Nanosphere reports net loss of $13.8M for second-quarter 2010

Nanosphere, Inc. (Nasdaq:NSPH), a leader in the development and commercialization of advanced molecular diagnostics systems, today reported financial results for the second quarter ended June 30, 2010.

Revenues for the second quarter of 2010 were $0.5 million compared to $0.4 million for the second quarter of 2009 and $0.8 for the first quarter of 2010. Product sales were $0.3 million for the second quarter of 2010 as compared to $0.2 million for the 2009 second quarter. Revenues for the second quarter of 2010 included $0.2 million of service revenue related primarily to the assay development contracts with a major pharmaceutical company. Cash at the end of the second quarter of 2010 was $57.7 million.

"We continue to make progress against our milestones for expanding the test menu for the Verigene System," said William Moffitt, Nanosphere's president and chief executive officer. "The tests in development address critical market needs, ranging from faster, more accurate infectious disease assays to pharmacogenetic assays, where testing at the point-of-care that enables timely and accurate therapy is becoming increasingly important."

For the second quarter of 2010, research and development expenses increased to $4.6 million from $4.4 million in the second quarter of 2009 due to increased spending on clinical trial materials.

Sales, general and administrative expenses increased from $3.7 million for the second quarter of 2009 to $9.1 million for the second quarter of 2010 due primarily to a $3.5 million contingency reserve and $1.5 million in litigation expenses related to a patent dispute with Eppendorf AG.

While the company is prepared to vigorously defend its position in the patent dispute, it has begun settlement discussions with Eppendorf and has recorded a contingency reserve associated with the potential settlement of the litigation.

Net loss was $13.8 million for the second quarter of 2010 as compared with $8.4 million for the same period in 2009. The entire increase in net loss was driven by the Eppendorf matter and non-cash stock compensation expense.