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"Gen-Probe posted excellent financial results in the first quarter of2008, as new records in both clinical diagnostics and blood screening enabledus to exceed $100 million in quarterly product sales for the first time," saidHenry L. Nordhoff, the Company's chairman and chief executive officer. "Wealso established new all-time highs for total revenue and net income, and madeimportant progress in our PROCLEIX(R) ULTRIO(R), human papillomavirus (HPV)and prostate cancer development programs."
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In the first quarter of 2008, product sales were $101.5 million, comparedto $87.2 million in the prior year period, an increase of 16%. Total revenuesfor the first quarter of 2008 were $122.6 million, compared to $101.1 millionin the prior year period, an increase of 21%. Net income was $31.9 million($0.58 per share) in the first quarter of 2008, compared to $21.5 million($0.40 per share) in the prior year period, an increase of 48% (45% pershare). In this press release, all per share amounts are calculated on afully diluted basis, and all results are presented on a US GAAP basis.
As expected, Gen-Probe's total revenues and net income in the firstquarter of 2008 benefited from $16.4 million of royalty and license revenuereceived from Bayer, representing the third and final payment due inconnection with the 2006 settlement of the companies' patent infringementlitigation.
Detailed Results
Gen-Probe's clinical diagnostics sales in the first quarter of 2008benefited from continued growth of the APTIMA Combo 2(R) assay, an amplifiednucleic acid test (NAT) for simultaneously detecting Chlamydia trachomatis(CT) and Neisseria gonorrhoeae (GC). Sales of this assay increased based onmarket share gains on both the Company's semi-automated instrument platformand on the high-throughput, fully automated TIGRIS(R) system. Revenue fromthe PACE(R) product line, the Company's non-amplified tests for the samemicroorganisms, declined in the first quarter compared to the prior yearperiod, in line with Gen-Probe's expectations.
In blood screening, product sales in the first quarter of 2008 benefitedfrom continued international expansion of the PROCLEIX ULTRIO assay, fromhigher pricing associated with U.S. commercial sales of the PROCLEIX WNV (WestNile virus) assay on the TIGRIS system, from the timing of product shipments,and from increased sales of TIGRIS instruments to Chiron. The Company's bloodscreening products are marketed worldwide by Chiron, a business unit ofNovartis Vaccines and Diagnostics.
Collaborative research revenues for the first quarter of 2008 were$2.5 million, compared to $2.4 million in the prior year period, an increaseof 4% that resulted primarily from two factors: increased reimbursement fromNovartis of shared development expenses in the companies' blood screeningcollaboration; and increased reimbursement from 3M related to the companies'collaboration to develop rapid tests for healthcare-associated infections.These increases were partially offset by a reduction in funds received fromthe U.S. Department of Defense for prostate cancer research.
Royalty and license revenues for the first quarter of 2008 were$18.6 million, compared to $11.5 million in the prior year period. Aspreviously discussed, this increase resulted primarily from $16.4 million ofrevenue from Bayer, which represents the third and final payment due inconnection with the 2006 settlement of the companies' patent infringementlitigation. In the prior year period, royalty and license revenues included$10.3 million from Bayer.
Gross margin on product sales in the first quarter of 2008 was 67.8%,compared to 66.5% in the prior year
