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NanoString Technologies Q1 Revenues Grow 19 Percent

NEW YORK – NanoString Technologies reported after the close of the market on Monday that its first quarter revenues grew 19 percent year over year.

For the three months ended March 31, total revenues were $31.6 million, compared with $26.6 million in the prior-year period, beating the average Wall Street estimate of $30.5 million.

The Seattle-based company reported product and service revenue of $31.4 million for the quarter, a 28 percent increase year over year from $24.5 million.

NanoString's Q1 instrument revenue grew 19 percent to $11.7 million from $9.8 million a year ago. This included $7.0 million from sales of its recently launched GeoMx Digital Spatial Profiler system.

The company grew its installed base to approximately 995 nCounter Analysis Systems, compared to 865 systems at the end of Q1 last year, and 160 GeoMx DSP systems compared to 55 a year ago.

Consumables revenue was $16.0 million, up 39 percent from $11.5 million a year ago, including $13.3 million in nCounter consumables and $2.7 million in GeoMx consumables. Service revenue was $3.7 million, up 17 percent from $3.2 million a year ago, driven by increasing interest in the firm's GeoMx technology access program.

Collaboration revenues totaled $223,000, down from $2.1 million a year ago.

"The launch of our GeoMx Whole Transcriptome Atlas is off to a great start and is now driving more than 60 percent of new projects in our GeoMx TAP," NanoString CEO Brad Gray said in a statement. "Meanwhile, our nCounter business showed continued durability, with steady demand for new instruments continuing more than a decade after the platform's introduction."

On a conference call with investors following the release of the financial results, Gray said the COVID-19 pandemic "continues to impact nCounter utilization" and has resulted in lower consumables pull-through for that platform, which the firm expects to continue through the middle of the year before improving in the second half of 2021.

The company's GeoMx Whole Transcriptome Atlas, launched in the first quarter, only contributed a couple of hundred thousand dollars to consumables sales, but Gray said he expects the assay to "make a much bigger contribution in quarters to come," especially given the interest seen in the TAP and the threefold increase in revenue per sample the assay provides.

NanoString's Q1 net loss was $27.7 million, or $.62 per share, compared to a net loss of $38.6 million, or $1.04 per share, a year ago, missing the consensus Wall Street estimate of a $.54 loss per share.

The firm used approximately 44.7 million shares in calculating this quarter's net loss per share and approximately 37 million shares for the prior-year quarter.

NanoString spent $15.1 million on R&D during the quarter, down 14 percent from $17.5 million in Q1 2020. NanoString CFO Thomas Bailey attributed the decrease to "timing of certain expenses for supplies and personnel" and said he expects R&D costs to increase throughout the rest of the year as the company invests in its spatial molecular imager.

Its SG&A expenses were up about 4 percent at $26.8 million from $25.7 million a year ago, driven by savings related to reductions in travel and trade show activities, partially offset by investments into spatial biology commercial activities and digital marketing initiatives.

NanoString reiterated guidance for 2021 product and service revenues in the range of $140 million to $150 million, representing growth of 26 percent to 35 percent compared to 2020.

The firm ended the quarter with $396.5 million in cash and cash equivalents and $13.4 million in short-term investments.

In Tuesday morning trading on the Nasdaq, shares of NanoString were down 2 percent at $57.01.

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