NEW YORK — Chembio Diagnostics reported on Thursday that its revenues for the fourth quarter more than doubled year-over-year on a major purchase order for its SARS-CoV-2 antigen tests by Brazil's Bio-Manguinhos.
Despite the revenue gains, Chembio said that it continues to face market, clinical trial, and regulatory complications in seeking to develop and commercialize a portfolio of COVID-19 test systems. This, in addition to legal and other costs, has raised substantial doubt about the company's ability to continue operations, it said.
For the three-month period ended Dec. 31, 2021, Chembio's revenues climbed to $20.6 million from $10.2 million in the year-ago quarter. Product sales jumped 152 percent to $17.4 million from $6.9 million, driven by Bio-Manguinhos' $28.3 million purchase order for Chembio's DPP SARS-CoV-2 Antigen Test in July. A total of $16.8 million of that order was recognized in 2021.
R&D revenues declined 95 percent to $51,573 from $1.1 million a year ago, government grant income rose 45 percent to $2.9 million from $2.0 million, and license and royalty revenues fell 4 percent to $250,000 from $260,112.
Chembio's net loss in the quarter surged to $14.0 million, or $.47 per share, from $7.1 million, or $.35 per share, the year before.
Its Q4 R&D expenses edged up slightly to $3.4 million from $3.3 million in the year-ago quarter, while its SG&A costs shrunk 4 percent to $6.8 million from $7.1 million. The Medford, New York-based firm's cost of product sales jumped nearly 200 percent to $19.0 million from $6.4 million, and it recorded a $4.6 million charge in the fourth quarter of 2021 — related to severance, restructuring, and an impairment of goodwill and intangible assets from prior acquisitions — that it didn't have the prior year.
At the end of 2021, Chembio had cash and cash equivalents totaling $28.8 million.
For the full-year 2021, Chembio's revenues rose 47 percent to $47.8 million from $32.5 million.
Product sales for the year grew 40 percent year over year to $34.7 million from $24.8 million, while R&D revenues plummeted to $1.2 million from $4.9 million a year ago. Government grant income ballooned more than fivefold to $10.9 million from $2.0 million, and license and royalty revenues rose 24 percent year over year to $1.0 million from $832,562.
The company's net loss for the year increased to $33.9 million, or $1.40 per share, from $25.5 million, or $1.34 per share, in 2020.
The company's R&D spending rose 32 percent to $12.5 million from $9.5 million, while its SG&A costs increased 18 percent to $24.8 million from $21.0 million. Impairment, restructuring, severance, and related costs including an impairment of goodwill and intangible assets from prior acquisitions totaled $7.0 million in 2021 compared to $1.1 million in 2020.
Chembio said that its revenues for 2021 fell short of expectations, and that it continues to incur significant costs associated with pending legal matters, delayed achievement of milestones associated with government grant income, investments in inventory, and the continuing automation of manufacturing.
These matters, in combination with the difficulties Chembio is facing bringing COVID-19 products to market and meeting its obligations under a credit agreement, have created substantial doubt about its ability to continue as a going concern, the firm said.
In a statement, however, Chembio CEO Richard Eberly said that the company is "confident our investments in developing products in high value, growing markets and registering existing products in additional geographies can drive sustained growth over the long term. We are optimistic about our ability to improve profitability through continued product revenue growth and reduction of our cost infrastructure beginning in 2022."