This article has been updated from a previous version to include comments made by CombiMatrix CEO Mark McDonough in an earnings call.
NEW YORK (GenomeWeb) - CombiMatrix reported today that its third quarter revenues rose 29 percent year over year, supported by a 14 percent increase in test volume across the company's menu of assays.
For the three-month period ended Sept. 30, CombiMatrix's revenues climbed to $3.2 million from $2.5 million in Q3 2015. Revenue growth was driven primarily by higher test volume for reproductive health diagnostics, and higher revenue per test, particularly for the company's miscarriage and PGS tests.
In a statement, CombiMatrix CEO Mark McDonough said that the progress keeps the company "squarely on the path to profitability."
"We are pleased with our recent performance and expect continued growth in revenue and test volume, along with consistent cash reimbursement and prudent expense management in the coming year with a focus on creating value for our shareholders," he added. "Given our outlook, we are increasingly confident we will reach our goal of positive cash flow from operations by the fourth quarter of 2017."
Revenues from CombiMatrix's reproductive health tests rose 39 percent to $2.3 million from $1.7 million in the year-ago quarter. Specifically, the company saw an 11 percent increase in revenues from prenatal tests, a 42 percent increase in revenues from miscarriage analysis tests, and a 92 percent increase in revenues from its preimplantation genetic screening test, which the company transitioned from arrays to next-gen sequencing earlier this year.
Although the company's pediatric test volume shrank slightly, revenues from these tests rose by 6 percent to $589,000 from $558,000 a year ago.
Revenues from CombiMatrix's small volume of non-array tests (FISH and karyotyping) also rose 17 percent year over year to $306,000 from $261,000. Royalty revenue shrank 18 percent to $37,000 from $45,000 in Q3 2015.
In a call discussing the firm's Q3 earnings, McDonough added that CombiMatrix's billable customers reached 257 during the quarter, up 10 percent from a year ago. The firm's revenue and test volume growth has outpaced its growth in customers though, reflecting a continued focus on growing business with existing customers, as well.
According to McDonough, the company's improvements in cash collections have also played a pivotal role, including efforts by its billing and collections team to involve patients and physicians to serve as advocates for reimbursement by private payors for the miscarriage analysis that made up most of the firm's test volume during the quarter.
"We are seeing the effects of positive reimbursement decisions by third party payors to cover miscarriage analysis testing, based on overwhelming data supporting the medical necessity for this test," McDonough said. "Health plans are increasingly recognizing the clinical support and value of this information for patients in family planning."
The company's quarterly numbers also illustrate that CombiMatrix is growing its sales of PGS testing, which is a cash-pay business.
Overall, he noted, about 29 percent of the firm's tests are either directly billed to institutions or are cash-pay. The other 71 percent are billed to payors.
The company's net loss in the quarter shrank significantly to $856,000, or $0.38 per share, from a loss of $1.7 million, or $2.00 per share a year ago. CombiMatrix used approximately 2.3 million shares to calculate net loss in the recently completed quarter compared to about 845,000 shares in the year-ago period.
The Q3 2016 loss reflects one-time, non-cash charges of $1.9 million related to deemed dividends from the issuance of Series F convertible preferred stock and warrants in an $8.0 million public offering that closed in March, the company added.
The firm's R&D spending in the third quarter shrank more than 30 percent to $88,000 from $133,000 in Q3 2015, while its SG&A expenses remained level at $2.5 million.
CombiMatrix ended the quarter with cash, cash equivalents, and short-term investments totaling $4.3 million.