NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market Thursday that its total revenues for the fourth quarter of 2018 were down about 15 percent year over year, while its product and services revenue grew 12 percent.
For the three months ended Dec. 31, 2018, total revenues dropped to $30.0 million from $35.2 million in Q4 2017, beating the average Wall Street estimate of $29.4 million.
The firm said it took in $23.6 million in product and service revenue in the quarter, a 12 percent increase from $21.0 million in Q4 2017.
Excluding the firm's Prosigna breast cancer assay, consumables revenue in Q4 was $13.1 million, a 14 percent increase over $11.5 million a year ago. Revenue from the Prosigna IVD rose 24 percent to $2.2 million from $1.8 million in the same period of 2017. The company attributed this to a gain in test volumes, most significantly in territories outside the US.
Q4 Instrument revenues were flat year over year at $5.9 million though the firm said it increased its installed base to 730 nCounter Analysis Systems as of Dec. 31, 2018, representing 21 percent growth over the prior year.
Collaboration revenues for Q4 2018 dropped significantly to $6.4 million compared to $14.2 million in Q4 2017. Collaboration revenue in Q4 2018 came primarily from Lam Research and Celgene Corporation, as opposed to the prior year's Q4 when the company saw accelerated recognition of deferred revenue from a recently- ended Merck collaboration.
NanoString's services revenues increased 36 percent to $2.5 million from $1.8 million, driven by increased contracts associated with the firm's installed base of nCounter instruments, as well as demand for its GeoMx DSP Technology Access Program.
Its net loss for the quarter was $21.1 million, or $.68 per share, compared to $8.8 million, or $.34 per share, in Q4 2017. This feel short of analysts' average estimate of a net loss of $.50 per share.
The company's R&D spending increased 21 percent to $16.5 million from $13.7 million in 2017, reflecting investments in both the GeoMx DSP and Hyb & Seq technologies. SG&A spending inched up 3 percent to $20.3 million from $19.7 million in the prior-year period.
Among recent business highlights, NanoString highlighted last year's recommendation from the UK's National Institute for Health and Care Excellence (NICE), which now endorses the use of the Prosigna to guide adjuvant chemotherapy decisions for early-stage breast cancer patients.
The company also said it had installed the first seven of its GeoMx Digital Spatial Profiler beta systems as of March 7, 2019. "Interest in [GeoMx] has consistently exceeded our expectations and we expect to accelerate our top-line growth in the second half of 2019 following the commercial launch," Reflecting a "growing nCounter installed base and strong consumable pull-through," NanoString president and CEO Brad Gray said in a statement.
During a call discussing the firm's earnings, Gray added that NanoString believes it is "defining a new open-ended market in the field of spatial genomics."
"When we commercially launch GeoMx DSP less than a month from today, we will kick off a product cycle than we expect to both accelerate our revenue growth and transition us into a multiplatform company," he said.
"While GeoMx will not be the only technology used for spatial profiling, we believe that our early entry into the market and unique product make us well positioned to capitalize on this growing field and to help shape how the market develops."
For full-year 2018, NanoString's total revenues were $106.7 million, down from $114.9 million in 2017, but beating analysts' consensus estimate of $106 million, and within the preliminary projection that the company reported in January.
Product and service revenue for 2018 increased 16 percent to $83.5 million from $72.0 million in 2017.
Instrument revenues increased 3 percent over the full year to $21.4 million from $20.8 million in 2017. Prosigna IVD revenues were up 40 percent at $9.4 million from $6.7 million the prior year, while remaining consumables brought in $43.8 million, a 14 percent increase from $38.3 million in 2017.
The company's collaboration revenues dropped to $23.2 million from $42.9 million in 2017 but services revenues increased 44 percent to $8.8 million from $6.1 million.
NanoString's 2018 net loss rose to $77.4 million, or $2.78 per share, from $43.6 million, or $1.84 per share in 2017. On average, Wall Street analysts had expected a net loss of $2.58 per share for the year.
The firm's full-year R&D spending rose 31 percent to $61.6 million from $46.9 million and SG&A spending increased 5 percent to $78.2 million from $74.3 million.
The company ended the year with $24.4 million in cash and cash equivalents, and $69.6 million in short-term investments.
For 2019, NanoString said it expects total revenues of $118 million to $123 million, and a net loss of $2.30 to $2.45 per share. Product and service revenue is expected to be between $98 million and $103 million next year, including approximately $6 million to $8 million from sales of its new GeoMx DSP.