NEW YORK – Antibiotic resistance testing company Accelerate Diagnostics said after the close of the market on Tuesday that its fourth quarter revenues fell 11 percent year over year.
For the three months ended Dec. 31, 2020, the company posted revenues of $3.1 million compared to $3.5 million for Q4 2019, which missed analysts' average estimate of $4.1 million.
Its fourth quarter revenues were down year over year because of an international capital deal in the fourth quarter of 2019 that did not repeat in the current year, the firm said.
Accelerate added 21 contracted instruments in Q4 and brought 45 instruments live in the US. It ended the quarter with 268 revenue-generating instruments that were live in the US, and had an additional 133 Pheno instruments contracted in the US that had not yet gone live.
Over the course of 2020, Accelerate's execution of its go-live process, by which its customers initiate clinical use of its instruments, "drove a material increase in our live instruments in the fourth quarter and led to a 63 percent increase in our revenue-generating installed base during the year," Jack Phillips, the firm's CEO, said in a statement. "We also saw modest improvements in the demand environment during the quarter, although new instrument placements continued to be challenged due to pandemic-related headwinds, including limited sales force access to potential customer sites and hospital decision makers' strong focus on COVID-19."
On a conference call to discuss the firm's financial results, Phillips said that the company is seeing "growing interest in the upcoming Pheno product extension launches and [is] adding new prospects to the sales funnel as a result."
Its strategy is to "aggressively grow market share, thereby establishing rapid [antimicrobial susceptibility testing] as a trusted clinical standard and then significantly expand our available market by adding new geographies, partnerships, and launching Pheno 2.0," he said.
In 2021, the firm plans to deploy two new testing platforms, PhenoAST and PhenoPrep, and in 2023, to begin marketing Pheno 2.0, its next-generation ID/AST system that includes not only blood, but also isolates derived from different types of testing samples, urine, and other specimens as a basis for testing patients with infectious diseases.
Phillips added that Accelerate achieved many of the product development milestones it had established at the beginning of 2020 and made progress with new development programs to advance its new product strategy. "We launched software updates in the third quarter, which … enhanced performance in several key areas," he said. "We achieved feasibility and progressed development of PhenoAST and PhenoPrep, and we completed a key feasibility milestone for Pheno 2.0, where a new prototype delivered rapid and accurate AST results for a predetermined set of [challenging cases]."
Phillips noted that in 2020, the company downsized operations in the Europe, Middle East, and Africa (EMEA) region to focus its commercial efforts and reduce costs. "This geographical targeting enabled us to reduce the size of our EMEA operations by half and prioritize growing our annuity stream and number of customers in southern Europe and the Middle East, where the challenge of antibiotic resistance is the greatest," he said. In China, Accelerate made progress with the first phase of a clinical trial required to obtain approval to access the Chinese market, he added.
Phillips said that the company's business suffered somewhat this past year because "nearly every aspect … was impacted by the pandemic in 2020 as our lab and clinical stakeholders in infectious disease had to onboard unprecedented volumes of new COVID testing as a matter of national priority."
Accelerate believes these challenges are likely to continue through at least the first half of this year and did not provide guidance for 2021 revenues because of uncertainty associated with the pandemic.
In Q4, Accelerate's R&D expenses fell 18 percent to $5.1 million from $6.2 million in the prior-year quarter. The decrease was the result of increased efficiencies and reduced expenses for external studies, the firm said.
Its SG&A costs also fell 18 percent year over year to $11.2 million from $13.6 million, a decrease that was driven by pandemic-related reductions in sales and marketing expenses related to travel and trade shows.
The company recorded a net loss for the quarter of $18.9 million, or $.33 per share, compared to a net loss of $21.3 million, or $.39 per share, in Q4 2019, and missed the consensus Wall Street estimate of a loss of $.32 per share.
Accelerate's full-year 2020 revenues rose 20 percent to $11.2 million from $9.3 million in 2019, and missed analysts' average estimate of $12.2 million.
In 2020, the firm's R&D costs decreased 16 percent to $21.3 million from $25.4 million in 2019. Its SG&A expenses fell 10 percent to $46.9 million compared to $51.9 million in 2019.
Accelerate reported a full-year 2020 net loss of $78.2 million, or $1.40 per share, compared to a net loss of $84.3 million, or $1.55 per share, in full-year 2019, missing the analysts' average estimate for a net loss of $1.39.
The firm finished 2020 with $35.8 million in cash and cash equivalents and $32.5 million in investments.
In a research note on Wednesday, William Blair analyst Brian Weinstein said the investment bank remains "optimistic on the outlook at Accelerate and believes future growth will be aided by [its] expanding product menu. This should enable the company to begin to take more share in the laboratory, and over time, begin to sell ancillary products that can drive even higher revenue."
Shares of Accelerate were up more than 2 percent to $11.44 in early Wednesday morning trading on the Nasdaq.