Gross revenue for the nine months ended December 31, 2009 was $11.4 million, or 48%, an increase from $7.7 million for the nine months ended December 31, 2008. This increase was mainly driven by the growth in genetic tests sales of $3.7 million, up 51% when compared to the same period a year ago. Revenue has risen as a result of continued expansion of sales and marketing activities in fiscal 2009, the introduction of new and expanded tests and increased coverage policies from third-party payors. To date, third-party payor coverage for FAMILION tests is approximately 280 million lives in the U.S. As of December 31, 2009, PGxHealth was an approved Medicare provider and a Medicaid provider in most states. These increases in revenue were partially offset by an increase in contractual allowances of $1.1 million from $489,000, or 7% of gross genetic testing revenue, to $1.6 million, or 14% of gross genetic testing revenue. The increase in contractual allowances was due to an increase in coverage from third-party payors, as well as the mix of revenue from third-party payors.

Gross margins increased from 33% for the nine months ended December 31, 2008 to 52% for the nine months ended December 31, 2009. The improvement in gross margins from fiscal 2009 to 2010 was due to an increase in revenues, as well as the realization of benefits from infrastructure improvements and lab efficiencies implemented by the Company in fiscal 2009. Gross margins are expected to continue to improve as revenues increase, while costs, including personnel, equipment and facilities expense, remain essentially flat.

Research and development expenses were $30.1 million for the nine months ended December 31, 2009, down from $31.3 million when compared to the same a year ago. The decrease is primarily attributable to the completion of the safety and Phase III confirmatory trials for vilazodone. These reductions were partially offset by costs incurred with advancing Stedivaze into the clinic, progressing preclinical programs and the preparation of the NDA submission for vilazodone, which is expected to be made in the first quarter of calendar year 2010. Ongoing research and development expenses are expected to increase as the Company expands Phase III clinical trials for Stedivaze and prepares for the commercialization of vilazodone.

Sales and marketing expenses were $6.0 million for the nine months ended December 31, 2009, up from $5.7 million for the same period a year ago. The increase was mainly due to expenses relating to expanded sales and marketing activities during the past year. Sales and marketing expenses are expected to remain flat over the next several quarters as the Company leverages its established sales organization.

General and administrative expenses remained essentially flat at $14.9 million for the nine months ended December 31, 2009, compared to $14.7 million for the same period a year ago.

Cash and cash equivalents at December 31, 2009, were $70.2 million. This included net proceeds of $44.2 million raised from a public offering of 2,750,000 shares of common stock at a price of $17.25 per share completed in November 2009.

SOURCE Clinical Data, Inc.