ability to produce and market its products; (iv) Nanosphere's ability to obtain regulatory approval of its products; (v) Nanosphere's ability to protect its intellectual property; (vi) competition and alternative technologies; and (vii) Nanosphere's ability to obtain additional financing, if and when necessary, to support its operations. Additional risks are discussed in the Company's current filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Nanosphere, Inc. Statements of Operations (Unaudited) Three Month Periods Six Month Periods Ended June 30, Ended June 30, ------------------------------------------------------ 2008 2007 2008 2007 ------------ ------------ ------------ ------------ REVENUE: Grant and contract revenue $ -- $ 503,245 $ 272,612 $ 726,503 Product sales 194,715 7,025 498,119 53,670 ------------ ------------ ------------ ------------ Total revenue 194,715 510,270 770,731 780,173 COSTS AND EXPENSES: Cost of product sales 226,176 3,188 575,605 18,367 Research and development 6,028,926 5,277,939 11,871,121 10,219,047 Sales, general, and administrative 3,777,507 3,079,443 7,186,405 5,256,583 ------------ ------------ ------------ ------------ Total costs and expenses 10,032,609 8,360,570 19,633,131 15,493,997 ------------ ------------ ------------ ------------ Loss from operations (9,837,894) (7,850,300) (18,862,400) (14,713,824) OTHER INCOME (EXPENSE): Change in fair value of preferred stock warrants -- (379,599) -- (276,612) Foreign exchange loss (235) (13,770) (24,645) (13,770) Interest expense (545,591) (563,840) (1,130,628) (823,748) Interest income 546,698 374,355 1,478,917 758,433 ------------ ------------ ------------ ------------ Total other income (expense) 872 (582,854) 323,644 (355,697) ------------ ------------ ------------ ------------ NET LOSS (9,837,022) (8,433,154) (18,538,756) (15,069,521) Accumulated convertible preferred stock dividends -- (1,689,812) -- (3,180,329) Convertible preferred stock redemption value adjustment -- -- -- (608,940) ------------ ------------ ------------ ------------ NET LOSS ATTRIBUTABLE TO COMMON STOCK $ (9,837,022) $(10,122,966) $(18,538,756) $(18,858,790) ============ ============ ============ ============ Net loss per common share -- basic and diluted $ (0.44) $ (10.85) $ (0.84) $ (20.22) Weighted average number of common shares outstanding -- basic and diluted 22,202,620 932,646 22,197,395 932,646 Nanosphere, Inc. Condensed Balance Sheets (Unaudited) June 30, December 31, 2008 2007 ------------ ------------ Cash and cash equivalents $93,990,208 $114,312,573 Other current assets 3,653,625 2,674,205 ------------ ------------ Total current assets 97,643,833 116,986,778 Net property and equipment 7,456,955 7,033,597 Intangible assets - net of accumulated amortization 5,090,680 4,930,752 Other assets 144,556 163,553 ------------ ------------ Total assets $110,336,024 $129,114,680 ============ ============ Current liabilities 9,784,806 9,301,903 Long term liabilities 5,495,718 7,462,237 Convertible preferred stock -- -- Total stockholders' equity (deficit) 95,055,500 112,350,540 ------------ ------------ Total liabilities and stockholders' equity $110,336,024 $129,114,680 ============ ============

For more information, please click here

Contacts:
Nanosphere, Inc.
Investors:
Roger Moody, Chief Financial Officer
847-400-9021


The Torrenzano Group
Media:
Rick Anderson
212-681-1700, Ext. 115

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