On November 2, 2016 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the third quarter ended September 30, 2016 (Press release, NanoString Technologies, NOV 2, 2016, View Source [SID1234516304]).

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Third Quarter Financial Highlights

Total revenue of $23.9 million, 53% year-over-year growth
Total product and service revenue of $19.2 million, 38% year-over-year growth
Consumables revenue of $11.5 million, including $1.1 million of Prosigna IVD kits, 27% year-over-year growth
Instrument revenue of $6.9 million, 62% year-over-year growth
Collaboration revenue of $4.8 million
"We continued to execute well during the third quarter, generating strong growth across our business while advancing our product pipeline and partnerships," said president and chief executive officer Brad Gray. "A highlight of the quarter was the robust demand for our nCounter SPRINT Profiler, which helped drive 62% year-on-year growth in instrument revenue and validated that SPRINT’s ability to reach new customers is accelerating instrument placement."

Recent Business Highlights

Grew installed base to approximately 450 nCounter Analysis Systems at September 30, 2016
Launched new nCounter Vantage 3D Solid Tumor Panels for proteins and single nucleotide variations to enable simultaneous analysis of DNA mutations, messenger RNA, fusion genes, and proteins on a single platform
Presented data demonstrating the potential workflow advantages of Hyb & Seq sequencing chemistry, requiring less than 60 minutes of sample processing to enable initiation of a sequencing run
Appointed Kirk Malloy, Ph.D., seasoned life sciences executive, to the company’s board of directors
Third Quarter Financial Results

Revenue for the three months ended September 30, 2016 increased by 53% to $23.9 million, as compared to $15.7 million for the third quarter of 2015. Instrument revenue was $6.9 million, up 62% versus the prior year period, with nCounter SPRINT systems representing approximately half of systems sold. Consumables revenue, excluding Prosigna, was $10.3 million for the third quarter of 2016, 23% higher than in the comparable 2015 quarter. Prosigna IVD kit revenue was $1.1 million for the quarter, an increase of 73% over the third quarter of 2015. Collaboration revenue totaled $4.8 million, compared to $1.8 million for the third quarter of 2015. Gross margin on product and service revenue was 58% for the third quarter of 2016, up from 55% for the prior year period.

Research and development expense increased by 50% to $8.7 million for the third quarter of 2016 versus $5.8 million for the third quarter of 2015, reflecting increased costs associated with biopharma collaborations announced earlier this year and new products and technologies under development for the life science research market. Selling, general and administrative expense increased by 30% to $15.6 million for the third quarter of 2016 compared to $12.0 million for the prior year period.

Net loss for the three months ended September 30, 2016 increased to $10.1 million, or a loss of $0.51 per share, compared with $9.5 million, or a loss of $0.49 per share, for the third quarter of 2015.

Outlook for 2016

The company’s financial outlook for 2016 is unchanged, and includes:

Total revenue in the range of $89 million to $93 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 $37 million to $40 million
Net loss per share in the range of $2.15 to $2.30
Cash from collaborations in 2016 in the range of $40 million to $45 million