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Heska Corporation Reports First Quarter 2020 Results

On May 7, 2020 Heska Corporation (NASDAQ: HSKA; "Heska" or "Company"), a leading provider of advanced veterinary diagnostic and specialty products, reported financial results for its first quarter ended March 31, 2020 (Press release, Heska, MAY 7, 2020, View Source [SID1234557404]). The Company reports two segments: Core Companion Animal ("CCA") and Other Vaccines & Pharmaceuticals ("OVP"). The Company forecast provided during the February 25, 2020 release is referred to as "2020 Outlook".

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(1) "PVD" is Pharmaceuticals, Vaccines and Diagnostic, and includes Tri-Heart heartworm. (2) "bps" is basis points. (3) See "Use of Non-GAAP Financial Measures" and the related reconciliations provided below.
Note: Numbers may not foot due to rounding.

Kevin Wilson, Heska’s Chief Executive Officer and President, commented, "It is with mixed emotions that I report that the first quarter of 2020 was a strong start to the year for Heska. By grace alone, our extended Heska family in North America, Europe, Australia, and Malaysia is safe, employed and healthy. We are filled with thanks for our unmerited good fortune and we grieve for those who have been directly and tragically affected by COVID-19. Our business concerns pale in comparison to their health and value. It is with sincere humility that we give thanks for own good fortune and health and we carry on with our professional and personal duties each day.

In the first quarter, Heska grew revenue, expanded margins, achieved major strategic milestones, reaffirmed the benefits of a secure subscriptions model, improved our balance sheet, added to our cash position, and advanced our research and development projects. In the face of a global COVID-19 crisis, our accomplishment in nearly all key areas met or exceeded our goals in the quarter.

Heska strongly performed in our most important Point of Care ("POC") Lab Consumables business, which was up 15.7% over the prior year period.
Heska completed the on-time acquisition of scil animal care company GmbH ("scil") for $110 million dollars, when most global M&A transactions were paused or terminated.
Heska adjusted exceptionally well to the COVID-19 crisis by protecting employees and their families, pets and their families, veterinary teams and their families, and Heska’s commercial capacity, brand and culture. Our business continuity plans are working well."
Mr. Wilson continued, "Risks properly identified and pressure thoughtfully managed can produce opportunities for prepared growth companies like Heska during times of crisis. We believe Heska is well prepared and positioned. Our end markets remain fundamentally healthy and our supply chain is intact. Our balance sheet is in great shape and our cash on-hand projections, even in severely down-market scenarios, confirm our long-term ability to simultaneously perform financially and pursue growth strategies. With these foundations in place, Heska accomplished a great deal in the first period of 2020 and we continue to expect positive progress throughout the balance of the year."

Impact of COVID-19 Pandemic on Our People.

In the latter half of the quarter, we experienced modest impact from government restrictions on the movement of people, goods, and services. Fortunately, those we serve, veterinarians and herd animal health experts, are deemed essential services in areas of government mandated restrictions. To service them safely and efficiently, Heska teams quickly adjusted to a targeted, remote workforce posture and put the care and health of people and our brand first. Heska has not laid off or furloughed employees nor reduced the salaries they and their families depend upon, because the data and business fundamentals have not supported the need for such measures. We have been fortunate. Our investment in people has been both the right thing to do and also good for business. Our associates and customers have responded to our support by showing great care for each other and Heska through strong loyalty and increased performance in key business and relational areas; these benefits have continued into the second quarter.

Impact of COVID-19 Pandemic on Our Business.

Because of social distancing measures, on-site installations of POC Lab and Imaging equipment will experience intermittent delays. While not significant to the overall results of the first quarter, on-site installations of equipment were impacted in March. We anticipate the impact to on-site installations and capital equipment expenditures to continue for at least the remainder of 2020.

While we have experienced some intermittent delays in receiving supply, Heska’s supply chain has not been significantly impacted and we do not expect material changes to current supply availability trends over the remaining months of 2020.

Our major research and development projects are continuing to progress substantially as planned, but we have experienced sporadic delays receiving validation samples and device components as well as inefficiencies in remote collaboration and field-testing. We anticipate these delays to result in slippage of 90 to 120 days in our new products’ commercial roll-out schedules. While these delays are unfortunate, we are taking the additional time to improve product features and benefits.

We do not know how long COVID-19 related challenges will continue. The ultimate impact on our business will depend on many factors substantially beyond our control and difficult to predict. In the near-term and with asynchronous variation across geographies, we anticipate some veterinary hospitals will temporarily: (1) realize lower average diagnostics use as a result of deferred and elective patient visits, and (2) delay capital equipment investments as a result of heightened conservatism and the effects of social distancing on in-clinic demonstrations and installations. Despite these headwinds, we believe we are well positioned; (1) our customers and products are essential, (2) our main POC Lab business continues to show healthy consumables use and margin, (3) our subscriptions model metrics continue to show solid performance, (4) our vaccines and pharmaceuticals business continues to track our 2020 Outlook, (5) our balance sheet is strong, and (6) our employees, logistics, supply chain, and operations continue to operate well in the current environment and they are prepared for both a staged return and an instant-on return to full capacity.

International Expansion

scil animal care company, Germany. Heska worked diligently throughout the first quarter to finalize the acquisition of scil. This represents a transformative milestone in the Company’s long-term strategic plan. scil is a proven European based leader in veterinary point of care laboratory and imaging diagnostics, with a significant, longstanding base of loyal customers, a top three market position in Germany, France, Italy, Spain and Canada, and a growing presence in the United Kingdom, Scandinavia, Eastern Europe, Latin America and Malaysia. Heska’s combination with scil creates a unified and difficult-to-replicate global veterinary diagnostics company with critical market share leadership in key countries to service millions of pets through tens of thousands of veterinarians and active point of care analyzers around the world.

Summary

"I believe that properly prepared companies, in structurally sound industries, that invest in their people and capabilities during difficult times like these will be in a position for above market performance when uncertainty recedes. Heska intends to be one of these companies. Our capabilities and end markets are intact. While no business will be left untouched by COVID-19, we are well positioned. We will continue to secure past wins, pressure test and adjust to risks, invest for long-term gain, and build the strengths of our team and end markets. Our balance sheet is strong, our end markets are fundamentally healthy, our addressable geographies and customers have recently doubled, our innovation pipeline is packed and progressing for major launches in 2020 and 2021, and we are positioned well to grow. Pet healthcare broadly and Heska specifically are wonderful places in which to invest for the future, especially in uncertain times, and I am excited to prudently continue to do so," concluded Mr. Wilson.

Financial Results

Revenue

2020 first quarter revenue was $30.7 million, a 3.9% increase from $29.5 million in the first quarter of 2019. CCA segment revenue increased 10.5% to $27.3 million, from $24.7 million in the first quarter of 2019. The $2.6 million increase was driven by a 15.7% increase in POC Lab Consumables and a $1.9 million increase in PVD related to the contract manufactured heartworm preventive, Tri-Heart, which had reduced channel demand in 2019. These increases were partially offset by a 22.3% decrease in capital lease placements and outright sales of POC Lab Instruments and a 10.3% decrease in POC Imaging sales.

OVP segment revenue decreased 30.2% to $3.3 million in the first quarter of 2020, compared to $4.8 million in the first quarter of 2019. The decrease was driven primarily by reduced customer requirements compared to the first quarter of 2019.

Gross Profit

Gross profit increased 7.2% to $13.4 million in the first quarter of 2020, compared to $12.5 million in the first quarter of 2019. Gross margin increased to 43.9% in the first quarter of 2020, compared to 42.5% in the first quarter of 2019. The increase in both gross profit and gross margin percentage was driven primarily by favorable product mix related to increased revenue from consumable sales.

Operating Expenses

Total operating expenses in the first quarter of 2020 were $18.1 million (58.9% of sales), compared to $12.6 million (42.8% of sales) in the prior year. The increase is driven primarily by $3.9 million of one-time acquisition and restructuring costs related to the acquisition of scil. The remaining variance is related to increased investments in research and development of $0.8 million relating to our new product initiatives. Finally, the increase in sales and marketing is as a result of international expansion, both organic and inorganic.

Net Loss Attributable to Heska and EPS

Net loss attributable to Heska was $5.3 million for the three months ended March 31, 2020, compared to net income attributable to Heska of $0.8 million in the prior year period. Net loss per diluted share for the first quarter 2020 was $0.70 compared to net income per diluted share for the first quarter of 2019 of $0.10. Net income is lower in the three months ended March 31, 2020 as compared to the three months ended March 31, 2019 due to increases operating expenses as discussed above, as well as cash interest and amortization charges relating to the Convertible Notes issued in the third quarter of 2019.

Adjusted EBITDA and Non-GAAP EPS

Adjusted EBITDA for the first quarter 2020 was $0.9 million (3.0% adjusted EBITDA margin) compared to $2.2 million (7.6% adjusted EBITDA margin) in the first quarter 2019. Non-GAAP EPS was a loss of $0.14 per diluted share for the first quarter 2020 compared to earnings of $0.09 per diluted share in the first quarter 2019. The decline in both metrics is due to purposeful investment in research and development and international expansion of sales and marketing. Refer to ‘Reconciliation of GAAP to Non-GAAP’ included with this release.

Balance Sheet

For the three months ended March 31, 2020, we had $191.2 million of cash and cash equivalents and working capital of $223.8 million. Net cash used in operating activities was $4.8 million in the three months ended March 31, 2020 compared to net cash provided by operating activities of $0.7 million for the three months ended March 31, 2019. Net cash used in investing activities was $14.6 million in the first quarter 2020 compared to $0.5 million in the first quarter of 2019 driven by $14.4 million payment of consideration for the December 2019 acquisition of CVM Diagnostico Veterinario, S.L. and CVM Ecografía, S.L. (referred to collectively as "CVM"). Net cash provided by financing activities was $121.6 million in the first quarter 2020 compared to net cash used in financing activities of $4.6 million for the first quarter 2019. The change was driven by an $122.0 million increase in proceeds from the issuance of preferred stock in anticipation of the acquisition of scil. Approximately $111.0 million was used subsequent to the first quarter for consideration in the acquisition of scil.

2020 Combined Outlook

As previously discussed, Heska currently anticipates that its operations, for at least the remainder of 2020, will be adversely impacted by the current economic environment and COVID-19 social distancing strategies, especially as it relates to on-site installation and sale of capital equipment. Considering the impact and the potential impact resulting from COVID-19 on Heska’s organic growth as well as on the recently acquired scil European (primarily) business, we have revised the Company’s consolidated 2020 Outlook.

The table below introduces fiscal year 2020 guidance ranges ("2020 Combined Outlook") for revenue and adjusted EBITDA margin for Heska Corporation compared to previous Heska Corporation stand-alone guidance presented in the February 25, 2020 Earnings Release. Among the factors and metrics considered in Heska’s 2020 Combined Outlook, Heska stand-alone net customer acquisition forecast decreased approximately 50-60% due to updated COVID-19 related scenario assumptions.

Excludes estimates for taxes, interest, depreciation and amortization, acquisition and other one-time costs, and stock-based compensation.

Excludes impact of scil acquisition.

Heska is unable to provide a reconciliation of the non-GAAP guidance measure to the corresponding GAAP measure on a forward-looking basis without unreasonable effort due to the high variability and low visibility of most of the excluded items. Material changes to any one of these items could have a significant impact on future GAAP results. Heska believes the non-GAAP presentation is more in-line with future ongoing operating performance.

2020 Investor and Analyst Day and Multi-Year Outlook

The Company plans to host an Analyst and Investor Day on November 12, 2020 (formerly September 2020) in New York City, pending evaluation of the then-current COVID-19 situation, to discuss the Company’s growth strategy, consolidated performance including its recent major acquisitions, Element UF demonstration, and multi-year outlook. Details surrounding the event will be forthcoming.

Investor Conference Call

Management will conduct a conference call on May 7, 2020 at 9 a.m. MT (11 a.m. ET) to discuss the first quarter 2020 financial results. To participate, dial 1-866-548-4713 (domestic) or 1-323-794-20933 (international) and reference conference call access number 3918137. The conference call will also be broadcast live over the Internet at www.heska.com. To listen, simply log on to the web at this address at least ten minutes prior to the start of the call to register and download and install any necessary audio software. Telephone replays of the conference call will be available for playback until May 21, 2020. The telephone replay may be accessed by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The replay access number is 3918137. The webcast will also be archived on www.heska.com for 90 days.

ANI Pharmaceuticals Reports First Quarter 2020 Results and Appoints Interim CEO

On May 7, 2020 ANI Pharmaceuticals, Inc. ("ANI") (NASDAQ: ANIP) reported its financial results for the three months ended March 31, 2020 (Press release, ANI Pharmaceuticals, MAY 7, 2020, View Source [SID1234557401]). The Company will host its earnings conference call this morning, May 7, 2020, at 10:30 AM ET. Investors and other interested parties can join the call by dialing (866) 776-8875. The conference ID is 5243607.

"ANI generated net revenues and non-GAAP earnings that met management’s expectations during a period that was marked by significant uncertainties due to the COVID-19 pandemic. Our performance during this period is a testament to the commitment of our employees and to the strength of the business that we have built. I am proud of the accomplishments that were made during my eleven-year tenure as CEO of ANI. During this time, we have built ANI from a small private company to a thriving public specialty pharmaceutical business with an increasing diverse commercial product offering and an incredibly valuable pipeline opportunity in Cortrophin Gel. As I depart ANI, I am confident that I leave the business in good health, in the hands of a very strong management team, and with its best days ahead of it. I welcome Patrick Walsh from the Board of Directors to the role of interim CEO and trust in his ability to lead the Company until such time as my replacement is identified."

Appoints Interim CEO

As previously announced, Mr. Przybyl will depart as President and CEO on May 10, 2020. The Board of Directors of ANI (BOD) has appointed Patrick D. Walsh interim President and CEO, effective May 11, 2020, until such time that Mr. Przybyl’s permanent replacement is hired. Mr. Walsh has served on the ANI BOD since 2018 and has extensive pharmaceutical industry experience. For Mr. Walsh’s complete bio, please refer to ANI’s proxy statement filed on April 23, 2020. The BOD has retained nationally recognized executive search firm Heidrick & Struggles and is currently conducting the search for a President and CEO.

Continues Expansion of Commercialized Product Portfolio

During the first quarter of 2020, we successfully integrated the Amerigen Pharmaceuticals, Ltd. U.S. product portfolio, which was purchased in January for $52.5 million. This transaction increased our commercialized generic product portfolio by nine products from 35 to 44 and increased our pipeline portfolio by an additional thirteen opportunities. In addition, we launched five generic products during the quarter, further expanding our generic offerings to 49, and our total commercialized offerings including brands to 60.

Generic Pharmaceutical Products

Net revenues for generic pharmaceutical products were $37.5 million during the three months ended March 31, 2020, an increase of 19% compared to $31.6 million for the same period in 2019. The primary drivers of the increase are the September 2019 launch of Vancomycin Oral Solution and the January 2020 launch of Miglustat, Mixed Amphetamine Salts, Penicillamine and Paliperidone, all products acquired in January from Amerigen Pharmaceuticals, Ltd. ("Amerigen"). These increases were tempered by decreases in sales of Vancomycin capsules, Esterified Estrogen with Methyltestosterone ("EEMT"), Erythromycin Ethylsuccinate ("EES"), and Ezetimibe Simvastatin.

Branded Pharmaceutical Products

Net revenues for branded pharmaceutical products were $9.2 million during the three months ended March 31, 2020, a decrease of 48% compared to $17.5 million for the same period in 2019. The primary reasons for the decrease were lower unit sales of Inderal XL, Inderal LA and Atacand as well as decreased sales of Arimidex.

Contract Manufacturing

Contract manufacturing revenues were $2.0 million during the three months ended March 31, 2020, a decrease of 19% compared to $2.4 million for the same period in 2019, due to the timing and volume of orders from contract manufacturing customers in the period.

Royalty and Other

Royalty and other were $1.1 million during the three months ended March 31, 2020, a decrease of $0.2 million from $1.3 million for the same period in 2019, primarily due to a decrease in royalty and laboratory service revenues, tempered by increases in product development revenues earned by ANI Canada during the three months ended March 31, 2020.

Operating Expenses

Operating expenses increased to $57.6 million for the three months ended March 31, 2020, from $48.5 million in the prior year period. The increase was primarily due to the following:

– $7.1 million increase in cost of sales, primarily as a result of $2.7 million in cost of sales representing the excess of fair value over cost for inventory acquired in the Amerigen acquisition and subsequently sold during the period, increased volumes related to a shift in product mix towards generic products, current period inventory reserve charges and increased sales of products subject to profit-sharing arrangements,
– $4.6 million in the build of Cortrophin pre-launch commercial inventories (which are expensed for US GAAP); there were no such comparable activities in the first quarter 2019, and
– $2.0 million increase in research and development expense, primarily due to $3.8 million in-process research and development expense from the Amerigen acquisition, partially offset by a decrease in expense related to the Cortrophin re-commercialization project as we begin to complete our development efforts.

These increases were tempered by a $4.9 million decrease in depreciation and amortization expense, primarily due to the non-reoccurrence of amortization expense recorded in relation to the January 2019 royalty buy out, partially offset by the amortization of the Abbreviated New Drug Applications and marketing and distribution rights acquired in January 2020 from Amerigen.

Cost of sales exclusive of the $2.7 million net impact related to the excess of fair value over the cost of inventory sold during the period as a percentage of net revenues increased to 38% during the three months ended March 31, 2020, from 28% during same period in 2019, primarily as a result of a shift in product mix to an increased volume of generic products, which have lower average selling prices, inventory reserve charges in the current quarter as well as increased sales of products subject to profit-sharing arrangements during the current quarter.

Net Loss and Diluted Loss per Share

Net loss was $7.0 million for the three months ended March 31, 2020, as compared to net income of $0.4 million in the prior year period. The effective consolidated tax benefit rate for the three months ended March 31, 2020 was 29.7%.

Diluted loss per share for the three months ended March 31, 2020 was $0.59, based on 11,902 thousand diluted shares outstanding, as compared to diluted earnings per share of $0.04 in the prior year period. Adjusted non-GAAP diluted earnings per share was $1.04, as compared to adjusted non-GAAP diluted earnings per share of $1.30 in the prior year period. For a reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure, please see Table 4.

ANI filed the sNDA for Cortrophin Gel re-commercialization on March 23, 2020, on track with our long-standing publicly projected Q1 2020 target filing date. The FDA initially set a PDUFA goal date of July 23, 2020, however as announced on April 29, 2020, subsequently issued a Refusal to File (RTF) letter. ANI will request a Type-A meeting with the FDA in order to discuss the deficiencies identified in the RTF letter and our plan to address each of them. In addition, significant accomplishments since the fourth quarter 2020 press release (dated February 27, 2020) include:

ANI successfully completed manufacturing for a sixth commercial scale batch of Corticotropin API. All six commercial scale batches have been analytically consistent with each other and have met all API release specifications.
ANI obtained 6 months accelerated and real-time stability on all API registration batches which facilitated sNDA filing by the end of first quarter 2020.
ANI successfully completed three media fill simulations demonstrating sterility assurance for our Cortrophin Gel manufacturing process.
ANI obtained 6 months accelerated and real-time stability on all drug product registration batches which also facilitated sNDA filing by the end of first quarter 2020.
ANI successfully completed full shipping validation which confirmed that the integrity of Cortrophin Gel is fully maintained to support our commercial launch and distribution plan.
In preparation for a future launch, ANI has continued to stockpile porcine pituitaries and corticotropin API to ensure that it can satisfy market demand.
For further details, please see ANI’s Cortrophin Gel Re-commercialization Milestone Update in Table 5.

ANI Guidance for the Full Year 2020

Due to inherent uncertainties regarding the duration and impact of the coronavirus (COVID-19) pandemic, ANI is suspending its previously announced 2020 financial guidance.

ANI Product Development Pipeline

ANI’s pipeline consists of 116 products, addressing a total annual market size of $5.8 billion, based on data from IQVIA. Of these, ANI expects that at least 52 can be commercialized based on either CBE-30s or prior approval supplements filed with the FDA.

Non-GAAP Financial Measures

Adjusted non-GAAP EBITDA

ANI’s management considers adjusted non-GAAP EBITDA to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by non-cash stock-based compensation and differences in capital structures, tax structures, capital investment cycles, ages of related assets, and compensation structures among otherwise comparable companies. Management uses adjusted non-GAAP EBITDA when analyzing Company performance.

Adjusted non-GAAP EBITDA is defined as net income, excluding tax expense or benefit, interest expense, depreciation, amortization, the excess of fair value over cost of acquired inventory, stock-based compensation expense, expense from acquired in-process research and development, gains on inventory reserve recoveries, transaction and integration expenses, Cortrophin pre-launch charges, other income / expense and certain other items that vary in frequency and impact on ANI’s results of operations. Adjusted non-GAAP EBITDA should be considered in addition to, but not in lieu of, net income or loss reported under GAAP. A reconciliation of adjusted non-GAAP EBITDA to the most directly comparable GAAP financial measure is provided in Table 3.

Adjusted non-GAAP Net Income

ANI’s management considers adjusted non-GAAP net income to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, inventory reserve recoveries, Cortrophin pre-launch charges, acquired IPR&D expense, transaction and integration expenses and certain other items that vary in frequency and impact on ANI’s results of operations. Management uses adjusted non-GAAP net income when analyzing Company performance.

Adjusted non-GAAP net income is defined as net income, plus the excess of fair value over cost of acquired inventory sold, stock-based compensation expense, transaction and integration expenses, non-cash interest expense, depreciation and amortization expense, expense from acquired in-process research and development, Cortrophin pre-launch charges and certain other items that vary in frequency and impact on ANI’s results of operations, less the tax impact of these adjustments calculated using an estimated statutory tax rate. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP net income should be considered in addition to, but not in lieu of, net income reported under GAAP. A reconciliation of adjusted non-GAAP net income to the most directly comparable GAAP financial measure is provided in Table 4.

Adjusted non-GAAP Diluted Earnings per Share

ANI’s management considers adjusted non-GAAP diluted earnings per share to be an important financial indicator of ANI’s operating performance, providing investors and analysts with a useful measure of operating results unaffected by the excess of fair value over cost of acquired inventory sold, non-cash stock-based compensation, non-cash interest expense, depreciation and amortization, inventory reserve recoveries, Cortrophin pre-launch charges, acquired IPR&D expense, transaction and integration expenses and certain other items that vary in frequency and impact on ANI’s results of operations.

Management uses adjusted non-GAAP diluted earnings per share when analyzing Company performance.

Adjusted non-GAAP diluted earnings per share is defined as adjusted non-GAAP net income, as defined above, divided by the diluted weighted average shares outstanding during the period, as adjusted for the dilutive effect of the convertible debt notes (in 2019), when applicable. Management will continually analyze this metric and may include additional adjustments in the calculation in order to provide further understanding of ANI’s results. Adjusted non-GAAP diluted earnings per share should be considered in addition to, but not in lieu of, diluted earnings or loss per share reported under GAAP. A reconciliation of adjusted non-GAAP diluted earnings per share to the most directly comparable GAAP financial measure is provided in Table 4.

Strata Oncology and Collaborators to Present Data at ASCO 2020

On May 7, 2020 Strata Oncology, a precision oncology company advancing molecular indications for cancer therapies, reported three studies highlighting data featuring its comprehensive genomic profiling (CGP) assay StrataNGSTM will be presented at the 2020 Annual Meeting of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper), taking place digitally from May 29 – May 31 (Press release, Strata Oncology, MAY 7, 2020, View Source [SID1234557400]).

All abstracts are available online May 13.

Abstract # 3574, "PCR-based Comprehensive Genomic Profiling: Feasibility From >20,000 Tumor Tissues Specimens and Predicted Impact on Actionable Biomarker Identification Versus Hybrid Capture and Plasma" presented by Scott Tomlins, M.D., Ph.D., Strata Oncology
Abstract # 312647, "The Impact of Tumor NGS Testing on Hereditary Cancer Risk Assessment and Population Management in an Integrated Community Health Care System" presented by Sachdev Thomas, M.D., Kaiser Permanente Northern California
Abstract # e19185, "Implementing a Genomic Oncology Program in an Integrated Health Care Network with Large Scale Genomic Next Generation Sequencing (NGS) Testing of Advanced Cancers in a Community Setting" presented by Marie Suga, M.D., Kaiser Permanente Northern California
About StrataNGS
StrataNGS is a comprehensive genomic profiling assay that assesses DNA and RNA in solid tumors. The assay requires industry-low tumor tissue requirements (0.5mm2). StrataNGS is performed on co-isolated RNA and DNA and detects all classes of genomic alterations, including SNVs, small insertions and deletions, gene fusions, exon skipping mutations and copy number changes. Results include MSI and TMB to help inform immunotherapy decisions.

Leidos Announces Launch of Senior Unsecured Notes Offering

On May 7, 2020 Leidos Holdings, Inc. (NYSE: LDOS) ("Leidos"), a FORTUNE 500 science and technology leader, reported that its wholly-owned subsidiary, Leidos, Inc. (the "Issuer"), intends to commence, subject to market and customary conditions, a private offering of senior unsecured notes (the "Notes") pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act") (Press release, Leidos, MAY 7, 2020, View Source [SID1234557399]).

The Notes will be the senior unsecured obligations of the Issuer and will be fully and unconditionally guaranteed on a senior basis by Leidos. The Notes and the related guarantee will be structurally subordinated to the liabilities of Leidos’ and the Issuer’s existing and future subsidiaries.

The Issuer intends to use the net proceeds from the offering to pay the outstanding balance on the 364-day bridge loan facility entered into in connection with the previously announced acquisition of DYHC Inc. from the Dynetics, Inc. Employee Stock Ownership Trust, and to pay related fees and expenses.

The Notes and the related guarantee will be offered in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act, and outside the United States to non-United States persons in compliance with Regulation S under the Securities Act. The Notes and the related guarantee have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of, any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or exemption under the securities laws of any such jurisdiction.

Accelerate Diagnostics Announces First Quarter Financial Results and Provides COVID-19 Business Updates

On May 7, 2020 Accelerate Diagnostics, Inc. (NASDAQ: AXDX), reported financial results for the quarter ending March 31, 2020 and provided a business update regarding the impact of the ongoing COVID-19 pandemic on the Company’s operations (Press release, ACCELERATED MEDICAL DIAGNOSTICS, MAY 7, 2020, View Source [SID1234557398]).

"Our first quarter got off to a solid start, as sales, new contracts, and go-lives all progressed as anticipated through January and February. As we moved into March, hospitals began shifting their focus toward preparing for and treating COVID-19 patients, and these shifting priorities, along with meaningful restrictions on hospital access, led to lower-than-expected new contracts and go-lives for the quarter," commented Jack Phillips, Chief Executive Officer of Accelerate Diagnostics, Inc. "However, we are adapting our business to maximize our commercial execution in the near term, and we will continue to work diligently on our longer-term initiatives to strengthen our commercial foundation and expand our portfolio of innovative, life-saving products."

2020 First Quarter Financial and Operational Highlights

Added 13 net new global commercially contracted instruments, including 21 new U.S. contracted instruments.
Live U.S. Pheno instruments at the end of the first quarter were 197, with another 239 U.S. contracted Pheno instruments not yet live.
Net sales for the first quarter of $2.3 million, compared to $1.8 million in the first quarter of 2019.
Gross margin was 45% for the quarter, compared to 48% in the first quarter of 2019.
Selling, general, and administrative expenses for the quarter were $12.9 million, compared to $12.7 million in the first quarter of 2019.
Research and development (R&D) costs for the quarter were $5.8 million, compared to $6.9 million in the first quarter of 2019.
Net loss was $21.3 million in the first quarter, or $0.39 per share, which included $4.2 million in non-cash stock-based compensation expense.
Net cash used in the quarter was $16.4 million, and the Company ended the quarter with total cash, investments, and cash equivalents of $92.0 million.
Entered into a commercial collaboration agreement with BioCheck, Inc., San Francisco, U.S., including their affiliate, Sophonix Ltd., Beijing, China, to sell serology-based SARS-COV-2 antibody tests (IgG and IgM) in the U.S. and EMEA, as disclosed in a press release dated April 14th, 2020.
Full financial results for the quarter ending March 31, 2020 will be filed on Form 10-Q through the Securities and Exchange Commission’s (SEC) website at View Source

First Quarter 2020 Results Conference Call Information

The company will review full financial results for the first quarter of 2020 after the market close on Thursday, May 7, 2020. The company’s management will host a conference call at 4:30 p.m. Eastern Time that same day to review the results. To listen to the audio webcast online, visit ir.axdx.com. A replay of the audio webcast will be available until August 7, 2020.

To listen by phone, dial +1.877.883.0383 and enter the conference ID: 8692081
International participants may dial +1.412.317.6506. Please dial in 10-15 minutes prior to the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using the replay code 10141855 until May 21, 2020.