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Oxford Immunotec Q3 Revenues Fall 8 Percent on COVID-19 Testing Volumes

NEW YORK – Oxford Immunotec said on Tuesday that its third quarter revenues fell 8 percent year over year, driven in part by the impact of COVID-19 on its testing volumes.

For the three months ended Sept. 30, the firm reported revenues of $19.4 million compared to $21.2 million in the year-ago quarter, above the high end of its previously announced guidance range for Q3 of $18 million to $19 million and beating analysts' average estimate of $18.7 million.

In Q3, the Oxford, UK-based company's US revenues fell 23 percent to $4.4 million compared to $5.7 million in the prior-year period. The decrease was driven by the impact of COVID-19 on testing volumes, though volumes continue to recover, the firm said, adding that US volumes increased sequentially from August to September and overall US Q3 revenue increased $3.2 million from Q2.

Europe and the Rest of World (ROW) revenues fell 37 percent year over year to $1.7 million from $2.7 million last year. COVID-19 drove down testing volumes, but revenues in the region improved sequentially from Q2 by nearly $700,000, the company said.

Asia revenue rose 4 percent to $13.3 million in Q3 compared to $12.8 million in Q3 2019, a record for revenues in the region, the firm said. The increase was driven by better price performance and a recovery in volumes across the region that were closer to levels before the COVID-19 pandemic, the company, said, adding that sequentially, its Asia revenues increased by $9.7 million compared to Q2.

"Our [tuberculosis test] revenues rebounded significantly across all geographies in the third quarter, and we expect the business to return to year-over-year growth in the fourth quarter," Oxford Immunotec CEO Peter Wrighton-Smith said in a statement. "Additionally, we have increased confidence in the role our T-spot T cell detection technology can play in SARS-CoV-2, and [we] are now advancing IVD test development towards a submission to the US and European regulatory authorities." 

Wrighton-Smith said on a conference call to discuss the firm's financial results that its T-spot T cell detection technology provides information that is complementary to what is provided by current SARS-CoV-2 tests, including PCR, antigen, and serology tests, and in clinical studies T-spot has shown it can identify an immune response to the coronavirus in patients missed by serology tests.

Wrighton-Smith further said that "TB screening is an essential part of controlling what is still the world's biggest killer from infectious disease. And just because COVID-19 has arisen as another major killer, it doesn't negate the necessity for TB screening to return."

It's understandable that public health resources are now focused on the pandemic, he said, "but that relative neglect of TB prevention will only make the TB problem more severe and the need for remedial action stronger once the COVID-19 pandemic fades."

He noted that the company recently obtained clearance from the US Food and Drug Administration to amend the pediatric age limitation for its T-Spot.TB tuberculosis test to include individuals two years of age and older.

T-Cell Select, its immune cell separation reagent that adds automation to its T-Spot.TB test, has been available for a while in Europe, China, and elsewhere outside the US, and customers like the improvements that it brings to their workflows and throughput, Wrighton-Smith said.

"We believe that automation changes the game for us," he said, adding that the firm has submitted a premarket approval supplement to get clearance from the FDA to sell T-Cell Select with its T.Spot TB test in the US. "Based on typical review timelines, we would expect approval in the second half of 2021," Wrighton-Smith added.

Oxford Immunotec had obtained FDA premarket approval to sell its T.Spot TB interferon-gamma release assays in 2008.

Oxford Immunotec's Q3 net loss was $149,000, or $0.01 per share, compared to a net income of $717,000, or $0.03 per share, in the third quarter of 2019. It beat analysts' expectations for a loss of $.05 per share.

The company's Q3 R&D expenses rose 63 percent to $2.6 million compared to $1.6 million a year ago. Its SG&A expenses fell 7 percent to $12 million compared to $12.9 million in Q3 2019.

Oxford Immunotec finished the quarter with $160.6 million in cash and cash equivalents.

The firm said it expects Q4 revenues to be between $19.0 and $20.0 million, assuming that testing volumes continue to recover from the impact of COVID-19 during the remainder of 2020. Prior to the release of the financial results, analysts on average expected Q4 revenues of $18.8 million.

Oxford Immunotec shares were up more than 9 percent to $12.54 in Tuesday morning trading on the Nasdaq.