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Nanosphere's Q4 Revenues Rise 35 Percent; Firm Gets FDA Warning Letter

NEW YORK (GenomeWeb) – Nanosphere reported after the close of the market Wednesday preliminary fourth quarter revenue growth of 35 percent year over year.

The Northbrook, Ill.-based molecular diagnostics firm also said that it has received a warning letter from the US Food and Drug Administration related to deficiencies in the firm's quality system regulation.

For the quarter ended Dec. 31, Nanosphere reported preliminary revenues of $4.6 million, up from $3.4 million in the fourth quarter of 2014. Analysts, on average, expected revenues of $4.3 million.

It said that it made 47 new customer placements of its systems during the quarter compared to 35 in Q4 2013 and up sequentially from the 30 placed in the third quarter of 2014.

For FY 2014, its revenues were up 43 percent to $14.3 million from $10 million.

"We see continued and accelerated adoption of our expanding infectious disease test menu," Michael McGarrity, Nanosphere's president and CEO, said in a statement. "Our placement and revenue growth are clear indicators of demand for our products and are a validation that we are building a competitive foothold in the US molecular microbiology market."

The letter from the FDA was the result of an inspection carried out in March 2014 of the firm's facilities in Northbrook. It said that it is in the process of preparing a response to the letter and intends to respond fully to the issues raised by the FDA within the 15 business days requested by the agency. It noted that the letter doesn't restrict the "manufacture, production, or shipment of any of Nanosphere's products, nor require[s] the withdrawal of any product from the marketplace."

Nanosphere also said today that CFO Roger Moody notified the firm this week that he will step down from his position with the firm on Feb. 11. Nanosphere has appointed Ann Wallin, currently VP of finance and accounting, to serve as interim CFO and chief accounting officer after Moody leaves the firm.

Sheli Rosenberg also has resigned as chair of Nanosphere's board of directors. The company said that it will conduct search for a successor chair.

Nanosphere expects to report its comprehensive Q4 and FY 2014 results next month, though it didn't specify a date.

On a conference call Wednesday afternoon, McGarrity noted that a strategic review being conducted by investment bank Jefferies is ongoing.

Nanosphere's shares were down 18 percent at $.25 in Thursday morning trade on the Nasdaq.