On October 10, 2023 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported preliminary financial and operational highlights for the third quarter ended September 30, 2023, as well as a reorganization designed to accelerate the Company’s path to profitability (Press release, NanoString Technologies, OCT 10, 2023, View Source [SID1234635813]).
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"Our teams delivered strong revenue results for the third quarter, with preliminary results exceeding consensus estimates and the high end of our guidance range," said Brad Gray, President and CEO of NanoString. "In addition, we began important steps to deliver on our commitment to improve our financial profile."
"As part of our Company’s evolution and with a focus toward achieving profitability, we have decided to reorganize our research and development and manufacturing operations. As part of this reorganization, we expect to reduce expenses by more than $15 million on an annualized basis," continued Mr. Gray. "While we are confident these changes focus our investments on the activities that are best for NanoString’s future success, we will have to part ways with many wonderful colleagues. I would like to thank our team for their commitment, innovation and hard work."
"With strong revenue growth and improved working capital, we were able to reduce our cash burn by about 50% over the prior quarter," said Thomas Bailey, Chief Financial Officer of NanoString. "We expect our reorganization will further reduce our expenses and net operating loss in the fourth quarter and 2024."
Preliminary Third Quarter Financial Results
•Revenue is expected to be over $48 million, representing year on year growth of more than 60%, above the upper end of our guidance range of $45 to $47 million and above the consensus revenue estimate of approximately $46 million
•Spatial biology revenue is expected to be approximately $29 million, above the upper end of our guidance range of $27 to $28 million and above the consensus revenue estimate of approximately $27 million
•nCounter revenue, inclusive of all service and other revenue, is expected to be approximately $19 million, at the upper end of our guidance range of $18 to $19 million and in line with the consensus revenue estimate of approximately $19 million
Third Quarter Highlights
Spatial Biology
•Accelerated CosMx shipments during Q3, resulting in Q3 spatial biology instrument revenue growth of approximately 348% year-over-year
•Successfully defended sizeable CosMx SMI instrument order book, fulfilling or retaining approximately 95% of cumulative orders as of September 30, 2023
Operating Expenses and Cash
•Commenced implementing a reorganization of the Company’s research and development and manufacturing departments and activities, which is expected to eliminate approximately 110 positions from the Company and reduce expenses by over $15 million on an annualized basis. A charge of approximately $5 million is expected to be incurred in the fourth quarter of 2023 primarily as a result of severance and support being provided to transitioning employees
•Reduced use of cash to approximately $20 million during the third quarter, as compared to about $37 million in the second quarter, with further improvement expected in the fourth quarter and in 2024
These preliminary results are based on management’s initial analysis of operations for the quarter ended September 30, 2023 and are subject to further internal review.
Third Quarter Conference Call
The Company plans to release full operating results for the third quarter of 2023 after the close of trading on Monday, November 6, 2023. Company management will host a conference call beginning at 4:30pm ET to discuss those results and provide updated financial guidance.
Investors and other interested parties should register for the conference call in advance by visiting View Source Following registration, an email confirmation will be sent that includes 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 6, 2023, at 7:30pm ET through midnight on November 13, 2023. To access the replay, dial (800) 770-2030 or (647) 362-9199 and reference Conference ID: 72369. The webcast will also be available on the Company’s website for one year following the completion of the call.