25 Aug 2011: NorDiag had a healthy growth of 62.5 % in operating revenues in the second quarter compared with same period last year. There has been a promising progress for the Bullet instrument, and Arrow sales are on level with Q1. New partnerships are starting to generate income, and first prototype of the new integrated instrument is close to delivery. At the same time, the cash situation is overshadowing the operational development.
 
The Cash position
The cash position was NOK 7 million by the end of Q2.  A NOK 5 million credit line was established in July. A 2nd payment from sale of HLA business of SEK 3 million is expected in October. The Company will need to attract additional financial resources in Q3-2011.The Company is assessing its financial and strategic  alternatives, and is in active dialogue with its largest shareholders and other potential investors, actively evaluate financing size and transaction structures. DnB NOR Markets has been appointed as financial advisor. Break-even run-rate on cash flow is expected to be reached in 2013. The capital needed to finance the Company to cash flow break-even is estimated to be in the range of NOK 25 -35 million.
 
Financial and operational development
NorDiag had operating revenues of NOK 16.3 million in the first half of 2011 compared with NOK 12.2 million in 1H-2010. This gives an increase of 34% in 1H-2011 vs 1H-2010. Corresponding figures in Q2-2011 were NOK 8.6 million compared to Q2-2010 of NOK 5.3 million; an increase of 62.5 %. The Q2-2011 sales are up with NOK 0.9 million from NOK 7.7 million in Q1-2011. 
 
NorDiag sold 45 Arrow instruments in Q2-2011, which gives an accumulated number of instruments sold by June 30 2011 amounted to 337 Arrow instruments. 2 new Bullet instruments were sold in Q2 2011, and one Bullet has been leased out. "We are also taking actions to fuel the sale of kits and consumables better, explains CEO Mårten Wigstøl: " We have  actively taken back unsold instruments ("sleepers") from distributors and placed them with customers to increase sales of kits and consumables. "
 
The sale of Arrow kits is picking up, and ended 16 % higher than previous quarter. Bullet kit sales decreased from 2.5 million in Q1-2011 to NOK 2.1 million in Q2-2011, due to fluctuations in take out from established customers, but all indicators are pointing towards a higher sales of Bullet consumables second half of the year.. "The sale of kits and consumables has been delayed, but we expect a major increase as instruments reach the laboratories and are in routine use, " comments Wigstøl.
 
More partnerships generate revenues
Partnerships and OEM agreements are key elements in NorDiag's sale strategy. OEM-partners Seegene and Hain Lifescience have contributed strongly to the growth so far. After a break first quarter, Seegene placed a new instrument order in Q2. The profitsharing agreements  with Molzym and  Precision Science Systems (PSS) are starting to generate revenue. "Although we also push distributor sales, it is no doubt that strategic partnerships and OEM-agreements are a key to success," says Wigstøl, "in that respect we have very encouraging discussions with new candidates now."
 
First generation integrated system in H2-2011
The development of an integrated system based on the Arrow platform is followed with interest by partners. A first generation prototype will be delivered to a partner in H2 2011."The second generation will be a modular concept, which can be tailor made to partner needs;" Wigstøl explains and continues: "Launch of this integrated system will lift the market opportunities for our technology to a new level, and drive the sale of kits and consumables beyond the break-even level."
 
Report and presentation enclosed.
 
Contact:
CEO Mårten Wigstøl                     Phone. +47 911 65775
CFO Tone Kvåle                          Phone: +47 915 19576
 
About NorDiag:
NorDiag is a biotechnology company developing, manufacturing and marketing automated solutions (instruments and reagents) for sample preparation of DNA from difficult biological samples. DNA diagnostics give more rapid and precise answers, and are the fastest growing field within diagnostics. The Company's sample preparation solutions are today used in connection with STI, tuberculosis, MRSA, respiratory pathogens and viruses on instruments for large and small laboratories. NorDiag was founded in 2003 and has its headquarters in Oslo, Norway. The Company has offices and laboratories in Stockholm, Sweden and in Atlanta (GA), USA. The group has today 34.3 man-labour years. NorDiag is listed on the Oslo Stock Exchange with ticker NORD.
 
For further information - www.nordiag.com

Find the report and presentation here

Read the notice in Norwegian here