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NanoString Q2 Revenues Jump 20 Percent

NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market Tuesday that its second quarter revenues jumped 20 percent on the strength of instrument and consumables sales.

For the three-month period ended June 30, NanoString's revenues rose to $13.1 million from $ 10.9 million in the same period a year ago, beating the consensus Wall Street estimate of $12.8 million.

On a conference call following the release of results, NanoString CEO Brad Gray said the quarter had been "pivotal" for the firm and it made "tremendous progress" towards its strategic objectives. The firm launched a new instrument, a new RNA protein assay, hired a new chief medical officer with experience in immuno-oncology, and started three research partnerships.

Instrument revenue was up 17 percent to $4.4 million from $3.8 million, while consumables revenues increased 17 percent to $6.8 million from $5.9 million. "System sales were strong outside North America, generating over 60 percent of revenue," Gray said, adding that instrument revenues included sales of the first two nCounter Sprint platforms, to the Broad Institute. However, he said the Sprint has not yet contributed meaningfully to consumables pull through. "Typically the first consumables revenue comes in the quarter subsequent to the instrument placement," Gray explained.

Sales of in vitro diagnostic kits, specifically its Prosigna breast cancer assay kit, rose to $592,000 from $ 181,000. 

Collaboration revenue was $568,000, mostly from a partnership with Celgene, but Gray said that number would increase in the future. A research collaboration signed with Merck to find biomarkers using the nCounter platform was indicative of NanoString's "deepening relationship with biopharma," Gray said. NanoString officials said they expected $4.5 million in revenue from the Merck partnership through the end of the year, significant enough to warrant an updated guidance for full-year 2015 revenues. NanoString officials also said that the firm began a pilot study with an undisclosed biopharma partner that could transition to a companion diagnostic if successful.

The company's net loss in the second quarter improved to $12.4 million, or $.66 per share, from $14.1 million, or $.78 per share in Q2 2014, but still fell short of the average Wall Street estimate of $.57 loss per share.

NanoString's R&D spending in the quarter increased 9 percent to $5.8 million from $5.3 million in the same period the year before, reflecting increased costs related to the development of new research products and related technology.

NanoString's SG&A expenses, meantime, dipped less than 1 percent to $12.8 million from $12.9 million, due to streamlined sales and marketing organization, offset by increased administration and facility costs.

NanoString finished the quarter with $53 million in cash, cash equivalents, and short-term investments.

The company updated its financial guidance for full-year 2015, expecting total revenues in the range of $60 million to $63 million, previously in the range of $58 million to $61 million; and an operating loss between $41 million and $47 million, previously in the range of $43 million to $49 million. It reiterated guidance for operating expenses of $77 million to $81 million.