NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market on Thursday that its first quarter revenues grew 18 percent year over year, beating Wall Street expectations on the top line, but falling short on the bottom line.
For the three months ended March 31, total revenues were $27.7 million compared to $23.1 million in the prior-year period and surpassing the average Wall Street estimate of $25.5 million.
NanoString's Q1 instrument revenues shrank 8 percent year over year to $4.3 from $4.7 million, but the company still increased its installed base to 760 from 640 at the same time last year.
The firm's consumables and IVD test kits revenue rose 25 percent to $14.5 million from $11.5 million in the same period last year, of which Prosigna breast cancer tests brought in $2.3 million, a roughly 5 percent increase over $2.2 million earned in Q1 2018.
NanoString generated $21.4 million overall in products and services revenue, an 18 percent increase over the $18.0 million it saw in the first quarter of 2018. Collaboration revenue was $6.3 million, up from $5 million in the same period last year.
President and CEO Brad Gray attributed the firm's performance to growth in its core nCounter business and increased customer anticipation for the new GeoMx Digital Spatial Profiler (DSP), launched just after the end of the quarter this April for use by the growing field of spatial genomics.
In a call discussing the firm's quarterly earnings, Gray said that first quarter revenue from NanoString's panel products "set an all-time record, growing in excess of 40 percent year on year."
"Our immune-oncology panels were a highlight, and both our pan-cancer immune profiling panel and our IO 360 panel achieved record sales during the quarter … [and] we continue to penetrate non-oncology accounts like immunology and neurology, in which panel revenue grew 65 percent year on year," he added.
Meanwhile, NanoString's pre-launch activities for its new GeoMx systems resulted in cumulative DSP orders that totaled more than 40 instruments by the quarter's end, Gray said.
He also highlighted that alongside the commercial launch of GeoMx DSP, NanoString has made several new partnerships — with Bio-Techne, Abcam, and Leica Biosystems — that the company believes will "build an ecosystem of technologies to automate the workflow and expand consumable content for GeoMx."
In partnership with Bio-Techne, NanoString is co-developing an integrated workflow and working to develop new tools for spatial genomics; the deal with Abcam will expand the menu of antibodies for GeoMx DSP; and Leica Biosystems has agreed to co-market GeoMx DSP with its BOND RX platform for high-throughput spatial analysis.
Diagnostic sales were mixed for the company. Gray said that the firm's Prosigna breast cancer test saw solid revenue growth in Europe, "where the appeal of the decentralized testing is strongest." But, "performance in North America was weaker as competitive counter detailing shifted market share away from us in some accounts," he explained.
One disappointment for NanoString since the end of Q1 was Celgene's announcement that its Phase III ROBUST study — in which patients with diffuse large B-cell lymphoma were selected using NanoString's LymphMark assay — failed to meet its primary endpoint.
NanoString had hoped that its test could be advanced as a companion diagnostic with Celgene, but the results of the study have failed to support seeking regulatory approval for that indication.
Despite this outcome, Gray said there remains a "significant unmet medical need for subtyping DLBCL patients based on the cell of origin as per WHO 2016 lymphoma classification guidelines."
"We believe that LymphMark can provide clinical value in this disease, and we continue to explore a commercial path for the assay independently as a cell of origin subtyping test and/or in partnership with one of the approximately 25 different biopharma companies who have run pilot studies using the assay for patient stratification," he added.
NanoString's Q1 net loss rose to $21.9 million, or $.69 per share, from $19.2 million, or $.75 per share, a year ago, exceeding the consensus Wall Street estimate of $.60 per share.
The company spent $16 million on R&D during the quarter, about 16 percent more than the $13.8 million spent in Q1 2018. Its SG&A expenses were up 21 percent at $23.4 from $19.4 in the year-ago quarter, primarily reflecting increased investment in personnel and commercial launch activities related to GeoMx DSP.
NanoString ended the quarter with $84.1 million in cash and cash equivalents, and $58.3 million in short-term investments.