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Oxford Immunotec Q2 Revenues Jump 36 Percent

NEW YORK (360Dx) – Oxford Immunotec reported Tuesday that its second quarter revenues increased 36 percent year over year, driven by continued growth in both its tuberculosis and tick-borne disease testing franchises.

For the three months ended June 30, Oxford Immunotec reported total revenues of $26.1 million, up from $19.2 million a year ago, and beating analysts' average estimate of $25.1 million.

Product revenues rose 12 percent to $10.4 million while service revenues increased 59 percent to $15.7 million. The company said that revenues related to its tuberculosis testing business grew 12 percent to $21.3 million, while tick-borne disease-related revenue was $4.8 million compared to none last year.

"As we continue our evolution from a single-product company to a multi-product company, we are pleased to see solid growth in our core tuberculosis business as well as a strong contribution from our accelerating tick-borne disease franchise," Oxford Immunotec CEO Peter Wrighton-Smith said in a statement.

Oxford Immunotec entered the tick-borne disease testing market last year when it acquired two Massachusetts-based diagnostic developers, Imugen and Immunetics.

During a conference call recapping the company's Q2 earnings, Wrighton-Smith noted that while US revenue grew 65 percent year over year, US TB growth was "slightly below our expectations as certain customers' test utilization was impacted by the current administration's policies, which have led to a decline in immigration to the US." Wrighton-Smith added that the company views this growth headwind as transient, "and [we] remain confident in our ability to drive double-digit revenue growth long-term in this large, underpenetrated TB market with our direct sales force."

He also highlighted the fact that last month the French Ministry of Health and Social Affairs approved reimbursement from the country's national health insurance system for a number of tests, including interferon-gamma release assays for TB screening such as Oxford Immunotec's T-Spot TB and Qiagen's QuantiFeron-TB Gold Plus. Wrighton-Smith said that the reimbursement rate for his firm's test is approximately €60 (about $71) while the reimbursement rate for Qiagen's test is approximately €40 per test, although Qiagen claimed in June that it was €45.

"We believe that the significantly higher reimbursement rate for our T-Spot TB test shows [that] the incremental clinical value provided by our test is substantial, and we were pleased to see the French Ministry of Health follow in the footsteps of Germany, Switzerland, and the US in setting this higher reimbursement rate," Wrighton-Smith said. "Looking forward, we're enthusiastic about converting this differential reimbursement into market share gains in France."

During the quarter, Oxford Immunotec also reached a settlement over a dispute regarding a licensing agreement with Statens Serum Institut, and recorded a settlement charge of $9.6 million. The company said it expects the settlement to result in an improvement in future TB gross margins.

The firm reported a quarterly net loss of $16.8 million, or $.74 per share, compared to a loss of $6.4 million, or $.29 per share, in the year-ago period. The company did not provide an adjusted number for loss per share. On average, analysts had expected a loss per share of $.32.

R&D expenses in Q2 grew 18 percent to $3.9 million from $3.3 million in the year-ago period, while SG&A expenses rose 23 percent to $18.0 million from $14.6 million a year ago.

The company ended the quarter with $36.7 million in cash and cash equivalents.

Oxford Immunotec raised its full-year revenue guidance to a range of $103 million to $106 million, compared to previous guidance of $102 million to $105 million. The company said that third quarter revenue is expected to be in the range of $29.5 million to $30.5 million. Analysts are expecting 2017 revenues of $104.1 million and Q3 revenues of $30.3 million.

In mid-afternoon trading on the Nasdaq, Oxford Immunotec's stock was up approximately 14 percent to $19.15.