NEW YORK – Oxford Immunotec on Monday said its fourth quarter revenues rose 18 percent year over year driven in part by an expanding global tuberculosis market.
For the three months ended Dec. 31, 2019, the Oxford, UK-based company reported $18.1 million in total revenues compared to $15.4 million a year ago and beating analysts' consensus estimate of $17.1 million.
Product revenues rose 19 percent year over year to $17.1 million from $14.5 million while service revenues rose 6 percent to $973,000 from $916,000.
"The fourth quarter represents another quarter of strong revenue growth and improving profitability metrics," Peter Wrighton-Smith, the firm's CEO, said in a statement. "The company continues to see the global tuberculosis market expanding, and we are investing in both commercial resources and research and development to capitalize on this opportunity."
The firm noted that as a result the sale of its US laboratory services business to Quest in November 2018, its total revenue and product revenue for the three months and full-year ended Dec. 31, 2019 and the three months and full-year ended Dec. 31, 2018 are not fully comparable. Up to the date of the sale, total revenue and product revenue for the 2018 periods included sales to its former US laboratory services business at an intercompany transfer price that had been formerly eliminated in consolidation, the firm said. Total revenue and product revenue from the date of sale has included revenue from its T-spot.TB test kits and related accessories sold to Quest under the terms of a long-term supply agreement.
Also, for full-year 2018, service revenue included blood donor screening of $1.7 million. Oxford Immunotec exited the business in 2018. Excluding the 2018 blood donor screening revenue, 2019 service revenue would have increased 16 percent over 2018, the firm said.
On a conference call to discuss the firm's financial results, Wrighton-Smith said that in 2019 the company sold close to 4 million tests, bringing the cumulative number of tests sold to nearly 20 million.
He said that Quest has made "significant progress" on electronic ordering and results systems and enhanced "logistics, ease, and capacity" for T-spot.TB by leveraging its joint-venture networks and opening up testing in its Chantilly, North Carolina lab.
The firm is seeing "many new prescribers of T.spot.TB," a vindication of the rationale for a deal that has given Oxford Immunotec access to a part of the market it couldn't otherwise reach, he said.
As a result of the relationship with Quest, the test is now in about 1,400 patient service centers, Wrighton-Smith said.
Oxford Immunotec reported a Q4 net loss of $1.6 million, or $.06 per share, compared to net income of $141.1 million, or $5.36 per share in the year-ago period. On average, analysts had expected a net loss of $.10 per share for Q4 2019.
The company's Q4 R&D expenses rose 23 percent to $2.7 million from $2.2 million a year ago while its SG&A expenses rose 7 percent to $13.3 million from $12.4 million.
For full-year 2019, Oxford Immunotec's revenues grew 23 percent to $73.7 million from $59.8 million. The Wall Street consensus average was $72.8 million in revenues for 2019.
Product revenues increased 28 percent to $69.8 million from $54.7 million while service revenues dropped 22 percent to $3.9 million from $5.1 million.
The company reported a 2019 net loss of $1.8 million, or $.07 per share, compared to net income of $120.8 million, or $4.65 per share, in 2018. On average, analysts had expected a net loss of $.09 per share.
Oxford Immunotec's full-year R&D expenses rose 7 percent to $8.7 million from $8. 1 million a year ago while its SG&A expenses fell 3 percent to $50.7 million from $52.5 million.
The company finished the quarter with $181.3 million in cash and cash equivalents.
For full-year 2020, the company expects revenues to be between $78 million and $81 million, including current estimates for the impact of the novel coronavirus on its business.
In 2019, business growth for Oxford Immunotec in China "was particularly strong as we started to see the advantages of going more direct into the marketplace," Wrighton-Smith said on the conference call. "Obviously, we can't talk about China without also talking about the coronavirus outbreak. The outbreak has had several effects on our business." Overall, demand for TB testing "is significantly lower than it would be under normal circumstances," he said.
"For the full-year 2020 prior to the coronavirus outbreak, we had expected revenues of between $83 million and $86 million dollars, representing 15 percent year-over-year growth at the midpoint," Wrighton-Smith said. "On the assumption that business returns to normal in China by the end of March and that there is no material disruption to our ability to serve the market, we estimate the impact of the reduced demand for testing and the reduced selling days to be around $5 million for the full year."
In afternoon trading on the Nasdaq, Oxford Immunotec shares were down slightly more than 1 percent at $13.02.