On November 7, 2022 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported financial results for the third quarter ended September 30, 2022 (Press release, NanoString Technologies, NOV 7, 2022, View Source [SID1234623256]).

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"We currently have orders for more than 100 CosMx systems which we expect to begin generating revenue as we ship our first CosMx systems in the coming weeks."

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Third Quarter Financial Highlights

Product and service revenue of $29.5 million
GeoMx Digital Spatial Profiler (DSP) revenue of $9.3 million. GeoMx DSP revenue includes:
Instrument revenue of $4.7 million
Consumables revenue of $4.6 million, annualized pull-through of approximately $58,000 per installed system
nCounter revenue, inclusive of all service revenue, of $20.2 million. nCounter revenue includes:
Instrument revenue of $3.3 million
Consumables revenue of $12.0 million, annualized pull-through of approximately $44,000 per installed system
Service revenue of $4.9 million
Cash, cash equivalents and short-term investments balance of $230.5 million
"During the third quarter we delivered on our top priority, which is growing our spatial biology customer base. We generated orders for approximately 60 spatial instruments, representing growth of about 70% over the prior year," said Brad Gray, president & CEO of NanoString. "We currently have orders for more than 100 CosMx systems which we expect to begin generating revenue as we ship our first CosMx systems in the coming weeks."

"The third quarter and year-to-date 2022 have presented challenges as our business mix has continued to evolve, and we have taken steps to streamline our cost structure while maintaining our investments in spatial biology. With our strong balance sheet and 2023 revenue backlog, we expect improved profitability in the future and to reach cash break-even with our current financial resources," stated NanoString’s CFO Tom Bailey.

Operational Highlights

Spatial Biology

Spatial Biology System Orders: Secured customer orders for approximately 60 spatial biology systems, including approximately 20 GeoMx DSP systems and approximately 40 CosMx Spatial Molecular Imager (SMI) systems, bringing total CosMx orders to date to more than 100 systems
CosMx Publication in Nature Biotechnology: Published a paper describing the technical details and performance of the CosMx SMI, including the spatial imaging of 1,000 RNAs and 100 proteins in mapped at single-cell and subcellular resolution generated from non-small cell and breast cancer tissue
GeoMx Studies Featured on Covers of Two Major Scientific Journals: Peer-reviewed papers using the GeoMx Human Whole Transcriptome Atlas (WTA) and the GeoMx Cancer Transcriptome Atlas, respectively, featured on the covers of the August issue of Nature Genetics and the September 18 issue of Clinical Cancer Research
Visiopharm Collaboration: Announced a collaboration with Visiopharm for co-development of integrated workflows for GeoMx and the AtoMx Spatial Informatics Platform that leverage AI-driven image analysis capabilities of Visiopharm
GeoMx Installed Base: Grew installed base to approximately 330 GeoMx DSP systems as of September 30, 2022, representing 47% growth over the prior year
GeoMx Publications: Continued growth of peer-reviewed publications utilizing GeoMx DSP technology, with approximately 30 new publications in the third quarter, bringing the cumulative total to approximately 160 peer-reviewed publications as of September 30, 2022
nCounter

nCounter Installed Base: Grew installed base to approximately 1,105 nCounter Analysis Systems as of September 30, 2022, representing 7% growth over the prior year
Publications: Surpassed 6,100 cumulative peer-reviewed publications utilizing nCounter technology as of September 30, 2022
Corporate

Portfolio Prioritization and Streamlined Cost Structure: Adjusting cost and organization structure to support objective of reaching cash flow breakeven utilizing existing balance sheet resources by maintaining key investments in spatial biology while realigning manufacturing capacity and reducing certain non-critical commercial and R&D initiatives
2022 Outlook

The company updated its 2022 outlook, with results expected as follows:

Orders for over 200 spatial biology systems, consistent with previous guidance
Cumulative orders for approximately 140 CosMx systems expected by the end of 2022, representing a total revenue value of more than $30 million
Total product and service revenue of $125 to $127 million, as compared to previous guidance of $140 to $150 million, reflecting an order mix that is weighted more heavily to CosMx, with material CosMx revenue recognition expected to begin in 2023
nCounter revenue, inclusive of all service revenue, of $83 to $84 million, as compared to previous guidance of $90 to $95 million
Adjusted EBITDA loss of approximately $100 million, as compared to previous guidance of $75 to $85 million
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 tables 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 View Source, supplemental financial data that include our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the third quarter and the nine months ended September 30, 2022 and for each quarter of and the full year of 2021.

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: www.nanostring.com. A replay of the call will be available beginning November 7, 2022 at 7:30pm ET through midnight ET on November 14, 2022. To access the replay, dial (866) 813-9403 or (929) 458-6194 and reference Conference ID: 931170. The webcast will also be available on our website for one year following the completion of the call.