NEW YORK – Akoya Biosciences' stock dropped almost a third on Friday after the firm reported the day before that its Q3 revenues dropped 25 percent year over year, making this the third consecutive quarterwith declining revenues due to weak instrument sales.
In light of the disappointing Q3 results, the Marlborough, Massachusetts-based spatial biology firm once again lowered its 2024 guidance. Additionally, the company, which carried out a reorganization and significant layoffs this year to conserve cash, says it is "actively evaluating a range of strategic alternatives to identify the best path forward, sustainable growth, profitability, and long-term success."
"As a public company, obviously we have a fiduciary responsibility to [investors], and always are constantly evaluating these strategic opportunities," Akoya CEO Brian McKelligon told investors in a conference call recapping the company's financial results. "There is nothing off the table." However, he declined to offer more details about these strategic alternatives when asked by investors.
For the three months ended Sept. 30, Akoya posted revenues of $18.8 million, down from $25.2 million in the year-ago period and well below the average Wall Street estimate of $25.4 million. The revenue decline was primarily driven by weak instrument sales, according to the company.
"Revenue for the third quarter came in below our expectations, largely due to ongoing capital equipment purchase constraints seen across the life sciences tools market," McKelligon noted.
Product revenues were $12.3 million, a 32 percent decline from $18.0 million in Q3 2023. Of these, instrument revenues were $5.7 million, down more than half from $12.0 million in Q3 of last year. Reagent revenue was $6.3 million, up 11 percent from $5.7 million in the year-ago period. Service and other revenues were $6.5 million, down 10 percent from $7.2 million a year ago, largely due to the shrinking instrument orders.
During the quarter, Akoya sold 35 instruments, about half as many as in the prior-year period. At the end of Q3, Akoya had 1,299 instruments installed, including 388 PhenoCyclers and 911 PhenoImagers.
McKelligon said the underperformance in instrument sales was primarily caused by "extended sales cycles and limited capital equipment funding," especially in North America. Asked whether the reorganization had any impact on instrument sales, he acknowledged that it "does present challenges across the organization," contributing to the sales drop.
Akoya's net loss in the third quarter was $10.5 million, or $.21 per share, compared to a net loss of $12.9 million, or $.26 per share, in Q3 of 2023. On average, analysts had estimated a loss per share of $.20.
The company's R&D expenses in Q3 were $4.5 million, down 29 percent from $6.3 million in Q3 of 2023. SG&A costs dropped 28 percent to $14.7 million from $20.3 million in the year-ago period.
The company ended the quarter with $12.6 million in cash and cash equivalents, as well as $23.3 million in marketable securities.
Due to "continued pressure on customer spending," Akoya once again lowered its guidance for full-year 2024. It now anticipates revenues to be in the range of $80.0 million to $85.0 million, down from a previous range of $96.0 million to $104.0 million. The midpoint of the new guidance "implies a minor step up" in fourth-quarter revenues from this quarter's performance, Akoya CFO Johnny Ek said.
Investors did not react positively to Akoya's results. Investment bank Craig-Hallum, for instance, downgraded Akoya's stocks from a Buy to a Hold rating and lowered its price target to $5 per share.
The downgrade is "to reflect increased concerns about macro-level demand and lack of visibility," Craig-Hallum analyst Bill Bonello wrote in a note. "While we think that macro trends probably are the primary cause of the lower growth, the miss is likely to heighten concerns about increased competition."
In addition, given the company's available cash and cash burn, Bonello said he "certainly cannot rule out the need for additional financing" for the company.
In morning trading on the Nasdaq, Akoya's stock was down 30 percent at $2.20 per share.