SDIX Reports First Quarter 2012 Results

SDIX has reported financial results for the quarter ended March 31, 2012.

Revenue for the first quarter of 2012 was $5.6 million, decreasing from $6.6 million for the same period in 2011. This decrease was primarily related to the timing of IVD sales, a softening biopharmaceutical market, and external regulatory changes in the food industry.

Net loss for the first quarter of 2012 was $1.2 million, compared to a net loss of $658,000 for the same period in 2011. Net loss for the first quarter of 2011 included income from discontinued operations of $388,000.

The Company also announced that it has established a collaborative relationship with a top 10 pharmaceutical company with the goal of utilizing the advanced Genomic Antibody Technology (“GAT™”) platform to generate monoclonal antibodies against a GPCR target.

The advanced GAT platform, which builds on SDIX’s antibody generation capabilities, has been shown in internal studies to be effective in raising diverse collections of monoclonal antibodies against GPCR targets.

SDIX will employ its advanced GAT platform for the discovery of monoclonal antibodies against a specific GPCR target chosen by its collaborator.

Resulting antibodies are expected to be incorporated into a clinical assay that is considered essential to this pharmaceutical company’s development of a novel therapeutic.

Regarding the collaboration, Francis M. Di Nuzzo, President and CEO of SDIX, stated, “The initiation of this collaboration marks an important step forward for SDIX. We are pleased to have progressed our advanced GAT™ system to the point where pharmaceutical and biotechnology companies are willing to collaborate with us, using our technology to develop monoclonal antibodies against critical targets.”

Klaus Lindpaintner, Vice President of Research and CSO for SDIX, went on to say, “We believe our advanced GAT™ system can establish a new paradigm in monoclonal antibody development for difficult targets such as GPCRs.”

He added, “This collaboration offers us the opportunity to demonstrate our capabilities with a well-regarded antibody development group within a major pharmaceutical company. We expect to be successful in providing our collaborator with antibodies they have so far been unable to generate."

Commenting on the core business, Mr. Di Nuzzo said, “We are taking aggressive actions in our core Life Science business to increase our order flow and believe these actions will allow us to achieve higher revenue as the year progresses.

In Food Safety, we are focused on growing our Salmonella and Listeria products, and continue to drive our international market expansion. Food Safety revenue increased over the fourth quarter of 2011 and we believe the improvement will continue in subsequent quarters.”

Financials
Gross profit for the first quarter of 2012 was $3.2 million, as compared to $3.6 million for the same period in 2011. Gross margins were 57% for the first quarter of 2012, compared to 56% for the same period in 2011. The revenue from our February 2012 agreement with Becton Dickinson’s BD Diagnostics business unit contributed approximately $900,000 in gross margin during the quarter.

First quarter operating expenses were $4.4 million, a decrease of $303,000 compared to the first quarter of 2011. The overall decrease in SG&A expenses offset the planned R&D investments in SDIX’s next generation GAT platform, which increased to $1.1 million from $863,000 in the first quarter of 2011.

Loss from continuing operations for the first quarter was $1.2 million in 2012, as compared with $1.0 million in 2011. Net loss for the first quarter of 2012 was $1.2 million, or $0.06 per diluted share, compared to a net loss of $658,000, or $0.03 per diluted share, for the same period in 2011.

Life Science Revenues
Life Science revenue decreased to $4.0 million for the first quarter of 2012, as compared to $4.5 million for the same period in 2011. This decrease was primarily related to order timing in the IVD business where large orders from customers result in quarter to quarter variability, coupled with a softer market in the biopharmaceutical area. This was partially offset by $920,000 of revenue from the BD agreement.

Kit Revenues
Food Safety revenue decreased 18%, to $1.5 million, for the first quarter of 2012, as compared to $1.8 million for the same period in 2011. The decrease is primarily attributable to regulatory changes that have moved a number of our customers away from SDIX’s E-coli products to other testing solutions.

As the Company continued to shift focus away from the Ag-GMO business, revenue for the quarter decreased by $81,000 to $180,000.

Balance Sheet
The Company completed the first quarter 2012 with cash and restricted cash of $10.0 million and stockholders’ equity of $19.0 million.