Gen-Probe Reports Financial Results for Second Qu...(n compared to $7.1 million in the prior ...),Health

Royalty and license revenues for the second quarter of 2009 were $1.5 million, compared to $1.5 million in the prior year period. For the first six months of 2009, royalty and license revenues were $3.5 million, compared to $20.1 million in the prior year period. As previously discussed, this significant decrease resulted primarily from $16.4 million of royalty and license revenue that was recorded in the first quarter of 2008 associated with the settlement of Gen-Probe's patent infringement litigation against Bayer. This revenue represented the third and final payment due in connection with the 2006 settlement of the companies' litigation.

Gross margin on product sales in the second quarter of 2009 was 67.3% on a non-GAAP basis that excludes $0.1 million of acquisition-related depreciation expense, compared to 71.4% in the prior year period. This decrease resulted primarily from the stronger U.S. dollar, the addition of Tepnel's generally lower-margin revenues, and the previously discussed $2.6 million payment in the prior year period related to historical revenue adjustments in the Novartis collaboration. For the first six months of 2009, gross margin on product sales was 68.8% on a non-GAAP basis that excludes $0.1 million of acquisition-related depreciation expense, compared to 69.7% in the prior year period. On a GAAP basis, gross margin on product sales was 67.2% in the second quarter of 2009, and 68.8% for the first six months of the year.

Acquisition-related intangible amortization expenses in each of the second quarter and first six months of 2009 were $1.1 million, compared to $0 in the comparable prior year periods.

Research and development (R&D) expenses in the second quarter of 2009 were $26.1 million, compared to $29.4 million in the prior year period, a decrease of 11%. This decrease resulted
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