Two providers of technologies widely used in biopharma reflected similar fortunes as they released fourth-quarter and full-year 2012 results yesterday that showed reduction in red ink, but continuing uncertainty over the future.
Affymetrix vowed to get back in the black this year, following a fourth-quarter 2012 in which it narrowed its GAAP net loss from a year earlier—to $12.3 million or 17 cents per diluted share, compared with a net loss of $14.7 million, or 21 cents per diluted share in the final three months of 2011.
Excluding special items, the non-GAAP net loss was $1.3 million or 2 cents per diluted share, versus $8.3 million or 12 cents per diluted share in Q4 2011.
“We plan to return to growth and profitability in fiscal 2013,” Frank Witney, Ph.D., Affymetrix’s president and CEO, said in a statement. “We had a good finish to 2012, achieving modest growth in our core business during the fourth quarter, which was a very challenging environment for academic spending.”
Uncertainty over the fiscal cliff in Washington and continued concern about the size of eventual federal budget cuts dampened sales among Affy’s customers in universities and other research institutions. That explains why, in its core business of consumables, Affymetrix racked up $53.1 million in revenue during Q4 2012, down 3% from $54.9 million. However, instrument revenue rose more than one third (37%), to $5.2 million from $3.8 million a year earlier.
Saving Affymetrix’ bottom line from sinking further—and boosting its top line—was results from eBioscience, the maker of flow cytometry and immunoassay reagent products that Affy acquired for $315 million cash in June. eBioscience accounted for $18.1 million in new revenue during Q4 2012; Affymetrix did not furnish a net-income number attributable to eBioscience.
However, Affymetrix did say that without eBioscince, its quarterly total revenue would have risen only 2%. Total revenues rose during Q4 to $84.4 million—$76.4 million in product revenue, the remaining $8 million in service and other revenue.
For all of 2012, Affymetrix more than halved its GAAP net loss to $10.7 million, or 15 cents per diluted share, compared with a 2011 net loss of $28.2 million, or 40 cents per diluted share. Non-GAAP net loss last year was $6.8 million or 10 cents per diluted share, an improvement from 2011’s net loss of $13.0 million or 18 cents per diluted share.
Total revenue was $295.6 million—a 3% decrease from 2011 after excluding $37 million from eBioscience.
This year, Affymetrix is expecting better numbers in part from a restructuring projected to achieve about $25 million in annual savings, of which $5 million is in cost-of-goods sold. The company said it expects to record a total charge against Q1 2013 earnings of approximately $7 million, on top of the $1.8 million charge taken in 2012.
At least two analysts share Affy's optimism. "The turnaround story moves from realignment and stabilization to profitable growth. Genotyping and genetic analysis growth stand out, and recent cost cuts better-position Affymetrix to accelerated profitability," Peter Lawson, Ph.D., and Eric Criscuolo of Mizuho Securities wrote in a note to investors.