On November 7, 2019 Accelerate Diagnostics, Inc. (Nasdaq: AXDX) reported financial results for the third quarter ended September 30, 2019 (Press release, ACCELERATED MEDICAL DIAGNOSTICS, NOV 7, 2019, View Source [SID1234550781]).
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"Our placement and revenue results for the third quarter came in below our expectations due to an elongated sales cycle and the timing of commercial go-lives during the quarter," said Larry Mehren, president and chief executive officer of Accelerate Diagnostics, Inc. "However, we saw several encouraging signs of improvement during the quarter, including a record number of go-lives in September, an increasingly robust sales funnel and continued progress with our respiratory trial and in China. As momentum in placements and go-lives continues to improve, we remain on pace to achieve the low end of our 300-400 placement target. Looking ahead, we acknowledge the need for greater consistency and predictability in our results, and we are focused on improving our commercial execution under Jack Phillip’s leadership, as we continue our pursuit of bringing Accelerate’s life-saving technology to as many patients as possible worldwide."
Third Quarter 2019 Highlights
Added 37 net new commercially contracted instruments, compared to 29 in the third quarter of 2018.
Net sales of $2.3 million, compared to $1.4 million in the third quarter of 2018. Instrument revenue decreased year-over-year, reflecting the Company’s introduction of a reagent rental business model in September of 2018. Consumable revenue grew by over 175% as compared to the third quarter of 2018 and by approximately 15% over the prior quarter.
Gross margin was 51% for the quarter, compared to 50% in the third quarter of 2018. This small increase was the result of lower consumable production costs per unit as production volumes increase.
Selling, general, and administrative expenses for the quarter were $12.7 million, compared to $12.2 million in the third quarter of 2018. This increase was driven by higher non-cash equity-based compensation expense.
Research and development (R&D) costs for the quarter were $6.1 million, compared to $7.9 million in the third quarter of 2018. This decrease was the result of lower employee non-cash equity-based compensation expense.
Net loss was $20.4 million in the third quarter, or $0.37 per share, which included $3.1 million in non-cash stock-based compensation expense.
Net cash used in the quarter was $15.9 million, and the company ended the quarter with total cash, investments, and cash equivalents of $122.0 million.
Year-to-Date 2019 Highlights
Added 167 net new commercially contracted instruments year to date, compared to 69 for the same period from 2018.
Net sales of $5.8 million, compared to $3.8 million for the same period from 2018. Consumable revenue grew by over 150% through the first three quarters of 2019, compared to the same period in the prior year.
Gross margin was 50%, compared to 51% for the same period from 2018. This small decrease was the result of inventory timing items that did not repeat in the current year. After normalizing for the effect of these pre-FDA instrument inventory previously written off to R&D, gross margin improved by 500 basis points year-to-date due to higher consumable production levels.
Selling, general, and administrative expenses were $38.3 million year to date, compared to $41.8 million for the same period from 2018. This decrease was driven by lower stock-based compensation expense in the current year.
Research and development (R&D) costs were $19.1 million year to date, compared to $20.7 million for the same period from 2018. This decrease was the result of lower employee non-cash equity-based compensation expense.
Net loss was $63.0 million year to date, or $1.16 per share, which included $9.4 million in non-cash stock-based compensation expense.
Net cash used year to date was $44.5 million, and the company ended the quarter with total cash, investments, and cash equivalents of $122.0 million.
Full financial results for the quarter ending September 30, 2019 will be filed on Form 10-Q through the Securities and Exchange Commission’s (SEC) website at View Source
Audio Webcast and Conference Call
The company will host a conference call at 4:30PM ET today to review its first quarter results. To participate in the conference call, dial +1.877.883.0383 and enter the conference ID: 2508360. International participants may dial +1.412.902.6506. Please dial in 10 to 15 minutes prior to the start of the conference call. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using replay code 10136055 until November 28, 2019.
This conference call will also be webcast and can be accessed from the "Investors" section of the company’s website at axdx.com/investors. A replay of the audio webcast will be available until November 28, 2019.