IRVINE, Calif., Aug. 16, 2010 (GLOBE NEWSWIRE) -- CombiMatrix Corporation (Nasdaq:CBMX - News) today reported financial results for the three month period ended June 30, 2010 and provided operational updates on its strategic restructuring plan. Key highlights for the second quarter and through the date of this release include:
* 51% increase in diagnostic lab revenues from Q2-2009 to Q2-2010
* 12% sequential increase in diagnostic lab revenues from Q1-2010 to Q2-2010
* Shut-down of CustomArray business substantially complete; revised estimate of total cash restructuring costs reduced to $975,000 - significantly below initial estimates of $1.5 million.
* Relocation to Irvine, California completed in early August, approximately one month ahead of schedule.
* Recognized one-time, non-cash impairment charges of approximately $20.3 million; ended June 30, 2010 with $10.2 million in cash.
“The first stage of our strategic restructuring plan is in its final phase and is running ahead of schedule and below budget,” stated Mark McGowan, Chairman and Chief Executive Officer of CombiMatrix. “With phase one of our restructuring drawing to a close, the next step in our plan was to hire a highly qualified, commercially oriented CEO and focus company efforts intensely on our Molecular Diagnostics business. After working through an extensive process in conjunction with Caldwell Partners, involving multiple rounds of vetting and drawing from a large number of highly qualified candidates, CBMX is delighted to have retained Judd Jessup, former CEO of US LABS, as our permanent CEO, effective August 23, 2010. Mr. Jessup has extensive experience within the healthcare and managed care industries, and a proven track record with turnaround situations analogous to present-day CombiMatrix. He is the ideal candidate for the job ahead,” concluded Mr. McGowan.
“I am excited about the opportunity ahead of us at CombiMatrix,” noted Judd Jessup. “I appreciate the ‘heavy lifting’ which has already been accomplished during the restructuring and look forward to focusing on continuing to build a high performance laboratory,” concluded Mr. Jessup.
Judd Jessup has over 35 years of experience in the healthcare and managed care industries. Most recently he was Chief Executive Officer of US LABS, a national laboratory which provides cancer diagnostic and genetic testing services, from 2002 to 2005. He has extensive background in the managed care industry having served as President of the Health Plans Division for FHP International from 1994 to 1996 as well as the President of TakeCare, Inc., a publicly traded HMO operating in California, Colorado, Illinois and Ohio until it was sold to FHP. He is a successful entrepreneur with the ability to execute strategic plans to achieve the optimum level of performance for stakeholders. He has repeatedly built effective management teams utilizing his effective leadership and management style. Mr. Jessup currently serves on the Board of Directors of Corvel Corporation and NovaMed, Inc, both publicly traded companies.
Second Quarter Business Highlights and Recent Developments
On April 19, 2010, the Company announced a strategic and operational restructuring plan to significantly reduce operating costs, increase the focus on the Company’s diagnostic services business and transition senior management. After the restructuring, CombiMatrix will be focused primarily on its diagnostics services business, including increasing utilization of its existing tests, expanding the test menu, increasing the number of customers and partners, and improving reimbursement for its testing services. As a component of this plan, the Company initiated a search for a new President and Chief Executive Officer, which the Company completed on August 11th, 2010. On June 30, 2010, Dr. Amit Kumar stepped down from his role as President and Chief Executive Officer and Mr. Mark McGowan, the current Chairman of the Board of Directors, assumed this role on an interim basis. Also as part of the restructuring, Mr. Tom Akin and Dr. Brooke Anderson resigned from the Company’s Board of Directors in June 2010. Mr. Rigdon Currie was named Chairman of the Audit Committee. The Company also ceased M&A activities during the second quarter.
On June 15, 2010, the Company announced that CMDX had received final licensure documentation and approvals in order to begin billing for its suite of array-based diagnostic tests to Medicare.
On August 11, 2010, CombiMatrix hired Judd Jessup as its permanent President and Chief Executive Officer, and was also appointed to serve as a director on the Company’s Board. Mr. Jessup will begin full-time duties on August 23, 2010, at which time Mr. McGowan will discontinue serving as Interim President and CEO and will remain Chairman of the Board of Directors.
ABOUT COMBIMATRIX CORPORATION
CombiMatrix Corporation is a diversified biotechnology business that primarily operates in the field of genetic analysis and molecular diagnostics through its wholly owned subsidiary, Combimatrix Molecular Diagnostics, Inc. (“CMDX”). CMDX operates as a diagnostics reference laboratory that provides genetic and other diagnostics services to physicians, hospitals and clinics.
Leuchemix Inc. (“Leuchemix”), a minority-owned subsidiary, is developing a series of compounds to address a number of oncology-related diseases. Leuchemix’s first compound has entered initial clinical trials in the United Kingdom.
Additional information about CombiMatrix Corporation is available at www.combimatrix.com or by calling 1-800-985-CBMX (2269). Additional information about CMDX is available at www.cmdiagnostics.com or by calling 1-800-710-0624.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This news release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon our current expectations and speak only as of the date hereof. Our actual results may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including the recent economic slowdown affecting technology companies, our ability to successfully develop products, rapid technological change in our markets, changes in demand for our future products, legislative, regulatory and competitive developments and general economic conditions. Our periodic and other SEC filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
