NEW YORK – Oxford Immunotec on Tuesday reported a 70 percent decline in second-quarter revenues, driven in part by the impact of COVID-19 on testing demand.
For the three months ended June 30, the company posted revenues of $5.8 million compared to $19.6 million in the year-ago period, in line with analysts' estimates.
Oxford Immunotec CEO Peter Wrighton-Smith said in a statement that during Q2, the firm was able to keep advancing its "strategic priorities and ensuring the business is set to return to growth mode coming out of the pandemic. Testing volumes are recovering in all regions and, absent a significant global re-emergence of COVID-19, we are confident in a strong recovery in the business."
In Q2, the Oxford, UK-based firm booked $1.2 million in US revenues, an 85 percent decline year over year from $7.8 million. The decrease was driven by the impact of COVID-19 on testing volumes and the impact of planned inventory destocking by Quest Diagnostics.
As part of a strategic deal completed in 2018, Quest purchased Oxford Immunotec's US laboratory testing business and the firms entered a strategic collaboration in the US for sales of Oxford Immunotec's interferon-gamma release assay for latent tuberculosis.
On a conference call to discuss the financial results, Wrighton-Smith said he believes the planned destocking by Quest has been completed, "meaning this will no longer be a headwind to revenues, and revenues for the back half of 2020 will now better reflect underlying consumption growth."
Oxford Immunotec's Q2 revenue for Europe and rest of world (ROW) was $1 million, a 55 percent decrease year over year from $2.2 million. Its Q2 revenue in Asia was $3.6 million, down 63 percent year over year from $9.6 million.
Declines in Europe/ROW and Asia were driven primarily by the impact of COVID-19 on testing volumes.
Oxford Immunotec recorded a loss of $9.7 million, or $.37 per share, compared to a net income of $590,000, or $.02 per share, in the year-ago period. On average, analysts expected a net loss of $.30.
The company's Q2 R&D expenses rose 19 percent year over year to $2.5 million from $2.1 million, while its SG&A expenses dropped 15 percent to $11.0 million from $13.0 million.
Oxford Immunotec finished the quarter with $165.5 million in cash and cash equivalents.
Oxford Immunotec did not provide annual revenue guidance because of uncertainty associated with the scope and duration of the COVID-19 pandemic and of its impact on revenues and operating results.
The company said that for Q3 it expects revenues between $18 million and $19 million, as its testing volumes continue to recover from the impact of COVID-19 during the second half of 2020. On average, analysts expected FY 2020 revenues of $53.9 million and Q3 revenues of $15.1 million prior to the release of the financial results.
Wrighton-Smith said on the conference call that the company expects to soon start seeing year-over-year growth in Asia that "will strengthen as we go through the second half."
In Europe, Oxford Immunotec expects it "might get back to 2019 levels by the end of the year" but in the US, "because of the severity of the pandemic, we're not expecting to get back to 2019 levels by the end of the year," Wrighton-Smith said.
Wrighton-Smith noted that the firm recently launched a research-use-only test to measure T-cell responses against SARS-CoV-2. The test, based on the T.Spot technology that the firm uses in its latent TB assays, measures the strength of the T-cell response against a wide range of SARS-CoV-2 antigens, he said. Oxford Immunotec hopes "to get results published as quickly as possible" from a UK-based 2,500 patient study that demonstrates that T-cell responses can be found in people exposed to SARS-CoV-2, Wrighton-Smith said.
In Tuesday morning trading on the Nasdaq, shares of Oxford Immunotec were down more than 3 percent at $13.47.