Gene Logic more than halves loss in quarter

Gene-data seller beats analysts' expectations by 4 cents a share

July 30, 2002|By Julie Bell | Julie Bell,SUN STAFF

Gene Logic Inc. said yesterday that it more than halved its second-quarter loss as revenue increased 46 percent.

But the Gaithersburg supplier of genetic information for drug researchers said its loss for the year likely would be higher than previously anticipated because of slowing customer purchases.

The company reported a net loss of $4.4 million, or 16 cents per share, on revenue of $14.1 million in the second quarter. The results beat the average estimate of four analysts surveyed by Thomson Financial/First Call who predicted the company's loss would be 20 cents a share.

Gene Logic lost $9.4 million, or 35 cents per share, on revenue of $9.6 million, in the second quarter last year.

"Overall, business is challenging but we're on the right track," Chief Executive Officer Mark D. Gessler told analysts yesterday on a conference call.

Among other products, Gene Logic builds databases about the workings of genes and proteins in healthy vs. diseased tissues. It sells subscriptions to the databases to pharmaceutical and biotechnology companies, whose researchers use the information to determine what may be causing disease and how to treat it.

Gene Logic provides products or services to 37 companies in the United States and Europe. But Gessler said customers have slowed purchases for several reasons, including mergers and failed drug applications.

"This has been compounded by budget cuts and cautious spending at capital-starved biotech companies," he said, referring to young companies unable to raise money in a bear market.

Gene Logic said it now expects to lose 93 cents per share for the year, up from its previous guidance of a 74-cent per share loss.

James D. Ackerman, an analyst at Punk Ziegel & Co., downgraded his recommendation on the company's shares to "market perform" from "buy" after expressing some of the same concerns.

He noted then that other suppliers of life sciences companies, including equipment maker Bruker Daltonics Inc., already have reported slower-than-expected sales growth.

Shares of Gene Logic gained 63 cents yesterday to close regular trading at $8.57 on the Nasdaq stock market.

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