Bio-Techne's Fiscal Q3 Revenues Rise 13 Percent

NEW YORK (GenomeWeb) – Bio-Techne said today that its 2019 fiscal third quarter revenues rose 13 percent year over year, driven by double-digit organic growth in North America, Europe, and China.

For the three months ended March 31, 2019 the Minneapolis, Minnesota-based firm said revenues rose to $184.9 million year over year from $164.0 million, beating analysts' average estimate of $182.9 million.

In Q3, the firm's Diagnostics and Genomics segment revenues were $47.1 million, up 15 percent year over year from $40.9 million, driven by growth in Advanced Cell Diagnostics' RNAscope product sales. Bio-Techne's Protein Sciences segment revenues were $137.9 million, up 12 percent from $123.2 million in the prior-year quarter.

The firm's Diagnostics and Genomics business grew 13 percent organically, while its Protein Sciences segment grew 15 percent organically.

Bio-Techne CEO and President Chuck Kummeth said in a statement that all of its businesses performed well in fiscal Q3, with growth driven in part by sales from its antibody portfolio and Simple Western instruments.

He added that overall results so far this year set up Bio-Techne for the potential of a first full fiscal year of double-digit organic growth.

On a conference call to discuss Bio-Techne's financial performance, Kummeth noted that the National Comprehensive Cancer Network (NCCN) in January included its Exosome Diagnostics EPI assay in the clinical practice guidelines in oncology for prostate cancer early detection. The updated treatment algorithm includes EPI testing prior to a first prostate biopsy or after a negative biopsy. The assay could be used to assist patients and urologists in further defining the probability of high-grade cancer and in reaching a joint decision to either proceed with a prostate biopsy or continue monitoring.

Since its inclusion in the NCCN guidelines, "EPI has continued to gain acceptance among urologists throughout the country," Kummeth said. More than 4,600 EPI tests were performed in Q3, a 14 percent increase over Q2, for more than 1,600 ordering physicians.

The "level of enthusiasm by the urology community and NCCN guideline inclusion continues to give us confidence that EPI will be added to the NGS local coverage determination for Medicare reimbursement," he said.

The Exosome Dx team continues to make progress with non-Medicare payor coverage, Kummeth said. "They have contracts with 25 regional, commercial, and PPO networks nationwide and have Medicaid rolled out in more than 30 states. The next big gating item that will enable us to contract with large nationwide insurance payors is to receive New York State certification of our CLIA lab in Massachusetts." 

In March, Bio-Techne and NanoString Technologies announced that they are partnering to create a workflow for spatial genomics research uniting Bio-Techne's RNAscope reagent portfolio with NanoString's GeoMx RNA assays and digital spatial profiling instrument.

"The combined workflow that unites the RNAscope reagent portfolio from Bio-Techne with Nanostring's GeoMx RNA assays enables researchers to molecularly guide their high-plex spatial analysis with single-cell resolution," Kummeth said on the conference call. "The combination will be the basis of an ongoing partnership which is aimed at further integration of these platforms into one concise workflow, extending spatial genomics applications from basic research to translational and clinical applications."

Kummeth noted that in February, Bio-Techne announced a strategic agreement with China's Lisen Imprinting Diagnostics Wuxi in the field of precision medicine.

The collaboration with Lisen is advancing "the use of the RNAscope platform for China's precision diagnostics initiatives, which will help the two [firms] to accelerate the development of molecular diagnostics in the Chinese market, and to generally promote the benefits of precision medicine as a result of more accurate diagnostics," Kummeth said.

Bio-Techne's net income in Q3 was $44.7 million, or $1.15 per share, compared to $19.7 million, or $0.52 per share, in the prior year. The firm reported adjusted net income of $47.1 million, or $1.21 per share, beating analysts' average estimate of $1.14.

The company noted that its Diagnostics and Genomics business operating margin was down compared to the prior year because of the acquisition of Exosome Diagnostics, which it purchased for up to $575 million last August 2018.

Bio-Techne's R&D expenses rose 12 percent to $15.6 million from $13.9 million in Q3 2018, and its SG&A expenses rose 22 percent to $65.0 million from $53.3 million in the prior-year quarter. 

At the end of Q3, the firm had $95.6 million in cash and cash equivalents and $83.2 million in short-term available-for-sale investments. 

It announced a dividend of $0.32 per share for the quarter ended March 31, payable May 24 to common shareholders of record on May 10.

In morning trading on the Nasdaq, Bio-Techne's shares were up 1 percent at $198.52.