Paradigm Genetics (Nasdaq: PDGM) cut its net loss almost in half as it posted higher revenue in 2003 due to several contracts the company secured and a federal grant.

The RTP-based biotech firm had a net loss of $12.2 million in 2003, down from $23.5 million in 2002.

Paradigm saw revenues increased 23 percent to $21.1 million in 2003, up from $17.3 million in 2002. Expenses for 2003 decreased 12 percent to $32.8 million, compared to $37.3 million as the company reduced its cash burn by 77 percent.

For the fourth-quarter, the net loss was $2.2 million, compared to a net loss of $9.3 million in 2002, which included losses from discontinued operations of $2.7 million resulting from the company’s divestiture of its ParaGen plant genotyping business.

Paradigm said total revenue for the fourth quarter 2003 increased to $5.5 million, compared to $1.9 million for the same period a year ago, attributing the gains to contracts with the National Institute of Environmental Health Sciences and Monsanto Company and an Advanced Technology Program grant. The company also has contracts with Pioneer/Dupont and Bayer CropScience.

“I view 2003 as the year in which we achieved a critical transformation of our company … financially, commercially and strategically,” said Heinrich Gugger, president and CEO of Paradigm Genetics. “We significantly improved our financial health. We reinvigorated our agricultural endeavors — by launching promising internal research projects targeting proprietary product concepts in the area of chemical genetics. And we made excellent progress in our human health program.”

Gugger also says Paradigm’s acquisition of TissueInformatics, which is expected to close during the first quarter, will further push the company toward its goal of creating an integrated systems biology offering.

“Looking into 2004, we want to build on this new momentum,” added Gugger. “–In human health, we should see significant impact of our acquisition of TissueInformatics, which brings us not only powerful technology and an emerging product and sales pipeline but also key people with the extensive medical, business development and sales experience in the pharmaceutical sector that Paradigm has been seeking. I am truly excited for our shareholders, employees, partners and customers as we build the leading systems biology company.”

Shares of PDGM are currently down more than 6 percent, or 10 cents, to $1.45 in midday trading. The stock’s 52 week range is roughly between 20 cents and $2 per share.

Paradigm: www.paradigmgenetics.com