NEW YORK (GenomeWeb News) – NanoString Technologies reported after the close of the market Wednesday a 55 percent increase in fourth quarter revenues, driven by strong growth for its instruments.
The Seattle-based genetic analysis systems maker reported total revenues of $10.1 million for the three months ended Dec. 31, up from $6.5 million year over year. NanoString beat analysts' consensus estimate for revenues of $9.6 million.
Its instrument revenue increased 109 percent to $5.3 million from $2.5 million year over year, while its consumables revenue rose 19 percent to $4.3 million versus $3.7 million. Service revenue was $437,000 for the quarter, up from $258,000. NanoString also reported $140,000 in in vitro diagnostic kit revenue for Q4.
CEO Brad Gray said on a conference call following the release of the results that NanoString focused heavily on placing new instruments during the quarter, ending Q4 with an installed base of 180 systems that had an estimated annual consumable pull through of $100,000 per instrument.
"We believe that this is the highest quality type of growth, because expanding our installed base should generate higher consumable revenue in the future," Gray said. NanoString's customers continue to be primarily cancer researchers and biopharmaceutical companies, as well as clinical laboratories, a "new source of growth that ... we expect to become even more important in the future," he said.
The firm posted a net loss of $8.8 million, or $.60 per share, compared to a loss of $5.9 million, or $19.85 per share, for the fourth quarter of 2012. NanoString went public in June 2013.
On a non-GAAP basis, its net loss per share for the quarter was $.51 versus $.53 for the comparable quarter a year ago, easily beating the Wall Street estimate of $.59.
Nanostring's R&D costs for the quarter climbed 32 percent to $4.5 million from $3.4 million, and its SG&A expenses jumped 87 percent to $9.1 million from $4.9 million.
On the call, CFO Jim Johnson attributed the increase in R&D costs to increased investment in the firm's nCounter technology, as well as the design and engineering of a new benchtop system. Johnson said the rise in SG&A expenditures reflected "Prosigna launch costs, investments to expand our existing life sciences sale channel and the added cost of being a public company."
NanoString received US Food and Drug Administration clearance for the Prosigna Breast Cancer Prognostic Gene Signature Assay in September 2013. The assay is based on the PAM50 gene signature and analyzes the gene expression profile of cells found in breast cancer tissue to assess a patient's risk of distant recurrence of disease.
Gray said that NanoString has been marketing the test to major cancer centers and commercial labs. In total, NanoString saw six Prosigna-related installations in the US during the fourth quarter, he said, including placements at ARUP Laboratories, Laboratory Corporation of America, and Quest Diagnostics.
For full-year 2013, NanoString generated revenues of $31.4 million, up 37 percent from $23 million year over year. It surpassed analysts' consensus estimate for revenues of $30.8 million.
Its instrument revenue jumped to $13 million from $8.8 million, while its consumables revenue climbed to $16.6 million from $13 million. It service revenue increased to $1.6 million from $1.2 million.
NanoString's net loss climbed to $29.3 million, or $4.44 per share, for the year from $17.7 million, or $71.10 per share, for 2013. On a non-GAAP basis, its loss per share was $2.14 for the year, beating the consensus Wall Street estimate of $2.26.
The firm's R&D expenses increased to $15 million from $11.6 million, while its SG&A spending nearly doubled to $29.9 million from $15.5 million.
NanoString finished the year with $9.9 million in cash and cash equivalents and $32.7 million in short-term investments. Subsequent to the finish of the quarter, the firm raised around $57 million in net proceeds from a follow-on offering of common stock.
Looking ahead, Johnson said that NanoString expects total 2014 revenues of between $45 and $50 million, which would represent growth of between 43 percent and 59 percent over 2013. He said NanoString believes that sales of instruments and consumables will drive that growth, while sales to clinical laboratories would provide additional revenues.
In Thursday morning trade on the Nasdaq, shares of NanoString were up a fraction of 1 percent at $18.45.