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Accelerate Diagnostics Q3 Revenues Up 57 Percent

NEW YORK – Accelerate Diagnostics reported after the close of the market on Thursday that its third quarter revenues increased 57 percent year over year.

For the three months ended Sept. 30, the Tucson, Arizona-based firm posted revenues of $3.6 million, up from $2.3 million in the prior year, and above the consensus Wall Street estimate of $3.3 million.

"Consumable revenue from our existing base of live Pheno instruments proved durable during the third quarter and were boosted by improvement in our go-live cadence," CEO Jack Phillips said on a conference call to recap the earnings. The firm's results also benefitted from a multi-hospital US instrument sale and contract secured during the quarter, he said, but "limited hospital access and competing pandemic-related priorities for the microbiology lab continued to impact new contracts in the third quarter." 

The firm added five contracted instruments in the quarter and brought 22 instruments live, as in fully installed and validated to run patient samples, in the US. It currently has 223 revenue-generating instruments, Phillips said on the call. It also has 192 instruments that are in contract but have not yet completed the installation and validation process.

After declines in April and May, the third quarter was marked by "robust and predictable consumable sales to our existing customer base that were in line with our expectations for annuity per installed unit," Phillips said.

While some parts of the US saw the highest levels of new COVID cases during the quarter, "positive blood culture testing remained stable," he said, attributing this development to the establishment of new patient management protocols in hospitals. "This leaves us cautiously optimistic that our existing customer base will remain resilient to any future waves of COVID incidence," he added. 

In the quarter, Accelerate received 510k approval for a suite of product enhancements to the Accelerate Pheno system, designed to improve performance and expand Pheno's antimicrobial susceptibility testing menu for bloodstream infections. It also received Emergency Use Authorization from the US Food and Drug Administration for the MS Fast fully automated chemiluminescence immunoassay analyzer and SARS-CoV-2 serological tests for the detection of IgG and IgM antibodies against the virus.

Regarding the latter, Phillips said that the firm is building a sales funnel for the platform but acknowledged that the clinical role of SARS-CoV-2 antibody testing remains to be seen. "With our EUA in hand and the supply chain poised, we are ready if and when the clinical use case is established," he said.

Accelerate also received a final coverage determination for the PhenoID-AST blood test. "The reimbursement is above our list price and will cover the cost of our customers when treating patients in the outpatient setting," Phillips said. However, Accelerate's new technology add-on payment (NTAP) reimbursement application was denied by the Centers for Medicare and Medicaid Services because it was determined it had been more than three years since the commercial launch of the Pheno system.

The firm had previously outlined a plan to consolidate its international business and focus on the US. Accordingly, it saw 93 percent revenue growth in the US market, Phillips said. However, it plans to launch its new Pheno AST test in Europe, the Middle East, and Asia, which he said will further improve the firm's prospects in the EMEA region. The firm is completing clinical trials in China as well, and Phillips said the firm recently hired a new head of operations in China who had formerly been head of microbiology in China for Becton Dickinson.

Accelerate expects to launch the Pheno-AST test kit and front-end Pheno-Prep systems in the first half of 2021. It is also commercializing a benchtop MALDI platform in collaboration with Ascend Diagnostics to be used with the Pheno-Prep system, Phillips said.

In addition, the firm continues to develop the Pheno 2.0 system, which will accept a broader range of sample types, including urine and isolates.

Accelerate's R&D expenses in Q3 decreased 18 percent year over year to $5.0 million from $6.1 million, while its SG&A costs declined 10 percent to $11.5 million from $12.7 million.

The company had a net loss of $18.8 million, or $.33 per share for Q3, compared to a net loss of $20.4 million, or $.37 per share, a year ago. The consensus Wall Street estimate was for a net loss per share of $.33.

Accelerate Dx finished the quarter with $27.0 million in cash and cash equivalents.