Sequenom, Inc. (SQNM) Q2 2012 Earnings Conference Call July 26, 2012 5:00 PM ET Executives Marcy Graham - Senior Director, Investor Relations Harry Hixson - Chairman and CEO Paul Maier – CFO Ron Lindsay - Director and EVP Bill Welch - SVP, Diagnostics Dirk van den Boom - SVP, Research &Development Analysts Nandita Koshal - Barclays Capital Bill Quirk - Piper Jaffray Brian Weinstein - William Blair Brandon Couillard – Jefferies & Co. David Ferreiro – Oppenheimer & Co. Zarak Khurshid - Wedbush Securities Kevin DeGeeter - Ladenburg Thalmann & Co. Junaid Husain – Dougherty & Company Presentation Operator
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For information about the risks and uncertainties that Sequenom faces, please refer to the risk factors set forth in our recent filings with the Securities and Exchange Commission. Sequenom assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances after today’s call, or to reflect the occurrence of unanticipated events. With that, I would like to now turn the call over to Harry Hixson. Harry?Harry Hixson Thank you, Marcy. Good afternoon and thank you for joining us on today’s call to discuss Sequenom’s results for the second quarter of 2012. We’ve continued to build on our positive first quarter results and I am pleased to report that the adoption rate of Sequenom’s CMM’s MaterniT21 PLUS LDT has continued to exceed our expectations. We ended the second quarter of 2012 with over 20,000 MaterniT21 PLUS samples accessioned since launching the testing service in October of last year. On the basis of this excellent uptake, we have upwardly revised our internal goal of invoicing a minimum of 40,000 MaterniT21 PLUS tests to 50,000 tests for 2012. This is double our original goal of invoicing 25,000 tests in 2012 as announced in January of this year. In the second quarter alone, more than 13,000 MaterniT21 PLUS samples were accessioned. Nearly three times the volume of samples accessioned in the first quarter of this year. At the close of the first quarter of 2012, the 52-week run rate of MaterniT21 PLUS samples accessioned, equates to approximately 30,000 tests. As of the last week of June 2012, the annualized run rate had increased to approximately 65,000 samples accessioned. The positive trajectory of MaterniT21 PLUS test adoption in the market place since its launch in fall of 2011, it’s been extraordinary and we are pleased to report that the MaterniT21 PLUS test is now our largest contributor to diagnostic revenues.
Based on the positive feedback we’ve received from patients and their physicians, we expect this trend to continue in the future. Until such time as we convert from cash to accrual accounting for diagnostic revenues, we will continue to report samples that accessioned at the end of each quarter as a method of providing clear visibility of our growth trajectory and the market acceptance of Sequenom’s CMM’s testing services.Our total revenue growth has been strong, improving 37% in the second quarter over this quarter last year led primarily by growth in revenues from by diagnostics services segments. This increase is largely due to the adoption of the Sequenom’s CMM’s MaterniT21 PLUS LDT, as well as continued increased demand in testing services or cystic fibrosis and to a smaller degree those for age related macular degeneration and Fetal RHD. Our genetic analysis business continues to be a major contributor to total revenues even as the business profile and product mix continues to evolve. However, we did see softness is the overall genetics analysis revenue during the quarter as compared to the same period last year. As market demand for the MaterniT21 PLUS LDT continues to grow, we are again expanding our sales footprint. We will be adding more than 25 additional sales representatives and managers to the Sequenom’s CMM team during the third quarter. This will bring the total number of prenatal diagnostics sales representatives to approximately 75 team members nationwide. We expect this expansion to help reinforce our presence in existing territories and will allow us to enter into new territories and broaden our overall national reach. Read the rest of this transcript for free on seekingalpha.com