Repligen Corporation reported its results for the fourth quarter and year ended December 31, 2014. Product sales for the year 2014 increased to a record $60.4 million, a gain of approximately 27% compared to $47.5 million for the year 2013.
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Sales growth was driven by increased demand for Protein A affinity ligands, our expanded OPUS line and strong uptake of the ATF System.
Total revenue for the year 2014 was $63.5 million, compared to total revenue of $68.2 million for the year 2013 which included $17.9 million of royalty revenue under a license agreement that expired on December 31, 2013.
Bioprocessing gross profit for the year 2014 increased 30% to $32.4 million or 53.6% of product revenue, compared to $25 million or 52.7% of product revenue for the year 2013. Margin improvements were based on increased capacity utilization and improved manufacturing yields, partially offset by expenses associated with facility expansion and consolidation of the ATF manufacturing operations.
Operating expenses for the year 2014 increased to $52.9 million compared to $45.3 million in 2013, due primarily to investment in our commercial and management teams, the Refine acquisition and related integration expenses, the expansion of our U.S. facilities to support future growth and the aforementioned contingent consideration.
Operating expenses for 2014 include $4 million of depreciation and amortization expense compared to $3.1 million for the year 2013.
Operating income in 2014 was $10.7 million compared to $22.9 million in 2013. The $12.2 million difference is due primarily to a reduction of non-product operating income, including royalty income of $15.2 million.
Net income was $8.2 million for the year 2014 compared to $16.1 million in 2013 which benefited from the previously mentioned royalty income. For the fourth quarter of 2014, product sales increased to $15.4 million, reflecting 49% growth over the same period in 2013, including a negative impact of 6% from foreign currency translation.
Total revenue for the fourth quarter increased by $1 million to $16.4 million compared to the same period in 2013, which included $5 million of royalty revenue from a license agreement that expired on December 31, 2013. Operating expenses for the fourth quarter of 2014 were $16.3 million, an increase of $6.1 million compared to the fourth quarter of 2013.
The increase in operating expense was primarily due to increased cost of product revenue associated with higher product sales, an increase of $1.6 million in SG&A expense to support the ongoing ATF business and the expansion of our commercial and management teams, and the aforementioned $2 million of contingent consideration.
Operating income for the fourth quarter of 2014 was $61,000 which includes a $1 million milestone received from Pfizer, and income before taxes was $243,000. Income tax for the fourth quarter was $641,000, resulting in a net loss of $399,000. ■