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Oxford Immunotec Q2 Revenues Increase 12 Percent on Strong TB Sales

NEW YORK (360Dx) – Oxford Immunotec reported a 12 percent year-over-year increase in second quarter revenues today, driven by strong results from its tuberculosis business.

The company also launched the CE-marked T-Cell Select kit in Europe and select other countries today, which enables the complete automation of the firm's T-SPOT.TB test.

Total revenues for the quarter were $29.3 million, up from 26.1 million last year, and beating the analyst average estimate of $28.6 million.

Product revenues were $11.7 million, up 12 percent from $10.4 million during the year-ago quarter, resulting from strong growth in Asia, Europe, and the rest of the world. Service revenues also increased 12 percent, to $17.6 million from $15.7 million last year, primarily driven by increased tuberculosis revenues in the US and the UK.

On a conference call to discuss the firm's quarterly earnings, Oxford Immunotec CEO Peter Wrighton-Smith said the firm's performance was in line with expectations, with both tuberculosis-related and tick-borne-related and other revenues "rising sharply on a sequential basis."

By disease indication, tuberculosis-related revenues were $25 million, up 17 percent from $21.3 million in Q2 of 2017, which represents "the strongest reported growth in our TB business since 2016," Wrighton-Smith said.

The company sold more than 250,000 TB tests in the US and nearly 650,000 in non-US regions, according to CFO Rick Altieri, both as kits and through its service business.

Tick-borne disease-related and other revenues were $4.4 million, down 9 percent from $4.8 million last year, "reflecting in part our decision to scale down our blood donor screening business," Wrighton-Smith said. In February, the company announced it was shutting down a project to develop a babesia blood-donor screening assay after receiving a letter from the US Food and Drug Administration asking for additional clinical testing.

Wrighton-Smith said that testing volumes in tick-borne diseases have been slow so far this year due to the harsh winter. "Nonetheless, we continue to view this area as a highly attractive market, we continue to close new customers, and we're excited to build our new Accutix brand," he said, noting the recent launch of two new tick-borne disease tests.

Revenues from the US were $17.7 million in the second quarter, up 10 percent from $16.1 million last year, driven by "strong growth in our core TB business, which resumed growth at double digits and saw the strongest growth rate in six quarters," he said.

Revenues from Europe and the rest of the world totaled $2.2 million, up 17 percent from $1.9 million in Q2 of 2017. This was driven by strong TB sales in core European markets, especially in the UK, Wrighton-Smith said.

Finally, revenues from Asia were $9.4 million, up 16 percent from $$8.1 million in last year's second quarter, due to "strong and accelerating growth across the region," he said.

"We believe there is substantial headroom for continued growth in TB, given the low current penetration of IGRAs [Interferon gamma-release assays] and all the recent positive changes in guidelines and expansion of testing programs," Wrighton-Smith said.

Growth of the TB business could be further boosted by the T-Cell Select kit the company launched today in Europe and certain other countries. The CE-marked product for the preparation of white blood cells "will simplify workflow, improve throughput, reduce hands-on time, and reduce labor costs" for the firm's T-SPOT.TB assay, he said, allowing the test to be fully automated. In addition, it will enable customers to store samples collected in standard blood tubes for up to 54 hours at room temperature prior to testing.

Wrighton-Smith said the company plans to obtain FDA clearance for T-Cell Select and launch it in the US but he declined to provide a timeline.

He also noted that the company recently presented new data for its T-SPOT.CMV assay at medical conferences, showing that the test can accurately predict CMV risk. The firm plans to publish those data later this year in peer-reviewed journals, he added.

Oxford Immunotec's R&D costs fell 14 percent to $3.4 million from $3.9 million. SG&A costs decreased 9 percent to $16.4 million from $18 million, driven by the implementation of a leaner leadership structure, reduced stock compensation, and lower legal costs because of the successful outcome of patent litigation, the firm said.

The company posted a net loss of $6.5 million, or $.25 per share, for Q2, down from $16.8 million, or $.74 per share, in Q2 of 2017 and in line with the Wall Street average estimate of a $.25 loss per share.

The firm ended the quarter with $66.3 million in cash and cash equivalents. It continues to expect between $112 million and $115 million in revenue for full-year 2018.

Oxford Immunotec's stock was up almost 5 percent at $12.46 in mid-morning trading on the Nasdaq.