On February 29, 2016 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the fourth quarter and year ended December 31, 2015 (Press release, NanoString Technologies, FEB 29, 2016, View Source [SID:1234509284]).

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Fourth Quarter Financial Highlights

Total revenue of $22.3 million, 43% year-over-year growth
Total product and service revenue of $19.4 million, 36% year-over-year growth
Instrument revenue of $7.9 million, 25% year-over-year growth
Consumables revenue of $10.7 million, including $0.8 million of Prosigna IVD kits, 46% year-over-year growth

Full Year 2015 Financial Highlights

Total revenue of $62.7 million, 32% year-over-year growth
Total product and service revenue of $56.6 million, 27% year-over-year growth
Instrument revenue of $21.0 million, 16% year-over-year growth
Consumables revenue of $33.1 million, including $2.5 million of Prosigna IVD kits, 35% year-over-year growth

"We had a successful year in 2015 achieving virtually all of our strategic objectives, and closing the year with an expanded product line-up, substantially larger addressable markets, increased momentum in diagnostic commercialization, and multiple biopharma collaborations. Simultaneously, our business model delivered another year of strong and consistent revenue growth," said President and Chief Executive Officer, Brad Gray. "In addition, our leadership position in precision oncology has been strengthened by two recent biopharma collaborations that validate our platform and are expected to provide substantial near-term cash flow."

Recent Business Highlights

Grew installed base to over 350 nCounter Analysis Systems at December 31, 2015, with approximately 100 systems sold during the year
Sold 14 nCounter SPRINT Profiler systems in the fourth quarter, bringing total systems sold by year end to 20
Surpassed 1,000 cumulative peer-reviewed publications of studies based on nCounter technology
Expanded collaboration with Merck to develop and commercialize a novel diagnostic test to predict response to KEYTRUDA in multiple tumor types
Entered into collaboration with Medivation and Astellas Pharma to adapt Prosigna for development as a companion diagnostic for XTANDI (enzalutamide) in triple negative breast cancer
Presented the first proof-of-concept data for Hyb & Seq, a highly accurate DNA sequencing chemistry based on the company’s optical barcoding technology, which requires no enzymes, amplification or library prep

Fourth Quarter Financial Results
Revenue for the three months ended December 31, 2015 rose 43% to $22.3 million, from $15.6 million for the fourth quarter of 2014. Instrument revenue was $7.9 million, up 25% over the prior year period, driven by sales of the nCounter SPRINT Profiler. Consumables revenue, excluding Prosigna, was $9.9 million for the fourth quarter of 2015, 38% higher than in the comparable 2014 quarter. Prosigna IVD kit revenue was $0.8 million for the quarter, and collaboration revenue totaled $2.9 million. Gross margin on product and service revenue was 56% for the fourth quarter of 2015, up from 53% for the fourth quarter of 2014.

Research and development expense rose 30% to $7.1 million for the fourth quarter of 2015 versus $5.4 million for the fourth quarter of 2014, reflecting increased investment in products under development for the life science research market, as well as higher costs related to diagnostic development. Selling, general and administrative expense was $14.2 million for the fourth quarter of 2015 compared to $15.0 million for the prior year period, reflecting efficiencies gained through streamlining the sales and marketing organization in the first quarter of 2015.

Net loss for the three months ended December 31, 2015 declined to $8.8 million, or a loss of $0.44 per diluted share, compared with $12.4 million, or a loss of $0.68 per diluted share, for the fourth quarter of 2014.

Full Year 2015 Financial Results

Revenue for 2015 rose 32% to $62.7 million, from $47.6 million for 2014. Instrument revenue was $21.0 million, up 16% from the prior year. Consumables revenue was $30.6 million for 2015, 28% higher than for the prior year. Prosigna IVD kit revenue for 2015 was $2.5 million, and revenue associated with companion diagnostic collaborations was $6.0 million for the year. Gross margin on product and service revenue improved to 54% for 2015.

Research and development expense was $24.6 million for 2015, versus $21.4 million for 2014. Selling, general and administrative expense was $53.2 million for 2015 compared to $51.1 million for the prior year.

Net loss for 2015 was $45.6 million, or a loss of $2.40 per diluted share, compared with $50.0 million, or a loss of $2.80 per diluted share, for 2014.

The company ended 2015 with approximately $49 million of cash, cash equivalents, and short-term investments, before the receipt of any cash from the Medivation/Astellas or Merck transactions.

Outlook for 2016

Total revenue in the range of $86 million to $90 million
Gross margin on product and service revenues in the range of 54% to 55%
Operating expenses in the range of $94 million to $99 million
Operating loss in the range of $40 million to $43 million
Net loss per share in the range of $2.30 to $2.45
Cash from collaborations in 2016 in the range of $40 million to $45 million