Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Thursday, May 15, 2008 CombiMatrix Corp. of Mukilteo looks for capital By Eric Fetters Herald Writer MUKILTEO -- CombiMatrix Corp. warned it could be out of money by the fall, despite a 75 percent increase in the biotechnology firm's revenue during the first quarter. The Mukilteo-based company generated $2 million, up from $1.1 million in the same period last year. The quarter saw $1.1 million from a government contract and $920,000 in sales of CombiMatrix's diagnostic tools and services. Both categories were up dramatically from a year ago. That helped CombiMatrix, which offers DNA tools and services researchers can use for identifying diseases and other lab work, achieve its fifth consecutive quarter of revenue growth. "As we continue to launch additional microarray products and expand the commercial reach of our existing products, we expect our diagnostic revenues to increase and achieve critical mass," Amit Kumar, CombiMatrix's president and chief executive, said in comments accompanying Wednesday's financial report. The problem is the company's spending still outpaces its revenue. Operating expenses for the first quarter totaled $5.5 million, giving CombiMatrix a net loss of $3.4 million. Kumar said CombiMatrix, which started the year with 57 employees, is focused on reducing costs even more. As of March 31, CombiMatrix had $5.5 million in cash and investments, although just under $2 million of that was held in certain auction rate securities. Because the market for those securities recently collapsed, that investment now has a negative fair market value. The company's cash and expected revenue is enough to keep CombiMatrix going through September, Kumar said. "In order for our company to continue as a going concern beyond this point and ultimately to achieve profitability, we will be required to obtain capital from external sources, increase revenues and reduce operating costs," he said. One option the company seriously is exploring is how it can leverage a recent $35.7 million judgment it won in court from its insurance company, Kumar said. Before the first-quarter results were released Wednesday, shares of CombiMatrix fell 6 cents to close trading at $10.15. Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com

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