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Nanosphere Q1 Revenues Jump 41 Percent

NEW YORK (GenomeWeb) – Nanosphere today announced after the close of the market that its first quarter revenues rose 41 percent on sales of its Verigene Gram Positive and Gram Negative Blood Culture Tests.

The firm also said that it has entered into a definitive agreement with an institutional investor in a registered direct offering of $4.4 million and entered into a new $30 million debt facility with NSPH Funding.

For the three months ended March 31, 2015, the Northbrook, Illinois-based molecular diagnostics company said that revenues increased to $4.6 million from $3.3 million a year ago, beating the average Wall Street expectation of $4.5 million.

Sales of the blood culture tests in the quarter more than doubled year over year compared to Q1 2014, the firm said in a statement.

"We are pleased to report continued adoption of our Verigene system and its expanding menu though our US customer base. In addition, we have made significant progress on our next-generation Verigene system," Nanosphere President and CEO Michael McGarrity said in a statement.

Nanosphere also entered into a registered direct offering fo $4.4 million of convertible preferred stock, convertible into more than 1.1 million shares of common stock at a conversion price of $3.77, and issued warrants for more than 1.1 million shares of common stock at an exercise price of $3.65 per share, exercisable for five years and six months from the closing date. The firm said it expects to close the offering on or about May 14. H.C. Wainwright & Co. acted as the exclusive placement agent of the offering.

Also, on May 7, the firm entered into a commitment letter that provides for a new $30 million debt facility with NSPH Funding. The firm said it expects to draw down $20 million from the facility at an initial closing on or before May 22 and terminate its existing debt facility with Silicon Valley Bank and Oxford Finance.

The firm said it intends to use the proceeds of the offering and the debt facility for general corporate purposes and working capital.

The firm's net loss in the quarter was $7.5 million, or $1.29 per share, compared to a net loss of $10.0 million, or $2.60 per share, a year ago, beating the consensus Wall Street estimate of a net loss per share of $1.79.

Nanosphere's R&D spending dropped 30 percent to $3.6 million from $5.2 million during the first quarter of 2014, due to reduced staffing and clinical trial expenses. SG&A costs fell 7 percent to $5.2 million from $5.6 million.

Nanosphere ended the quarter with $14.2 million in cash and cash equivalents.

"The remainder of 2015 will be spent advancing the significant progress made to date and preparing for clinical trials targeted to commence by year-end," McGarrity said.