Skip to main content
Premium Trial:

Request an Annual Quote

NanoString Q1 Revenues Rise 32 Percent

NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market on Wednesday that its first quarter revenues jumped 32 percent but fell short of Wall Street expectations.

For the three-month period ended March 31, NanoString's revenues climbed to $11.6 million from $8.8 million in the same period a year ago. Despite the growth, the company's revenues came in under the average analysts' estimate of $12.1 million.

Instrument revenue was up 27 percent to $4.4 million from $3.4 million, while consumables revenues increased 21 percent to $5.5 million from $4.8 million. The company said that the growth in consumables revenues was negatively impacted by, among other things, quarter-to-quarter variability in customer ordering patterns.

"Biopharma customers who had made extraordinarily large consumable purchases in Q4 worked through those projects in Q1 before reordering," NanoString President and CEO Brad Gray said during a conference call. "As a result, biopharma contributed less than 30 percent of consumable revenue compared to over 40 percent in the first quarter of 2014 and over 50 percent in Q4 2014."

Additionally, consumables ordering was slowed by severe weather in the Northeast, the region with the largest installed base of nCounter Analysis Systems, while changes in foreign exchange rates reduced the amount realized from sales outside the US, he added.

Sales of in vitro diagnostic kits, specifically its Prosigna breast cancer assay kit, rose to $381,000 from $61,000.

However, Gray cautioned that uptake of Prosigna will "remain limited" until NanoString is able to obtain additional payor coverage for the test, particularly in the US.

He noted that the National Comprehensive Cancer Network has yet to fully update its guidelines, and that over the past year NanoString has generated additional clinical data around Prosigna that were included in the dossier submitted to the cancer center alliance.

"So in many ways, the NCCN guidelines, when they are fully updated, will be lagging behind by about a year on NanoString's clinical data," Gray said.

As such, the company has been working to gain coverage for its test independent of NCCN guidelines, providing new clinical data to payors including the leadership of the Medicare Contractor Palmetto's MolDx program.

"Their reaction has been positive … [suggesting that] some of these groups will be able to move forward with decisions that may be independent of the NCCN guidelines," Gray said. "However, the pace of our payor discussions remains deliberate and the timing of coverage decisions uncertain. Therefore, we are maintaining our guidance assumption that any positive MolDx coverage for Prosigna will not impact 2015 revenues."

The company's net loss in the first quarter increased to $14.9 million, or $.81 a share, from $11.4 million, or $.68 a share, last year. Wall Street analysts had, on average, been expecting the company to report a loss per share of $.58.

NanoString's R&D spending in the quarter increased to $5.9 million from $4.7 million in the same period the year before, reflecting the increased costs associated with personnel hired in 2014 to further develop the company's nCounter technology and support its companion diagnostics collaboration with Celgene.

NanoString's SG&A expenses, meantime, grew to $14.1 million from $10.7 million, in part due to the costs associated with personnel hired to support commercialization of Prosigna.

NanoString finished the quarter with $14.3 million in cash and cash equivalents, and $41.2 million in short-term investments.

The company reiterated its financial guidance for full-year 2015, expecting total revenues in the range of $58 million to $61 million, operating expenses between $77 million to $81 million, and an operating loss between $43 million and $49 million.