NEW YORK (360Dx) – Accelerate Diagnostics reported after the close of the market on Wednesday that its preliminary first quarter revenues increased 325 percent year over year to $530,000 from $163,000 in the prior-year quarter.
The figure would miss the average analysts' estimate of $742,000 in revenues, however.
The increase was driven by capital sales of the Accelerate Pheno system in the US and sales of the Accelerate PhenoTest BC kit across the US and Europe, the firm said.
Accelerate President and CEO Lawrence Mehren said in a statement that early sales momentum following the US Food and Drug Administration clearance of the firm's test system and kit in February "confirms the need for faster, more complete answers in the fight for life against serious infections.”
“While there is more work to be done, we believe the initial uptake of the system sets us apart from recent IVD launches in microbiology,” he added.
On a conference call with analysts following the release of the earnings, Mehren said that this had been the firm's first quarter with full commercial teams and clearances in both the US and the EU.
In the EU, "our team has delivered evaluation contracts covering 100 instruments, and it has converted an additional six systems to placements," he said, adding that, "These six systems were contracted as reagent rentals and at attractive prices, and are now actively running patient samples in routine clinical practice."
In North America, since receiving regulatory clearance, the firm has engaged with customers to ink evaluation contracts for 69 instruments, and it "converted an additional 16 into placements," Mehren said, adding that the contracts exclude "a large number" of early-access program study sites and former clinical study sites that are "being moved to evaluation contracts."
Evaluation contracts in the US, he said, "requires the commitment of the lab to complete their verification study to meet CAP-CLIA requirements as part of their evaluation. Upon satisfactory completion of the study, these accounts then proceed on to acquisition and placement," a commercial tactic that ensures that "the accounts are well qualified for conversion prior to the instruments being installed."
He noted that each of the evaluation contracts signed to date covers multiple modules per site. He said that preliminary data presented at the International Symposium on Intensive Care and Emergency Medicine in March demonstrated that "Accelerate Pheno reduced the time to appropriate antibiotic therapy by 36 hours for those receiving ineffective regimens," and that the study showed that antibiotic de-escalation could have occurred 41 hours sooner.
Mehren said that the firm intends to publish this and other studies in peer-reviewed journals "to provide additional tailwinds" for its commercial initiatives.
The firm is "eagerly awaiting data on reagent pull-through" that it expects will confirm its expectations for the launch, "though it is too early to tell," he added.
The firm also said that the Union des Groupements d’Achats Publics, the largest public hospital purchasing group in France, has awarded it a public tender certification to supply its solution, which allows all French public hospitals to acquire the system without additional tenders. Accelerate did not disclose the terms of the tender.
The firm reported that in Q1, it secured customer evaluation contracts covering 169 instruments, and that 22 additional instruments converted into revenue-generating placements, for a total of 191 instruments under contract at the end of the first quarter.
Evaluation contracts allow a customer to evaluate the system with the intent of purchasing it if performance meets expectations, Mehren said, adding that, placements are installed "on revenue-generating modules whose contracts have converted from evaluations to commercial agreements."
For the three months ended March 31, 2017, Accelerate anticipates a net loss of $14.2 million, or $.27 per share, which would beat the average analysts’ estimate of a loss of $.34 per share.
A year ago, the company reported a net loss of $15.1 million, or $.29 per share.
Its preliminary R&D costs for Q1 2017 are expected to drop 44 percent to $4.3 million from $7.7 million, and its preliminary SG&A expenses are anticipated to increase 36 percent to $10.5 million from $7.7 million in Q1 2016.
Accelerate expects to report $63.9 million in cash, cash equivalents, and short-term investments as of the end of the quarter.
The firm said that it anticipates it will report full financial results for Q1 on May 5th in a document filed with the US Securities and Exchange Commission.
Accelerate's shares were up almost 3 percent to $28.20 in early morning trade on the Nasdaq.