NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market Wednesday that its total revenues for the fourth quarter of 2019 rose about 23 percent, driven by continued growth in its product and services business.
For the three months ended Dec. 31, 2019, total revenues rose to $36.9 million from $30.0 million in Q4 2018, beating the average Wall Street estimate of $34.5 million and exceeding a preliminary estimate this January of $36.6 million.
The firm said it took in $33.6 million in product and service revenue in the quarter, a 42 percent increase from $23.6 million in Q4 2018.
Life Science consumables revenue for the quarter were $14.9 million, 14% year-over-year growth from $13.1 million. Its Prosigna breast cancer diagnostic kit sales were down 9 percent at $2.0 million from $2.2 million, while its service revenue was $3.0 million, up around 20 percent from $2.5 million.
The company exclusively licensed Prosigna to Veracyte this past December.
NanoString's Q4 Instrument revenues spiked 136 percent to $13.8 from $5.9 million in the previous year's fourth quarter, with $7.8 million of that from sales of the firm's recently launched GeoMx Digital Spatial Profiler.
The firm said it increased its installed base to 855 nCounter Analysis Systems as of Dec. 31, 2019, representing 17 percent growth over the prior year. The company also reported in its preliminary take on its revenues this past January that it had shipped 34 GeoMx systems during Q4, of which 25 installations were completed.
On a conference call discussing the company’s earnings report, NanoString President and CEO Brad Gray said that DSP orders exceeded the company’s expectations with a launch pace "vastly outpacing what we achieved with nCounter, which did not reach 90 cumulative orders until its 13th quarter."
NanoString's collaboration revenues for Q4 2019 dropped 48 percent to $3.3 million from $6.4 million in Q4 2018.
Its net loss for the quarter was $24.0 million or $.61 per share, compared to $21.1 million, or $.68 per share, in Q4 2018. Wall Street analysts, on average, had predicted a net loss of $.58 per share.
The company's R&D spending rose 9 percent to $18.0 million from $16.5 million in prior year's fourth quarter, while its SG&A spending jumped about 33 percent to $26.9 million from $20.3 million.
For full-year 2019, NanoString's total revenues were $125.6 million, up 18 percent from $106.7 million in 2018, again beating the Wall Street consensus estimate of $121.8 million.
Product and service revenue for 2019 was $103.7 million up 24 percent from $83.5 million the prior year. Instrument revenues were up 45 percent for the full year at $ 31.1 million compared to $21.4 million in 2018. This included $10 million of GeoMx DSP instrument revenue.
Overall, consumable revenues rose 14 percent for the full year. Prosigna IVD revenues remained flat year over year at $9.4 million, but other life science consumables brought in $51.6 million, up from $43.8 million in 2018.
The company's collaboration revenues dropped about 6 percent to $21.9 million from $23.2 million in 2018. Services revenues rose 32 percent to $11.6 million from $8.8 million.
"Our record product and service revenue in 2019 was driven by the successful launch of GeoMx DSP and the continued momentum of our core nCounter business," Gray said in a statement. "Customer interest in GeoMx has exceeded our expectations and we expect to see an acceleration in systems orders when we begin selling GeoMx into the basic discovery market in mid-2020."The company reported that it saw approximately 60 GeoMx DSP instrument orders over the course of 2019, bringing total cumulative orders received to more than 90 instruments. The firm shipped the first 44 of those orders in the second half of last year.
"2019 was a transformative year and 2020 is off to a great start,” he added during the call. "We used AGBT to unveil our roadmap of NGS-based GeoMx applications that will be available to the discovery market over the coming year," Gray added. The company believes this will help secure its leadership as a spatial genomics platform provider for translational research and provide a "strong entry into the discovery markets."
"We are set up for acceleration in our revenue growth in 2020 while making important steps on the path to break even," Gray said, with the latter goal being enabled by the combination of "accelerating revenue growth, operating expense discipline," and the elimination of costs associated with its nCounter diagnostic business, which the firm has now ceded to Veracyte.
NanoString's 2019 net loss dropped to $40.7 million or $1.18 per share, from $77.4 million, or $2.78 per share, in 2018. On an adjusted basis, NanoString's net loss for 2019 was $70.3 million.
The firm's full-year R&D spending increased about 10 percent percent to $68.0 million from $61.6 million, and SG&A spending rose 23 percent to $96.2 from $78.2 million.
The company ended the year with $29 million in cash and cash equivalents, and $127.8 million in short-term investments.
For 2020, NanoString said it expects an adjusted EBITDA loss of $46 million to $51 million and total product and service revenues between $124 million and $131 million, including approximately $30 million to $35 million from sales of GeoMx DSP, $25 million to $30 million from instrument sales, and approximately $5 million from sales of consumables.