Just got off of the CC. Much of what they said recapped the PR. However, there were some other bits.
Most important, and negative, is the termination of the Third Wave contract research deal. TWTI is apparently in trouble, having auctioned off a bunch of equipment, and must be trying to focus. But EBIO considers the termination a contractual breach and has gone to arbitration. Resolution not expected until some time next year. In the mean time, EBIO expects no more revenue from this deal.
Despite this, the company still expects to meet its goals of breakeven this quarter, and positive cash flow next year. CF taking longer because of the need to finance higher accounts receivable and other working capital needs (covered by the Silicon Valley Bank financing facility, which they have already drawn most of). They still expect to meet that goal without further dilution, unless they see something really worth it.
However revenue range for FY '02 has been cut to the lower end of the range: it was $11 to $13 million, now it's $11.1 to $11.3 million. EPS guidance unchanged. Guidance for the 4th Q: Breakeven EPS. Revenue in $3.7 to $3.9 million range. Product sales $1.5 to $1.6 million. I gather the difference will mostly be in royalty sales (nothing wrong with that: it goes straight to the bottom line), as contract research revenue seems to be drying up for the time being.
Eclipse probes could be used to confirm results from Amersham's Codelink microarrays, likely to be sold in tandem by Amersham reps, who are now fully trained.
Custom products will be the same for both QGENF and Amersham customers: at their websites, customers enter targets sequences and EBIO makes the primers and probes. This is not on the Amersham website yet, but will be "soon." Catalog products will be specified by Amersham and QGENF and will be different. Both will make gene expression products, but Amersham also markets for SNPs, while QGENF does not. If I understood it correctly the deals are structured differently, with QGENF deal being more of a royalty and milestone type, while in the Amersham deal, revenue is recognized as product revenue.
ABI royalty income increased this quarter, but I gather that's from a ramp in the contractual minimum, as well as a restructuring of the agreement that shifts revenue from product to royalty category. Contract research project with ABI is now over.
OpEx was way down, due to better product mix (fewer low margin chemical intermediates shipped to ABI, sales from Eclipse shipment to Amersham) manufacturing improvements, and economies of scale. COGS was also down sequentially a few per cent.
QGENF paying "substantial" initial technology access fee "in the ballpark" with those received from the ABI and Third Wave deals.