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NanoString Technologies Releases Operating Results for Third Quarter of 2019

November 4, 2019
NanoString Technologies Releases Operating Results for Third Quarter of 2019
NanoString Technologies Releases Operating Results for Third Quarter of 2019

SEATTLE--(BUSINESS WIRE)--Nov 4, 2019--

NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, today reported financial results for the third quarter of 2019.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20191104005837/en/

GeoMx DSP featured on the cover of the September issue of the journal Clinical Cancer Research. (Photo: Business Wire)

Third Quarter Financial Highlights

“During the third quarter we achieved the seventh consecutive quarter of double-digit revenue growth in our core nCounter® business, driven by strong instrument placements and an expanded consumable portfolio,” said Brad Gray, president and CEO of NanoString. “The shipment of our first commercial GeoMx DSP instruments during the third quarter accelerated our instrument revenue growth to more than 40%, and we see positive leading indicators of GeoMx interest including record demand for our GeoMx Technology Access Program.”

Recent Business Highlights

nCounter Platform

GeoMx Digital Spatial Profiling (DSP) Platform

Leadership

Third Quarter Financial Results

Product and service revenue for the three months ended September 30, 2019 increased by 23% to $26.3 million, as compared to $21.5 million for the third quarter of 2018. Instrument revenue was $8.0 million, an increase of 48% compared to the prior year period. Consumables revenue, excluding Prosigna, was $12.7 million, an increase of 14% compared to the prior year period, with growth driven primarily by sales of our panel products. Prosigna IVD kit revenue remained flat at $2.5 million as compared to the prior year period. Service revenue was $3.1 million, an increase of 31% compared to the prior year period, reflecting continued growth in demand for our GeoMx DSP Technology Access Program and an increased number of service contracts associated with our growing installed base of nCounter instruments. Gross margin on product and service revenue was 59% compared to 57% in the prior year period, reflecting a mix shift towards our MAX and FLEX nCounter instruments as well as sales of our new GeoMx DSP instruments.

Collaboration revenue totaled $4.3 million, compared to $7.2 million for the prior year period, and was derived primarily from our collaboration with Lam Research. Cash received from collaborators totaled $4.5 million during the quarter, primarily reflecting activity relating to our collaboration with Lam Research and the remaining activities for our Celgene collaboration, which ended during the second quarter of this fiscal year.

Research and development expense increased by 2% to $17.0 million compared to $16.7 million for the prior year period, primarily due to higher stock-based compensation expense. Selling, general and administrative expense increased by 31% to $23.4 million compared to $17.8 million for the prior year period, primarily reflecting increased investment in personnel and commercial launch activities related to GeoMx DSP and higher stock-based compensation expense.

Net loss was $22.7 million, or a loss of $0.64 per share, compared with $16.5 million, or $0.56 per share, for the prior year period.

Outlook for 2019

The company updated its revenue and gross margin guidance for fiscal 2019, with results expected as follows:

The company also updated its guidance for certain operating expenses and other items. These updates reflect additional investments directed to capture demand for and support the launch of GeoMx DSP, as well as higher expected stock-based compensation expense. For the full year 2019, the company now expects:

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 (866) 211-0364 for domestic callers, or (647) 689-6861 for international callers. Please reference Conference ID 9358402. 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 November 4, 2019 at 7:30 pm ET through midnight ET on November 11, 2019. To access the replay, dial (800) 585-8367 or (416) 621-4642 and reference Conference ID: 9358402. 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 is a leading provider of life science tools for translational research and molecular diagnostic products. The company’s nCounter® Analysis System is used in life sciences research and has been cited in more than 2,800 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 GeoMx™ Digital Spatial Profiler enables highly-multiplexed spatial profiling of RNA and protein targets in a variety of sample types, including FFPE tissue sections. 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.

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 expectations for future revenue growth, the impact of new products and expansion into new markets, the company’s anticipated uses or sources of cash, the growth trajectory of the company’s nCounter and GeoMx DSP systems, the anticipated demand for new platforms, the anticipated benefits of the company’s collaboration relationships, the timing of development funding and the company’s estimated 2019 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 logo, NanoString, NanoString Technologies, GeoMx, Hyb & Seq, nCounter and Prosigna are registered trademarks or trademarks of NanoString Technologies, Inc. in various jurisdictions. All other trademarks are the property of their respective owners. All rights reserved.

 

NANOSTRING TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2019

 

2018

 

2019

 

2018

Revenue:

 

 

 

 

 

 

 

Instruments

$

8,037

 

 

$

5,429

 

 

$

17,295

 

 

$

15,591

 

Consumables

12,736

 

 

11,140

 

 

36,656

 

 

30,778

 

In vitro diagnostic kits

2,517

 

 

2,547

 

 

7,445

 

 

7,234

 

Services

3,059

 

 

2,337

 

 

8,673

 

 

6,279

 

Total product and service revenue

26,349

 

 

21,453

 

 

70,069

 

 

59,882

 

Collaboration

4,255

 

 

7,163

 

 

18,568

 

 

16,818

 

Total revenue

30,604

 

 

28,616

 

 

88,637

 

 

76,700

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of product and service revenue

10,925

 

 

9,291

 

 

29,239

 

 

25,538

 

Research and development

17,007

 

 

16,651

 

 

50,063

 

 

45,068

 

Selling, general and administrative

23,382

 

 

17,810

 

 

69,317

 

 

57,897

 

Total costs and expenses (a) (b)

51,314

 

 

43,752

 

 

148,619

 

 

128,503

 

Loss from operations

(20,710

)

 

(15,136

)

 

(59,982

)

 

(51,803

)

Other income (expense):

 

 

 

 

 

 

 

Interest income

763

 

 

384

 

 

2,114

 

 

826

 

Interest expense

(2,415

)

 

(1,631

)

 

(6,052

)

 

(4,798

)

Other expense, net

(322

)

 

(46

)

 

(552

)

 

(330

)

Total other expense, net

(1,974

)

 

(1,293

)

 

(4,490

)

 

(4,302

)

Net loss before provision for income taxes

(22,684

)

 

(16,429

)

 

(64,472

)

 

(56,105

)

Provision for income taxes

(64

)

 

(57

)

 

(211

)

 

(185

)

Net loss

$

(22,748

)

 

$

(16,486

)

 

$

(64,683

)

 

$

(56,290

)

Net loss per share, basic and diluted

$

(0.64

)

 

$

(0.56

)

 

$

(1.90

)

 

$

(2.09

)

Shares used in calculating basic and diluted net loss per share

35,576

 

 

29,366

 

 

34,121

 

 

26,882

 

(a) Includes $4.7 million and $2.8 million of stock-based compensation expense for the three months ended September 30, 2019 and 2018, respectively, and $12.7 million and $8.7 million for the nine months ended September 30, 2019 and 2018, respectively.

(b) Includes $1.2 million and $1.0 million of depreciation and amortization expense for the three months ended September 30, 2019 and 2018, respectively, and $3.6 million and $3.0 million for the nine months ended September 30, 2019 and 2018, respectively.

NANOSTRING TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

September 30,

 

December 31,

 

2019

 

2018

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

23,442

 

 

$

24,356

 

Short-term investments

105,423

 

 

69,641

 

Accounts receivable, net

19,542

 

 

17,279

 

Inventory, net

19,040

 

 

13,173

 

Prepaid expenses and other

10,877

 

 

7,258

 

Total current assets

178,324

 

 

131,707

 

Property and equipment, net

14,863

 

 

15,171

 

Operating lease right-of-use assets

25,344

 

 

 

Other assets

2,228

 

 

680

 

Total assets

$

220,759

 

 

$

147,558

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

6,724

 

 

$

8,636

 

Accrued liabilities

5,632

 

 

3,705

 

Accrued compensation and other employee benefits

10,774

 

 

12,060

 

Customer deposits

6,462

 

 

8,167

 

Deferred revenue, current portion

4,389

 

 

9,890

 

Deferred rent, current portion

 

 

657

 

Operating lease liabilities, current portion

3,690

 

 

 

Total current liabilities

37,671

 

 

43,115

 

Deferred revenue, net of current portion

876

 

 

1,620

 

Deferred rent and other long-term liabilities, net of current portion

246

 

 

7,558

 

Long-term debt, net of discounts

79,194

 

 

58,396

 

Operating lease liabilities, net of current portion

30,183

 

 

 

Total liabilities

148,170

 

 

110,689

 

Total stockholders’ equity

72,589

 

 

36,869

 

Total liabilities and stockholders’ equity

$

220,759

 

 

$

147,558

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191104005837/en/

CONTACT: Doug Farrell

Vice President, Investor Relations & Corporate Communications

dfarrell@nanostring.com

Phone: 206-602-1768

KEYWORD: WASHINGTON UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: ONCOLOGY HEALTH GENETICS RESEARCH SCIENCE BIOTECHNOLOGY

SOURCE: NanoString Technologies, Inc.

Copyright Business Wire 2019.

PUB: 11/04/2019 04:01 PM/DISC: 11/04/2019 04:01 PM

http://www.businesswire.com/news/home/20191104005837/en