NEW YORK (360Dx) – Accelerate Diagnostics said after the close of the market on Tuesday that its fourth quarter revenues decreased 17 percent year over year.
For the three months ended Dec. 31, 2018, the company posted revenues of $1.8 million compared to $2.1 million in revenues for Q4 2017. The Q4 revenues were in line with the company's preliminary figures announced last month but fell short of the consensus Wall Street estimate of $2.6 million.
The firm said that the Q4 2018 revenue decline resulted from a lower capital sales mix. Specifically, nearly all of the US commercial contracts in Q4 2018 were placed under a reagent rental option that was not available in the prior-year period, according to Accelerate.
It added that during the recently completed quarter, it added 133 commercially contracted instruments, compared to 22 in the fourth quarter of 2017, the latter being instrument sales and the former a mix of sales and reagent rentals.
In a conference call following the release of the financial results, Accelerate CEO Lawrence Mehren said that the uptick in the rate of commercial placements during the fourth quarter is "putting the company on a positive trajectory as we move into 2019 and beyond."
The firm also concluded its conversations with the US Food and Drug Administration regarding the use of a non-standard comparator test for its pneumonia assay, Mehren said, and Accelerate will now conduct its clinical trial for the pneumonia assay, with a 510(k) submission leveraging the existing blood-based product as a reference.
Accelerate's R&D expenses for the quarter rose 13 percent year over year to $6.9 million from $6.1 million in Q4 2017, which the company attributed to continued investments in clinical outcomes studies and costs to prepare for FDA registration, and outcomes studies of the respiratory test. Its SG&A costs rose 17 percent to $13.4 million from $11.5 million, driven by expansion of the US sales team and costs related to increased global sales and marketing activity.
Accelerate recorded a net loss for the quarter of $22 million, or $.41 per share, matching the consensus Wall Street estimate.
For full-year 2018, Accelerate reported revenues rose 36 percent to $5.7 million from $4.2 million in 2017, which missed the analysts' average estimate of $6.1 million.
The firm contracted 202 Pheno systems in the year, compared to 78 in 2017, with approximately 25 percent of the systems being purchased outright, CFO Steve Reichling said on the call. "The balance were placed under reagent rental agreements and will generate consumable revenue, inclusive of an upcharge for the value of the instrument," he added.
The firm's R&D costs rose 24 percent to $27.6 million in 2018 from $22.3 million in 2017 due to continued investment in clinical outcomes studies and costs for FDA registration and outcomes studies. For 2018, its SG&A expenses rose 22 percent to $55.2 million compared to $45.1 million in 2017 due to US sales team expansion and global sales and marketing activity.
Accelerate reported a net loss of $88.3 million, or $1.62 per share, matching the analysts' average estimate. In 2017, the company reported a net loss of $64.0 million, or $1.18 per share.
Accelerate finished 2018 with $66.3 million in cash and cash equivalents.
For 2019, the firm is targeting 300 to 400 new instrument placements. It will continue to support this effort by investing in clinical studies, Mehren noted. "We believe this outcomes data will continue to demonstrate our unique clinical and economic impact for acquiring hospitals," he said.