NEW YORK – NanoString Technologies reported after the close of the market on Thursday that its first quarter revenues shrank 4 percent year over year.
For the three months ended March 31, total revenues were $26.6 million compared with $27.7 million in the prior-year period, exceeding the average Wall Street estimate of $25.4 million.
The firm reported product and service revenue of $24.5 million for the quarter, a 15 percent year-over-year growth from $21.4 in Q1 2019.
NanoString's Q1 instrument revenue more than doubled to $9.8 million from $4.3 million. This included $6.5 million from sales of its recently launched GeoMx digital spatial profiling system.
The company grew its installed base to approximately 880 nCounter Analysis Systems compared to 760 systems at the end of Q1 last year.
The firm's consumables revenue dropped 20 percent year over year to $11.5 million from $14.5 million. In December last year, NanoString exclusively licensed its clinical breast cancer IVD Prosigna to Veracyte, so it reported no clinical consumable revenues for Q1 2020. The Prosigna test brought in $2.3 million in the same period last year.
Collaboration revenue during the quarter was $2.1 million, down from $6.3 million in the same period last year.
In a call discussing the firm's quarterly results, NanoString President and CEO Brad Gray said that the COVID-19 pandemic has impacted both instrument and consumable sales, with sales of the company's nCounter system in particular falling short of expectations "as cuts across Europe and North America slowed the pace of research in mid-March."
That said, he added, the company managed to maintain momentum in sales of its newer GeoMx DSP, delivering "strong bookings and revenue growth despite the disruptions caused by COVID-19." The firm booked 50 new projects within its GeoMx technology access program (TAP) during Q1, almost double what it saw in the same period last year.
According to Gray, Nanostring is continuing its efforts to expand GeoMx adoption beyond oncology translational research and into more discovery-oriented realms. The company believes that by opening up GeoMx for next-generation sequencing readout, it can expand its addressable market by approximately twentyfold.
During the call, Gray said NanoString remains on track to ship its first NGS-enabled instruments, along with its new cancer transcriptome atlas panel covering more than 1,800 genes, during Q3.
"NGS-related opportunities now account for one-third of opportunities on our GeoMx instrument sales channel and one-third of the TAP orders we received during first quarter," Gray said.
Although the pandemic has affected NanoString's revenue streams, Gray added that it is also creating new research opportunities for its platforms. During the call, he said that the company has been approached by several research institutions interested in applying the GeoMx system to COVID-19 research, some through the TAP and some looking to use instruments in-house.
According to Gray, multiple recent publications have also demonstrated how nCounter can be used to explore host response in COVID-19 infections, and the company is "rapidly developing a COVID-19- specific gene expression spike-in assay that can be used with most of our panel product and custom code sets."
The firm is providing the beta assay at no charge to scientists during this period, and Gray said 50 researchers have put in orders for about 2000 samples worth of assays in the first month of availability.
"While COVID-19 has disrupted our business in near term, we expect a full recovery over the long term," Gray said on the call. "Our Instrument sales funnel and demand indicators for nCounter remain healthy, and interest in GeoMx remains higher than ever."
NanoString's Q1 net loss rose to $38.6 million, or $1.04 per share, from $21.9 million, or $.69 per share, a year ago.
The firm used 36,999,000 shares in calculating this quarter's net loss per share and 31,569,000 shares for the prior-year quarter.
NanoString spent $17.5 million on R&D during the quarter, about 9 percent more than the $16.0 million spent in Q1 2019. Its SG&A expenses were up about 10 percent at $25.7 million from $23.4 in the year-ago quarter.
The firm ended the quarter with $155.6 million in cash and cash equivalents, and $112.7 million in short-term investments.
When it reported a preliminary take on the Q1 results last month NanoString withdrew it's previously announced full-year guidance.