NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life
science tools for translational research and molecular diagnostic
products, today reported financial results for the second quarter
of 2017.
Second Quarter Financial
Highlights
- Total revenue of $34.6 million, 53% year-over-year growth
- Total product and service revenue of $18.3 million, 5%
year-over-year growth
- Consumables revenue of $11.0 million, including $1.8 million of
Prosigna® IVD kits, 7% year-over-year growth
- Instrument revenue of $6.0 million, 6% year-over-year
decline
- Collaboration revenue of $16.3 million, including $11.3 million
related to the terminated Medivation and Astellas collaboration
agreement
“Overall, we’re pleased with the progress we are making toward
our strategic objectives, and we expect the build out of our
commercial organization, together with new product introductions,
to begin showing positive impact in the second half of the year,”
commented Brad Gray, president and chief executive officer of
NanoString. “Our pipeline of new instruments, including Digital
Spatial Profiling and Hyb & SeqTM, is advancing according to
plan and with the funding provided through the collaboration with
Lam Research announced today, the future looks even more
exciting.”
Recent Business Highlights
- Entered into $50 million development collaboration with Lam
Research to advance development of the Hyb & Seq next
generation sequencing platform
- Strengthened the balance sheet by raising $56.5 million of net
proceeds in a common stock offering
- Grew installed base to approximately 540 nCounter® Analysis
Systems at June 30, 2017
- Added 20 new sales positions year to date, expanding the life
science sales force by more than 25%
- Hired J. Chad Brown as Senior Vice President, Sales &
Marketing to lead commercial operations
- Appointed Elisha W. Finney, former CFO of Varian Medical
Systems, to the board of directors
- Record number of abstracts presented by the company, its
customers and its collaborators at the annual meeting of the
American Society of Clinical Oncology (ASCO)
Second Quarter Financial Results
Revenue for the three months ended June 30, 2017 increased
by 53% to $34.6 million, as compared to $22.6 million for the
second quarter of 2016. Instrument revenue was $6.0 million, 6%
lower than the prior year period, with nCounter® SPRINTTM systems
representing approximately 40% of systems sold. Consumables
revenue, excluding Prosigna, was $9.2 million for the second
quarter of 2017, 1% higher than in the comparable 2016 quarter.
Prosigna® IVD kit revenue was $1.8 million for the quarter, an
increase of 48% over the second quarter of 2016. Collaboration
revenue totaled $16.3 million, which included $11.3 million related
to the terminated Medivation and Astellas collaboration agreement,
compared to $5.1 million for the second quarter of 2016. Gross
margin on product and service revenue was 55% for the second
quarter of 2017, comparable with the prior year period.
Research and development expense increased by 25% to $11.0
million for the second quarter of 2017 versus $8.8 million for the
second quarter of 2016, reflecting increased costs associated with
biopharma collaborations announced in 2016 and investments in new
products and technologies under development for the life science
research market, including 3D Biology™, Digital Spatial Profiling,
and Hyb & Seq technologies. Selling, general and
administrative expense increased by 20% to $18.6 million for the
second quarter of 2017 compared to $15.5 million for the prior year
period, reflecting added staffing, including the expanded sales
channel, and other costs supporting the company’s growth.
Net loss for the three months ended June 30, 2017 was $4.6
million, or a loss of $0.20 per share, compared with $10.8 million,
or $0.55 per share, for the second quarter of 2016.
Outlook for 2017
On May 18, 2017, when the company reported the termination of
the Medivation/Astellas collaboration, total revenue guidance was
updated to $106 million to $111 million, but no other aspects of
2017 financial guidance were formally updated. Today, the company
has fully updated its guidance for 2017 relative to its original
outlook as follows:
- Total revenue in the range of $114 million to $118 million,
which was originally $100 million to $105 million
- Product and service revenue in the range of $81 million to $85
million, unchanged
- Gross margin on product and service revenue in the range of 57%
to 58%, unchanged
- Operating expenses in the range of $123 million to $126
million, which was previously $117 million to $120 million
- Operating loss in the range of $42 million to $46 million,
which was previously $49 million to $53 million
- Net loss per share in the range of $2.03 to $2.20, which was
previously $2.51 to $2.69
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. Individuals interested in listening to the
conference call may do so by dialing (888) 793-9492 for domestic
callers, or (734) 385-2643 for international callers. Please
reference Conference ID 50352884. To listen to a live webcast,
please visit the investor relations section of the company’s
website at: www.nanostring.com. A replay of the call will be
available beginning August 8, 2017 at 7:30pm ET through 7:30pm
ET on August 15, 2017. To access the replay, dial (855)
859-2056 or (404) 537-3406 and reference Conference ID: 50352884.
The webcast will also be available on the company’s website for one
year following the completion of the call.
About NanoString Technologies, Inc.
NanoString Technologies provides life science tools for
translational research and molecular diagnostic products. The
company's nCounter Analysis System has been employed in life
sciences research since it was first introduced in 2008 and has
been cited in more than 1,600 peer-reviewed publications. The
nCounter Analysis System offers a cost-effective way to easily
profile the expression of hundreds of genes, proteins, miRNAs, or
copy number variations, simultaneously with high sensitivity and
precision, facilitating a wide variety of basic research and
translational medicine applications, including biomarker discovery
and validation. The company's technology is also being used in
diagnostics. The Prosigna Breast Cancer Prognostic Gene Signature
Assay together with the nCounter Dx Analysis System is FDA 510(k)
cleared for use as a prognostic indicator for distant recurrence of
breast cancer. In addition, the company is collaborating with
multiple biopharmaceutical companies in the development of
companion diagnostic tests for various cancer therapies, helping to
realize the promise of precision oncology.
For more information, please visit www.nanostring.com.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include statements regarding the impact of changes in
the company's commercial organization, the capabilities of the
company’s new products and future products under development,
development funding and its estimated 2017 operating results. Such
statements are based on current assumptions that involve risks and
uncertainties that could cause actual outcomes and results to
differ materially. These risks and uncertainties, many of which are
beyond our control, include market acceptance of our products;
delays or denials of regulatory approvals or clearances for
products or applications; delays or denials of reimbursement for
diagnostic products; the impact of competition; the impact of
expanded sales, marketing, product development and clinical
activities on operating expenses; delays or other unforeseen
problems with respect to manufacturing, product development or
clinical studies; adverse conditions in the general domestic and
global economic markets; as well as the other risks set forth in
the company's filings with the Securities and Exchange Commission.
These forward-looking statements speak only as of the date hereof.
NanoString Technologies disclaims any obligation to update these
forward-looking statements.
The NanoString Technologies logo, NanoString, NanoString
Technologies, Hyb & Seq, nCounter, nCounter SPRINT, and
Prosigna are registered trademarks or trademarks of NanoString
Technologies, Inc. in various jurisdictions.
NANOSTRING TECHNOLOGIES, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share amounts) |
(Unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue: |
|
|
|
|
|
|
|
Instruments |
$ |
6,035 |
|
|
$ |
6,444 |
|
|
$ |
10,505 |
|
|
$ |
9,846 |
|
Consumables |
9,194 |
|
|
9,068 |
|
|
17,786 |
|
|
16,276 |
|
In vitro diagnostic
kits |
1,835 |
|
|
1,241 |
|
|
3,274 |
|
|
1,995 |
|
Services |
1,246 |
|
|
735 |
|
|
2,510 |
|
|
1,507 |
|
Total
product and service revenue |
18,310 |
|
|
17,488 |
|
|
34,075 |
|
|
29,624 |
|
Collaboration |
16,282 |
|
|
5,139 |
|
|
18,581 |
|
|
7,700 |
|
Total
revenue |
34,592 |
|
|
22,627 |
|
|
52,656 |
|
|
37,324 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
Cost of product and
service revenue |
8,224 |
|
|
7,871 |
|
|
15,387 |
|
|
13,741 |
|
Research and
development |
11,038 |
|
|
8,799 |
|
|
21,839 |
|
|
16,007 |
|
Selling, general and
administrative |
18,644 |
|
|
15,507 |
|
|
36,210 |
|
|
30,411 |
|
Total
costs and expenses (a) (b) |
37,906 |
|
|
32,177 |
|
|
73,436 |
|
|
60,159 |
|
Loss from
operations |
(3,314 |
) |
|
(9,550 |
) |
|
(20,780 |
) |
|
(22,835 |
) |
Other income
(expense): |
|
|
|
|
|
|
|
Interest income |
150 |
|
|
94 |
|
|
297 |
|
|
162 |
|
Interest expense |
(1,528 |
) |
|
(1,326 |
) |
|
(3,029 |
) |
|
(2,641 |
) |
Other income
(expense) |
184 |
|
|
12 |
|
|
197 |
|
|
(59 |
) |
Total
other income (expense), net |
(1,194 |
) |
|
(1,220 |
) |
|
(2,535 |
) |
|
(2,538 |
) |
Net loss
before provision for income taxes |
(4,508 |
) |
|
(10,770 |
) |
|
(23,315 |
) |
|
(25,373 |
) |
Provision for income
taxes |
(47 |
) |
|
(35 |
) |
|
(92 |
) |
|
(35 |
) |
Net
loss |
$ |
(4,555 |
) |
|
$ |
(10,805 |
) |
|
$ |
(23,407 |
) |
|
$ |
(25,408 |
) |
Net loss per share,
basic and diluted |
$ |
(0.20 |
) |
|
$ |
(0.55 |
) |
|
$ |
(1.06 |
) |
|
$ |
(1.29 |
) |
Shares used in
calculating basic and diluted net loss per share |
22,672 |
|
|
19,803 |
|
|
22,121 |
|
|
19,736 |
|
|
|
|
|
|
|
|
|
(a)
Includes $2.8 million and $2.4 million of stock-based compensation
expense for the three months ended June 30, 2017 and 2016,
respectively, and $5.1 million and $4.3 million for the six months
ended June 30, 2017 and 2016, respectively. |
(b)
Includes $0.9 million and $0.8 million of depreciation and
amortization expense for the three months ended June 30, 2017 and
2016, respectively, and $1.7 million and $1.5 million for the six
months ended June 30, 2017 and 2016, respectively. |
NANOSTRING TECHNOLOGIES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
(Unaudited) |
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
40,647 |
|
|
$ |
20,583 |
|
Short-term investments |
58,690 |
|
|
53,453 |
|
Accounts
receivable, net |
18,482 |
|
|
22,193 |
|
Inventory |
15,759 |
|
|
13,812 |
|
Prepaid
expenses and other |
5,305 |
|
|
3,744 |
|
Total
current assets |
138,883 |
|
|
113,785 |
|
Property and equipment,
net |
13,644 |
|
|
12,158 |
|
Other assets |
515 |
|
|
430 |
|
Total
assets |
$ |
153,042 |
|
|
$ |
126,373 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
3,770 |
|
|
$ |
4,935 |
|
Accrued
liabilities |
11,609 |
|
|
12,344 |
|
Deferred
revenue, current portion |
17,067 |
|
|
19,033 |
|
Deferred
rent, current portion |
444 |
|
|
13 |
|
Lease
financing obligations, current portion |
— |
|
|
58 |
|
Total
current liabilities |
32,890 |
|
|
36,383 |
|
Deferred revenue, net
of current portion |
11,322 |
|
|
22,664 |
|
Deferred rent and other
liabilities, net of current portion |
8,669 |
|
|
7,655 |
|
Long-term debt and
lease financing obligations, net of current portion and debt
issuance costs |
48,137 |
|
|
47,366 |
|
Total
liabilities |
101,018 |
|
|
114,068 |
|
Total stockholders’
equity |
52,024 |
|
|
12,305 |
|
Total
liabilities and stockholders’ equity |
$ |
153,042 |
|
|
$ |
126,373 |
|
Contact
Douglas Farrell
Vice President, Investor Relations & Corporate Communications
dfarrell@nanostring.com
Phone: 206-602-1768
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