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Sale of NorDiag's new instrument, Arrow, more than doubled from Q1 to Q2-2010. With 4 instruments sold in 1H-2010 to customers in 17 countries, the instrument has already received international attention. Additionally, a new OEM-agreement was signed with Korean company Seegene. "The international interest confirms that we have a unique concept for the  Arrow instrument," comments CEO of NorDiag, Mårten Wigstøl.

Infectious Diseases increased sales 52 % year-on-year
NorDiag had operating revenues of NOK 49.1 million in the first half of 2010, compared with NOK 8.0 million in 1H-2009. Corresponding figures in Q2-2010 were NOK 22.9 million, and in Q2-2009; NOK 3.8 million. The increase is mainly due to the new segment HLA Typing, included from July 1, 2009. Infectious Diseases segment reached NOK 12.2 million in operating revenues in 1H-2010, compared to NOK 8.0 million in 1H-2009. This is an increase of 52%.

Upgraded Bullet experience new traction
Even if there is a substantial increase in sales year-on-year, the sale in Q2-2010 is lower than previous quarters. The main reason is that no Bullet instruments were sold in Q2. "As announced in the Q1-presentation, we decided to upgrade Bullet to make it more suited for an international market. Consequently, customers wanted to wait for the upgraded version," Wigstøl explains, and continues:"As the redesign process is concluded, we experience an increased interest for the instrument. So far in Q3, four instruments are sold, and there is additional interest outside Nordic countries."

Margin and profit
Gross margin related to operating revenues was 29% in the first half of 2010 compared to 52% in the same period last year. Gross margin in Q2-2010 was 29% down from 58% in Q2-2009. This is primarily attributable to the higher share of operating revenues originating from the HLA Typing segment in 2010 compared with 2009. The HLA Typing segment had a gross profit of 25% in 1H-2010 and 26% in Q2-2010, and the low margins reflect the fact that this is a distribution \ business. Also the Infectious Diseases segment had lower margins than previous quarters, but this will change as full scale production of instruments is achieved, according to the Company's CEO: "Production costs, distribution and product mix will change during the next quarters and give higher margins."

Company target is to reach a break even quarter during 2011. EBITDA in 1H-2010 was NOK - 15.4 million compared to NOK -19.9 million in 1H-2009, and NOK  - 7.8 million in Q2-2010 and NOK - 9.5 million in Q2-2009 respectively. Net income after tax was NOK - 14.7 million in 1H-2010, compared to NOK - 48.7 million in 1H-2009.

Outlook: In line with expectations
NorDiag is well underway to reach targets communicated at the start of 2010. Sales targets for instruments in 2010, 13 Bullets and 162 Arrows, are expected to be reached. OEM-agreements and feedback from distributors confirms the uniqueness of the Arrow technology, and the production of the instrument and reagent kits is gradually coming up to speed. The upgraded Bullet instrument makes it more likely to achieve success outside Scandinavia.
The Company expects the growth for Arrow to continue; while there will be increased effort internationally on Bullet. The effect of the new distribution partnership in US is also expected to start to pay off. At the same time NorDiag will look for new OEM opportunities.
CEO Mårten Wigstøl. Phone. +47 911 65775
CFO Tone Kvåle , Phone: +47 915 19576

1H Q2 2010 Presentation
1H and Q2 2010 Report

Read the notice in Norwegian here.