On November 9, 2020 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported financial results for the third quarter of 2020 (Press release, NanoString Technologies, NOV 9, 2020, View Source [SID1234570540]).
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Third Quarter Financial Highlights
Product and service revenue of $30.1 million, 14% year-over-year growth. On a pro forma basis, reflecting the impact of the Veracyte transaction on revenue recorded for Prosigna IVD kits, product and service revenue increased by 22%
Instrument revenue of $12.9 million, 60% year-over-year growth. Instrument revenue includes $7.5 million of GeoMx Digital Spatial Profiler (DSP) instrument revenue
Consumables revenue of $13.7 million, 11% year-over-year decline. On a pro forma basis, reflecting the impact of the Veracyte transaction, consumables revenue was flat year-over-year. Consumables revenue includes $1.4 million of GeoMx DSP consumables revenue
Service revenue of $3.6 million, 16% year-over-year growth
"We delivered over 20% pro forma revenue growth in Q3, and extended our spatial genomics leadership with the launch of NGS readout for GeoMx," said Brad Gray, President and CEO of NanoString. "With our recent successful financing, we have the strongest balance sheet in our company’s history, positioning us to fully support our market and technology development initiatives."
GeoMx DSP Platform
GeoMx Orders: Received orders for more than 25 GeoMx DSP instruments in the third quarter, bringing cumulative orders received to more than 150 instruments since launch
GeoMx Shipments and Installs: Shipped more than 30 and installed approximately 35 GeoMx DSP instruments in the third quarter, bringing cumulative shipments to more than 120 and cumulative installs to approximately 100 instruments since launch
Launch of Next Generation Sequencing (NGS) Readout and Cancer Transcriptome Atlas (CTA): Announced the launch of GeoMx DSP compatibility with Illumina’s next generation sequencers, as well as the commercial availability of the CTA, the first in a portfolio of GeoMx DSP products that will utilize NGS readout
GeoMx Protein Readout for NGS: Launched new NGS panels that include more than 50 proteins for immuno-oncology applications. These protein assays can be used in combination with the Cancer Transcriptome Atlas to enable multi-analyte spatial readout using NGS
Launch of Whole Transcriptome Atlas under GeoMx Technology Access Program (TAP): Announced the availability of the new GeoMx Whole Transcriptome Atlas through TAP for the GeoMx DSP, which provides expanded access to next generation sequencing readout on GeoMx DSP
Continued Expansion of GeoMx TAP: Generated more than 75 new TAP orders, of which more than 50% included NGS readout
Publications: Continued growth of peer-reviewed publications utilizing GeoMx DSP technology, with 6 new publications in the third quarter, bringing the cumulative total to 29 peer-reviewed publications
nCounter Platform
nCounter Installed Base: Grew installed base to approximately 915 nCounter Analysis Systems at September 30, 2020, as compared to approximately 820 systems at September 30, 2019
nCounter Publications: Surpassed 3,800 cumulative peer-reviewed publications utilizing nCounter technology
New Panel Launch: Launched new nCounter Host Response Panel that allows scientists to study the immune response to SARS CoV2, or any other pathogen. The Host Response Panel can be combined with the COVID-19 Panel Plus spike-in or custom content, enabling researchers to characterize the host and viral genes simultaneously
Financial
Balance Sheet: Completed an underwritten public offering of 5,750,000 shares of our common stock in October 2020, for net proceeds of $215.8 million. Concluded the quarter with $231.0 million in cash, cash equivalents and short-term investments. Following the equity offering completed in October 2020, our cash, cash equivalents and short-term investments balance is $446.8 million
Corporate
Investor Day: Announced a virtual Investor Day that will be held on Tuesday, December 1st focused on updates to our product roadmap, commercial initiatives and the development of the spatial biology market
Third Quarter Financial Results
We have elected to present selected non-GAAP, or adjusted, financial measures, including Adjusted EBITDA. These adjusted financial measures are calculated excluding certain items that may make it more challenging to compare our GAAP operating results across periods. Such items may include collaboration revenue, stock-based compensation, depreciation and amortization, or one-time charges such as transaction related fees and expenses or restructuring charges and severance costs. A reconciliation of adjusted financial measures to the nearest comparable GAAP financial measure can be found in the notes and table at the end of this press release.Supplemental Information
As a supplement to the table above, we have posted to the investor relations section of our website, at www.nanostring.com, supplemental financial data that includes our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the third quarter of 2020 and for each quarter of and the full year of 2019.
Conference Call
Management will host a conference call today beginning at 1:30 pm PT / 4:30 pm ET to discuss these results and answer questions. Investors and other interested parties can register for the call in advance by visiting View Source After registering, an email confirmation will be sent, including dial-in details and unique conference call codes for entry. Registration is open throughout the call but to ensure connection for the full call, registration in advance is recommended. The link to the webcast and audio replay will be made available at the Investor Relations website: nanostring.com. A replay of the call will be available beginning November 9, 2020 at 7:30pm ET through midnight ET on November 16, 2020. To access the replay, dial (800) 585-8367 or (416) 621-4642 and reference Conference ID: 5172128. The webcast will also be available on our website for one year following the completion of the call.
Non-GAAP, or Adjusted, Financial Information
We believe that the presentation of non-GAAP, or adjusted, financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. Reconciliation of adjusted financial measures to the most directly comparable financial result as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of adjusted guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding certain expenses that may be incurred in the future. For further information regarding why we believe that these adjusted measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to "Notes Regarding Non-GAAP Financial Information" at the end of this press release.
Pro Forma Financial Information
As used in this press release, "pro forma" percentages are calculated by comparing the applicable period-over-period financial results to reflect the impact of the Veracyte transaction as if such transaction had occurred on January 1, 2019, the beginning of the earliest period presented. Further disclosure regarding the terms and pro forma impact of the Veracyte transaction can be obtained in our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 4, 2019.