Abaxis reports second-quarter financial results.

SUNNYVALE, Calif.--(HealthWire)--Nov. 10, 1994--Abaxis Inc. (NASDAQ:ABAX), a medical products company, Thursday reported operating results for its second fiscal quarter and six-month period ended Sept. 30, 1994.

For the three-month period, the company reported a net loss of $2,772,000, or 44 cents per share, compared with a net loss of $1,508,000, or 24 cents per share, for the same period last year. Revenues for the quarter were $256,000, compared with revenues of $1,060,000 for the same period last year.

For the first six months of the fiscal year, the company reported a net loss of $5,576,000, or 89 cents per share, compared with a net loss of $3,804,000, or 61 cents per share, for the same period last year. Six-month revenues were $277,000, compared with revenues of $1,112,000 for the same period last year.

Abaxis initiated sales of its whole blood analyzer system in the United States to veterinarians during the quarter under the name VetScan. Revenues from sales of systems are only recognized as systems are shipped from the distributor to the veterinarian.

Because the company began recognizing revenue from the sale of its products to veterinarians in the second quarter of fiscal 1995, all costs associated with manufacturing and production activities during the second quarter of fiscal 1995 are included in cost of sales.

Cost of sales includes the cost of all manufacturing activities for the system and the costs of ongoing testing of the blood analyzer for its introduction into the human market. Cost of sales also includes the costs associated with capacity that will remain significantly underutilized until after the launch of the Piccolo System in the human medical market.

Under development for the human medical market, ABAXIS' Piccolo Portable Blood Analysis System provides fast, accurate, easy and economical in-office blood testing. The Piccolo System and a five-chemistry reagent rotor have already been cleared by the FDA.

The company is awaiting clearance from the FDA of a nine-chemistry Preliminary Health Panel reagent rotor and has initiated clinical studies for a 12-test Primary Health Care rotor at the Scripps Clinic Medical Group, La Jolla, Calif.

Upon clearance of this 12-test rotor, the company will be able to provide the medical profession with the simplest method of performing routine clinical chemistry in less than 15 minutes. It should enable diagnoses to be made in one visit, where often a second visit might be required. The company does not intend to launch the Piccolo System prior to the FDA's clearance of the 12-test rotor.

"The combination of a lean structure focused on preparing for the marketing of the Piccolo System and the new funding will enable us to move forward to ensuring that, once the FDA provides its clearance, a successful introduction of the Piccolo System is made possible," said Gary H. Stroy, president and chief executive officer of ABAXIS. "We believe that we have taken the necessary steps to ensure that the company is able to attain that goal."

Subsequent to the end of the quarter, the company raised an additional $9.4 million by issuing 2.35 million shares of common stock. During the quarter and in early October, the company redeployed its personnel to focus on sales, marketing and manufacturing, reducing the headcount significantly upon completion of the development of the system.

During the quarter, Charles C. Catterino joined the company as director of sales and marketing. Catterino was previously with Cholestech Inc. and Lifescan Inc., and his experience in selling diagnostic systems designed to provide convenience to patients and health-care professionals will contribute to the development of plans for the marketing of the Piccolo System.

Abaxis, founded in 1989, is developing portable blood analyzers and associated chemistries for both the human and veterinary medical markets. The blood analysis system consists of a 15-pound blood analyzer and a series of three-inch-diameter single-use plastic disks, called reagent rotors, that contain the reagents necessary to perform a menu of tests.

The analyzers can perform up to 12 tests simultaneously on only a few drops of whole blood. Automated calibration and quality control features are integrated into the systems to ensure accurate and precise results. -0-

                              ABAXIS INC.
                     (A Development Stage Company)
                     Summary Financial Information
                 (In thousands, except per-share data)

                                Three Months Ended   Six Months Ended
                                    Sept. 30,            Sept. 30,
                                 1994      1993       1994      1993
                                  (Unaudited)          (Unaudited)

Statements of Operations Data:

Revenues                      $   256   $ 1,060    $   277   $ 1,112

Operating expenses:
 Cost of sales                  1,072        --      1,072     1,250
 Research and development         828     2,109      2,816     4,197
 General and administrative     1,056       628      1,930     1,078
   Total operating expenses     2,956     2,118      5,818     5,275

Loss from operations           (2,700)   (2,737)    (5,541)   (4,163)

Interest income                    42       241        169       490
Interest expense                 (114)      (72)      (204)     (131)
Net loss                      $(2,772)  $(1,508)   $(5,576)  $(3,804)
Net loss per share            $  (.44)  $  (.24)   $  (.89)  $  (.61)

Shares used in calculating
 net loss per share             6,319     6,217      6,299     6,210

-0-

                          Balance Sheet Data
                           (In thousands)

                                Sept. 30, 1994   March 31, 1994
                                 (Unaudited)       (Audited)

Cash, cash equivalents and
 short-term cash investments       $  2,449       $  5,571
Working capital                    $    390       $  3,971
Long-term cash investments         $  1,622       $  4,500
Total assets                       $  7,995       $ 13,569
Total stockholders' equity         $  4,562       $ 10,003

CONTACT: Abaxis Inc., Sunnyvale

              Gary H. Stroy, 408/745-6854
                  or
              Pondel Parsons & Wilkinson, Los Angeles
              Rob Whetstone/Lynne Farris, 310/207-9300