Accelerate Diagnostics reports Q2 2018 financial results

Published: Aug 06, 2018

 

Revenue up 142 Percent, Global install base up 25 Percent

TUCSON, Ariz., Aug. 6, 2018 /PRNewswire/ -- Accelerate Diagnostics, Inc. today announced financial results for the quarter ending June 30, 2018. The company posted revenue of $1.7 million, up 142% from the prior year quarter, and reported a record number of new agreements signed in the quarter bringing the global total to 430 instruments. Contracts for customer evaluations total 312 instruments while commercial placements grew to 118 across the U.S., European, and Middle East regions.

"We're excited to report a record number of new customer agreements this quarter," said Lawrence Mehren, President and CEO. "While not yet fully translated into revenue, this sales momentum, strong customer advocacy, and upcoming clinical outcome data are quite encouraging."

In addition, the company reported securing new agreements with prominent group purchasing organizations during the quarter. The agreements, covering approximately 1,400 hospitals, add additional value to member hospitals and aim to streamline the adoption process.

The company also announced progress on the development of its severe bacterial pneumonia kit including alignment with the U.S. Food and Drug Administration (FDA) on a shorter and less complex, 510(k) regulatory pathway, and clinical trial for the test. The expected start of the U.S. clinical trial is on or before our Q3 conference call.

Mr. Mehren, together with Steve Reichling, the company's Chief Financial Officer, will host a conference call to review the financial results, commercial progress, and development updates at 4:15 p.m. Eastern Time on August 6, 2018.

Second quarter 2018 results

  • Global install base increased by 25% during the quarter
  • Net sales of $1.7 million for the second quarter and $2.5 million year to date, compared to $699 thousand and $1.2 million, for the same respective periods in the prior year
  • Gross margin realized was 58% for the quarter and 52% year to date
  • Selling, general, and administrative expenses for the quarter were $15.3M and $29.7M year to date as compared to $11.5M and $22.0M from the respective same periods in the prior year. These year-over-year increases were driven by higher personnel and customer evaluation related costs in the US and EU
  • Research and development costs for the quarter were $6.1M and $12.9M year to date as compared to $5.5M and $9.8M from the respective same periods in the prior year. These year-over-year increases are the result of additional investments in the preparation for respiratory clinical trials and expanded scientific affairs activity
  • Net loss of $23.2 million in the second quarter and $44.0 million year to date, or $0.43 and $0.80 per share on weighted average basic shares of 54.0 million and 54.8 million shares outstanding, respectively. This net loss includes $3.4 million in non-cash stock-based compensation expense in the second quarter and $9.0 million year to date.
  • Net cash used in the quarter was $17.1 million, ending the quarter with total cash, investments, and cash-equivalents from all activities of $197.4 million

Full financial results for the quarter ending June 30, 2018 will be filed on Form 10-Q through the Securities and Exchange Commission's (SEC) website at http://www.sec.gov. The company anticipates filing on August 7, 2018. Investors are cautioned not to place undue reliance on these preliminary and unaudited estimates in the event of material changes.

Audio Webcast and Conference Call

Listen to an audio webcast of the call by visiting the events section of the company's investor relations website at ir.axdx.com. A replay of the audio webcast will be available until August 27, 2018.

To participate in the conference call, dial +1.877.883.0383 and enter the conference ID: 6994802

International participants may dial +1.412.902.6506. 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 access code 10120739 until August 27, 2018.

About Accelerate Diagnostics, Inc.

Accelerate Diagnostics, Inc. (Nasdaq:AXDX), is an in vitro diagnostics company dedicated to providing solutions for the global challenges of sepsis, antibiotic resistance and healthcare-associated infections. Every 3-4 seconds someone dies from sepsis. In the United States, sepsis remains a leading cause of death, taking more lives than HIV, breast cancer, and prostate cancer combined. Bacteria are the most common cause of the serious infections that lead to sepsis, and continue to develop resistance to antibiotics. These antibiotic resistant bacteria further complicate the treatment approach for physicians who already wait days for lab results to determine which antibiotics are likely to be effective against the infection.

The Accelerate Phenoâ„¢ system and Accelerate PhenoTestâ„¢ BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for these infections. The FDA cleared system and kit fully automate the sample preparation steps to report phenotypic antibiotic susceptibility results within 7 hours direct from positive blood cultures. Recent external studies indicate the solution offers results 1-2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient days earlier.

The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and "ACCELERATE PHENOTEST" and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.

For more information about the company, its products or technology, visit axdx.com.

Forward-Looking Statements

Certain of the statements made in this press release are forward looking, such as those, among others, about our projections as to when certain key business milestones may be achieved, the potential of our products or technology, the growth of the market, our estimates as to the size of our market opportunity and potential pricing, our competitive position and estimates of time reduction to results, and our future development plans and growth strategy. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics is contained in the section captioned "Risk Factors" in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 1, 2018, and in any other reports that we file with the Securities and Exchange Commission from time to time. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.

                                        ACCELERATE DIAGNOSTICS, INC.

                                           CONDENSED CONSOLIDATED

                                                BALANCE SHEET

                                               (in thousands)


                                                       June 30,   December 31,

                                                           2018            2017
                                                           ----            ----

                                                      Unaudited

                                                   ASSETS

    Current assets:

    Cash and cash
     equivalents                                                       $66,810              $28,513

    Investments                                         130,594                     80,648

    Trade accounts
     receivable                                           1,823                      1,946

    Inventory                                            11,317                      8,063

    Prepaid expenses                                      1,421                        850

    Other current
     assets                                                 643                        468
                                                            ---                        ---

    Total current
     assets                                             212,608                    120,488

    Property and
     equipment, net                                       5,443                      4,890

    Intellectual
     property, net                                          124                        134

    Other non-current
     assets                                                  78                          -

    Total assets                                                      $218,253             $125,512
                                                                      ========             ========


                                    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:

    Accounts payable                                                    $2,355               $2,080

    Accrued liabilities                                   5,302                      3,636

    Deferred revenue
     and income                                             185                      1,071

    Total current
     liabilities                                          7,842                      6,787

    Other long term
     liabilities                                             26                         21

    Convertible notes                                   115,499                          -

    Total liabilities                                                 $123,367               $6,808
                                                                      ========               ======


    Commitments and contingencies


    Stockholders' equity:

    Preferred shares, $0.001 par value;

    5,000,000 preferred
     shares authorized
     and none
     outstanding as of
     June 30, 2018 and
     December 31, 2017                                        -                         -

    Common stock, $0.001 par value;

    75,000,000 common
     shares authorized                        December 31, 2017
     with 54,090,575
     shares issued and
     outstanding on
     June 30, 2018 and
     75,000,000
     authorized with
     55,673,810 shares
     issued and
     outstanding on                                          54                         56

    Contributed capital                                 426,091                    360,620

    Treasury Stock                                     (45,067)                         -

    Accumulated deficit                               (286,058)                 (241,972)

    Accumulated other
     comprehensive loss                                   (134)                         -

    Total stockholders'
     equity                                              94,886                    118,704
                                                         ------                    -------

    Total liabilities
     and stockholders'
     equity                                                           $218,253             $125,512
                                                                      ========             ========

 

                                                         ACCELERATE DIAGNOSTICS, INC.

                                                            CONDENSED CONSOLIDATED

                                                STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                                                                   Unaudited

                                                     (in thousands, except per share data)


                                       Three Months Ended                           Six Months Ended

                              June 30,   June 30,                 June 30,    June 30,

                                  2018        2017                      2018         2017
                                  ----        ----                      ----         ----

    Net sales                              $1,692                                  $699                              $2,493       $1,230


    Cost of sales                  717                     135                                 1,210         161


    Gross profit                   975                     564                                 1,283       1,069


    Costs and expenses:

    Research and development     6,060                   5,527                                12,842       9,815

    Sales, general and
     administrative             15,330                  11,460                                29,682      21,988


    Total costs and expenses    21,390                  16,987                                42,524      31,803
                                ------                  ------                                ------      ------


    Loss from operations      (20,415)               (16,423)                             (41,241)   (30,734)


    Other income (expense):

    Interest expense           (3,205)                      -                              (3,363)          -

    Foreign currency exchange
     (loss)                      (253)                    (7)                                (198)       (33)

    Interest income                774                     153                                 1,075         290

    Other expense, net            (25)                    (5)                                 (25)        (5)
                                   ---                     ---                                   ---         ---

    Total other income
     (expense), net            (2,709)                    141                               (2,511)        252
                                ------                     ---                                ------         ---


    Net loss before income
     taxes                    (23,124)               (16,282)                             (43,752)   (30,482)

    Provision for income
     taxes                       (101)                  (175)                                (285)      (175)


    Net loss                            $(23,225)                            $(16,457)                          $(44,037)   $(30,657)
                                         ========                              ========                            ========     ========


    Basic and diluted net
     loss per share                       $(0.43)                              $(0.31)                            $(0.80)     $(0.58)

    Weighted average shares
     outstanding                54,003                  53,568                                54,821      52,732


    Other comprehensive loss:

    Net loss                            $(23,225)                            $(16,457)                          $(44,037)   $(30,657)

    Net unrealized (loss)
     gain on available-for-
     sale investments              (2)                      3                                  (55)          3

    Foreign currency
     translation adjustment      (191)                    204                                  (79)        204
                                  ----                     ---                                   ---         ---

    Comprehensive loss                  $(23,418)                            $(16,250)                          $(44,171)   $(30,450)
                                         ========                              ========                            ========     ========

 

                                         ACCELERATE DIAGNOSTICS, INC.

                                            CONDENSED CONSOLIDATED

                                           STATEMENTS OF CASH FLOWS

                                                   Unaudited

                                                (in thousands)


                                                                 Six Months Ended

                                                     June 30,    June 30,

                                                         2018         2017
                                                         ----         ----

    Cash flows from operating activities:

    Net loss                                                    $(44,037)              $(30,657)

    Adjustments to reconcile net loss to
     net cash used in operating
     activities:

    Depreciation                                        1,072                    1,045

    Amortization of
     intangible assets                                     10                        6

    Amortization of
     investment
     discount                                           (146)                     219

    Equity-based
     compensation                                       9,011                    7,450

    Amortization of
     debt discount and
     issuance costs                                     2,273                        -

    Loss on disposal of
     property and
     equipment                                            266                        5

    (Increase) decrease in assets:

    Accounts receivable                                   123                    (648)

    Inventory                                         (3,138)                 (5,537)

    Prepaid expense and
     other                                              (444)                   (624)

    Other current
     assets                                             (175)                   (313)

    Other non-current
     assets                                              (78)                       -

    Increase (decrease) in liabilities:

    Accounts payable                                      206                      528

    Accrued liabilities                                   661                      392

    Accrued Interest                                    1,105                        -

    Deferred revenue
     and income                                         (935)                      43

    Deferred
     compensation                                           5                        -
                                                          ---                      ---

    Net cash used in
     operating
     activities                                      (34,221)                (28,091)

    Cash flows from investing activities:

    Purchases of
     equipment                                        (1,898)                 (1,643)

    Purchases of
     available-for-
     sale securities                                 (91,272)                (39,342)

    Sales of available-
     for-sale
     securities                                         3,000                    6,522

    Maturity of
     available-for-
     sale securities                                   38,272                   18,449
                                                       ------                   ------

    Net cash used in
     investing
     activities                                      (51,898)                (16,014)

    Cash flows from financing activities:

    Issuance of common
     stock net of
     issuance costs                                       276                   83,854

    Exercise of options
     and warrants                                       2,757                    3,418

    Proceeds from
     issuance of
     convertible note                                 171,499                        -

    Prepayment of
     forward stock
     repurchase
     transaction                                     (45,069)                       -

    Payment of debt
     issuance costs                                   (4,991)                       -
                                                       ------                      ---

    Net cash provided
     by financing
     activities                                       124,472                   87,272


    Effect of exchange
     rate on cash:                                       (56)                     198


    Increase in cash
     and cash
     equivalents                                       38,297                   43,365

    Cash and cash
     equivalents,
     beginning of
     period                                            28,513                   19,244
                                                       ------                   ------

    Cash and cash
     equivalents, end
     of period                                                    $66,810                 $62,609
                                                                  =======                 =======

 

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SOURCE Accelerate Diagnostics

Company Codes: NASDAQ-SMALL:AXDX

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