diaDexus, Inc. (OTCMKTS:DDXS)’s Quarterly Report Scares Investors Away

After the end of the trading day on November 5 diaDexus, Inc. (OTCMKTS:DDXS) announced their financial results for the third quarter of the year. The numbers were far from encouraging and when the market opened yesterday investors were eager to shed their holdings. Nearly 1.2 million shares got sold during the session and as a result the stock plunged for the bottom of the chart.

When the closing bell rang DDXS had wiped 23% of their price and were sitting at $0.39. During the session the company also registered its new 52-week low of $0.383. Compared to the prices from the start of the year when the stock stayed consistently above a dollar it has now lost over 60% of its value.

So let’s take a look at the report that caused the sell-off. At the end of September DDXS had:

• $15.8 million
• $21.6 million total current assets
• $4.9 million total current liabilities
• $7.3 million total revenues
• $1.6 million net loss

Compared to the previous quarter sales of the company’s PLAC test fell down by more than a million. Still, they were able to offset the lower sales thanks to the laboratory service agreement signed with GlaxoSmithKline. It helped DDXS generate $2.2 million in service revenues and as a whole revenues for the quarter were 15% hired than the same period last year.

The problem is that the net loss grew even faster. A $354 thousand net loss reported at the end of September, 2013 has now turned into more than $1.6 million. For the nine-month period the numbers are equally as grim – $6.6 million net loss versus $1.9 million.

Back in August DDXS entered into a $15 million loan agreement and it helped them repay $8.1 million in previous loans. For now they have adequate cash reserves that should be able to keep them going for quite a while.

In order to regain investors’ trust though DDXS will have to address the lower product sales. In June the company made another 510(k) submission of their PLAC Test for Lp-PLA2 Activity with the hopes of a more favorable outcome this time. They also plan to start development of the first marker from their heart failure program by the end of the year.

Will this be enough to stop them from dropping to even lower price ranges though? Well, it is up to you to decide. Just be sure to take all the risks into account before you commit to any trades. 

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