NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market Wednesday that its revenues for the fourth quarter of 2017 rose 40 percent year over year.
For the three months ended Dec. 31, 2017, total revenues grew to $35.2 million from $25.2 million in Q4 2016, beating the average Wall Street estimate of $31.3 million.
“We demonstrated solid commercial execution in the fourth quarter, generating a sequential improvement of more than 20 percent in our product and service revenue and achieving record consumable sales,” said Brad Gray, president and chief executive officer of NanoString, in a statement. “We believe that we’re well positioned to accelerate our revenue growth over the course of 2018," he added.
Despite the overall growth, NanoString's Q4 instrument revenues declined 21 percent year-over-year to $5.9 million from $7.5 million, which continued a trend seen in Q3 2017 when the firm's instrument, as well as consumables sales, were also soft. Gray attributed some of NanoString's struggles in Q3 2017 to reduced and delayed sales of its Sprint instrument but said he believed the company could turn this around with a maturing of its newly realigned sales force.
In Q4, NanoString said that nCounter SPRINT systems represented approximately half of its systems sold.
"During 2017, we suffered growing pains, when challenges in our base nCounter business resulted in lower revenue during the third quarter as we waited for a number of personnel, organizational and process changes to have an impact," Gray said during a call with investors discussing the company's earnings.
However, he added, "In the fourth quarter, we began to stabilize our business, as the number of these changes began to bear fruit."
Total consumables revenue for the recently completed quarter rose 11 percent year-over-year to $13.3 million from $12.0 million. Excluding Prosigna, consumables brought in $11.5 million, 5 percent more than $11.0 in the year-ago period. Prosigna IVD kit revenue was $1.8 million for the quarter, up 80 percent from $1.0 million during Q4 2016.
Collaboration revenues for Q4 2017 were up almost threefold year over year to $14.2 million from $4.9 million, and services revenues more than doubled to $1.8 million from $866,000.
NanoString's net loss for the quarter was $8.8 million, or $.34 per share, down from a net loss of $11.6 million, or $.55 per share in Q4 2017. Wall Street analysts had estimated, on average, a net loss of $.42 per share.
NanoString's R&D spending jumped 37 percent to $13.7 million, up from $10 million in 2016, driven primarily by increased costs associated with development of NanoString's Hyb & Seq sequencing platform. Its SG&A spending rose 18 percent to $19.7 million from $16.7 million in the prior-year period, an increase that the company said reflects investments made to its commercial team during 2017.
Among recent business highlights, NanoString said that it presented the first collaborative data demonstrating the potential utility of its Hyb & Seq platform in infectious disease and oncology applications, and shared new technical advances that have the potential to increase throughput by twenty-fivefold.
For full-year 2017, NanoString reported that its revenues rose 33 percent to $114.9 million from $86.5 million in 2016, beating the analysts' consensus estimates of $111.7 million, and in line with preliminary figures that the company reported in January.
Instrument revenues fell 14 percent over the full year to $20.8 million from $24.2 million in 2016, while consumables revenue were up 8 percent to $45.1 million compared to $41.7 million in 2016.
Overall, the company said it grew its installed base to approximately 605 nCounter systems as of December 31, with approximately 125 systems sold during the year, including approximately 54 Sprint profilers.
Prosigna revenues rose 60 percent to $6.7 million from $4.2 million in 2016. Remaining consumables brought in $38.3 million, a 2 percent increase from $37.5 million the prior year.
The company's collaboration revenues rose sharply to $42.9 million from $17.4 million in the prior year., and services revenues grew 91 percent to $6.1 million from $3.2 million
NanoString's 2017 net loss shrank to $43.6 million, or $1.84 per share, compared to $47.1 million, or $2.34 per share, in 2016. On average, Wall Street analysts had expected a net loss of $1.90 per share for the year.
The firm's R&D spending increased 35 percent to $46.9 million from $34.7 million in 2016. SG&A spending rose 19 percent to $74.3 million from $62.7 million.
NanoString ended the year with $26.1 million in cash and cash equivalents, and $51.4 million in short-term investments.
For 2018, the company said it expects total revenues of $100 million to $105 million, and a net loss of $2.60 to $2.90 per share.
According to Gray, the primary focus for NanoString in the year ahead is growing its core nCounter business in the oncology field by supporting continued adoption of existing panels, and by launching new consumables over the course of the year that could also facilitate new companion diagnostic collaborations.
The company will also be working to drive nCounter into research in new therapeutic areas outside of oncology, including immunology, and neurology, he said.