NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market today that its third quarter revenues were up about 6 percent year over year.
For the three months ended Sept. 30, NanoString's revenues increased to $28.6 million from $27.0 million in Q3 2017, beating the Wall Street estimate of $26.2 million.
The firm said it took in $21.5 million in product and service revenue in the quarter, a 27 percent increase from $16.9 million in Q3 2017.
Excluding the firm's Prosigna breast cancer assay, consumables revenue was $11.1 million, a 23 percent increase from $9.0 million a year ago. Â Revenue from the Prosigna IVD was up 47 percent to $2.5 million from $1.7 million in Q3 2017.
NanoString President and CEO Brad Gray said during the company's earnings call that the quarter was the strongest yet for Prosigna.
"We expect to continue to benefit from positive health technology assessments," he added, including a finalization of the NICE draft in the UK, which has included Prosigna as a recommended test and is scheduled for December.
Meanwhile, the company's oncology consumables, in general, represent about 60 percent of its overall consumables business as the firm works to build a customer base in new areas like immunology and neurology.
Instrument revenue rose 22 percent to $5.4 million from $4.4 million in the prior year's quarter, and the firm said it increased its installed base to 695 nCounter analyzers from about 570 a year ago.
Gray said during the earnings call that solid demand from biopharma customers drove about half of the instrument revenue, and that sales of the nCounter Sprint Profiler platform made up about 45 percent of the overall sales.
Collaboration revenue was $7.2 million, down from $10.1 million in the same period last year. And service revenue was $2.3 million, representing 33 percent year-over-year growth.
According to Gray, NanoString is seeing multiple indicators of a strong 2019 launch of its GeoMx Digital Spatial Profiler, buoyed by high demand for its technology access program, an oversold early-access beta instrument opportunity, and strong interest in its priority site offering.
He also highlighted recent publications in Nature Medicine demonstrating the utility of the DSP.
Among other recent milestones, the company said that a record number of nCounter-related abstracts were presented at this week's Society of Immunotherapy of Cancer (SITC) annual meeting. The company also launched a new panel for characterizing CAR T-Cells this week.
"We will begin shipping in Q4, but we don’t expect a material contribution [to revenue] right at the outset," Gray said. "What we hope will happen is that some of the 100-odd companies developing CAR T therapies would incorporate it into their process in the long run."
Last month, NanoString also entered into a translational research collaboration with MacroGenics in which it is using its PanCancer IO36 Panel to explore predictive biomarker signatures for MacroGenics’ checkpoint inhibitor product candidate MGD013. Gray said during the call that the initial efforts will be exploratory, looking at retrospective samples from the company's early studies, so it won't be clear if there is a path to a companion diagnostic until that part of the collaboration is complete in about a year.
Finally, investigators presented data on the firm's anticipated Hyb & Seq platform at the annual meeting of the Association for Molecular Pathology last week, highlighting its potential in rapid pathogen detection and antibiotic susceptibility testing.
Nanostring's Q3 net loss was $16.5 million, or $0.56 per share, compared to $11.4 million, or $0.45 per share for the third quarter of 2017. Analysts, on average, had anticipated a loss per share of $0.57.
NanoString's quarterly R&D expenses rose more than 46 percent to $16.7 million from $11.4 million. Its SG&A costs dropped 3 percent to $17.8 million from $18.4 million.
In October, NanoString amended and restated its term loan facility with the Capital Royalty Group (CRG). The amended facility permits aggregate borrowings of up to $100 million, with $60 million drawn at close.
The firm finished the quarter with $21.2 million in cash and cash equivalents, and $73.7 million in short-term investments.
The company updated its guidance for fiscal year 2018 to project service revenue of $82 million to $83 million from a previous guidance of $79 million to $81 million; total revenue of $104 million to $106 million, unchanged from previous guidance; net loss of $70 million to $73 million, compared to a previous guidance of $68 million to $72 million; and net loss per share of $2.50 to $2.60, compared to previous guidance of $2.50 to $2.70.