Solexa sees revenue stream for Genome Analyzer starting in 2Q
Solexa Inc (SLXA), developer of a Genome analysis system, has reported a net loss of $29.7m, or $1.51 a share, for the year ended December 2005, but expects revenue from its ground breaking technology to start flowing in the second quarter of this year.
The company, formed 12 months ago through a merger of Solexa Ltd (based near Cambridge) and Lynx Therapeutics, Inc. (based near San Francisco), said 2005 revenue was $4.2m while total operating costs and expenses were $36.7m. Comparisons with 2004 are not especially relevant as the figures relate only to the former Solexa Ltd.
Solexa reported cash on hand of $38.4m at end December. In January, it closed the second and final private placing of shares and warrants that raised $40m, part of total $65m financing announced in November.
Chief executive John West said "We are proud of our track record since the business combination … in delivering on ambitious and important milestones.
"In December 2005 we introduced our groundbreaking Solexa Genome Analysis System, which we consider a disruptive leap forward in cost-effective DNA sequencing".
The Genome Analysis System will be used to perform a range of analyses including human genome resequencing, gene expression analysis and small-RNA analysis. Solexa expects its first-generation instrument, the 1G Genome Analyzer, to generate more than one billion bases of DNA sequence per run and to enable human genome resequencing below $100,000 per sample, which is about 100 times cheaper than other current state-of-the-art systems.
"We have an equally exciting roadmap for the year ahead," Mr West said.
"Commercially, we will initially target large genome centres and other prospective customers in an early access release, and we expect to begin reporting system sales during the second quarter of 2006". He said they had been talking to several potential customers for nine months.
"On the operational side, we expect to add staff to sales, marketing and manufacturing to support broad commercial release to other categories of customers, including academic and government core labs, commercial sequencing companies and pharmaceutical and biotech companies. We intend to make both sequencing and expression profiling applications available this year.
In September last year the company recruited as Chief Scientist Dr David Bentley (pictured) from the Wellcome Trust Sanger Institute where he was Head of Human Genetics and a driving force behind the Institute’s immense contributions to the Human Genome Project, The SNP Consortium, and the International Haplotype Mapping project. At Solexa, Dr. Bentley spearheads the DNA sequencing applications development and projects.
In 2006 the company plans to sequence a human genome as an important validation for its system.
No financial guidance for 2006
VP and Chief Financial Officer Linda Rubenstein said the company would not be providing financial guidance for 2006, but that they would in subsequent years, when it expects that increasing sales of their new instruments will generate a more stable revenue steam.
In 2005 revenue was mainly from service fees generated from the genomics services business and does not yet reflect any contribution from the Genome Analysis System.
The company's shares are listed on Nasdaq. They shed about 1% to reach $9.51 by mid afternoon, valuing Solexa at $250m.
29th March 2006
