NEW YORK – NanoString Technologies reported after the close of the market on Wednesday that its second quarter revenues were down 25 percent year over year, driven by lower consumables and collaboration revenues.
For the three months ended June 30, 2020 the company's total revenues were $22.6 million compared to $30.3 million a year ago, beating the consensus Wall Street estimate of $16.2 million.
Product and service revenues were down 5 percent to $21.1 million compared to $22.4 million in the year-ago quarter. On a pro forma basis, reflecting the impact of the December 2019 deal that saw Veractye acquire the Prosigna breast cancer test, product and service revenue grew 2 percent. NanoString's pro forma calculations recognize about one-third of the previous Prosigna revenue over the same units sold.
Instrument revenue doubled to $9.8 million from $4.9 million in the prior-year period, including $6.3 million from sales of the GeoMx Digital Spatial Profiler and $3.5 million from sales of the nCounter platform.
Consumables revenues were $8.4 million, down 42 percent year over year from $11.8 million. GeoMx consumables revenue was about $400,000, and nCounter consumables revenue was $7.9 million.
Service revenues dropped 2 percent year over year to $3 million, the firm said.
The company's collaboration revenues fell 82 percent to $1.5 million from $8.0 million in Q2 2019.
"We extended our spatial genomics market leadership in the second quarter, generating orders for 20 new GeoMx DSP systems. We recently enabled GeoMx DSP with read-out on next generation sequencers, which significantly expands our market opportunity in the large discovery research community," NanoString President and CEO Brad Gray said in a statement. "In addition, despite COVID-19 headwinds, we had better than expected nCounter instrument placements and consumable pull-through in the second quarter."
NanoString estimated that the installed base for its nCounter systems rose to approximately 890 as of the end of the quarter from about 790 at the same time last year. The firm installed 11 GeoMx instruments, bringing the installed base to 69 instruments, and shipped a total of 24 instruments.
On a conference call following the release of results, Gray noted that only part of the demand for GeoMx was reflected in the second quarter and that shipments, installations, and training were slowed due to COVID-19-related lab closures. Last week, the firm launched its first GeoMx assay with next-generation sequencing readout, the Cancer Transcriptome Atlas, a development that Gray called "the most important product launch in the company's history."
The coronavirus pandemic impacted nCounter revenues in all geographies, especially North America, where revenues were down about 50 percent, year over year. Asia Pacific nCounter revenues in the quarter were down approximately 15 percent year over year; Europe, about 30 percent.
NanoString's R&D expenses fell 8 percent to $15.7 million from $17.0 million in Q2 2019, attributable to reductions related to the Veracyte deal and reduced collaboration activity, offset by investment in GeoMx. Its SG&A costs fell 11 percent to $19.9 million from $22.5 million a year ago, attributable to reductions related to the Veracyte deal and reduced travel and trade show activities and offset by investment in the GeoMx customer experience and service group as well as digital marketing initiatives.
The firm's net loss for the quarter was $27.1 million, or $.72 per share, compared to $20.0 million, or $.57 per share, in Q2 2019. Analysts, on average, had expected a loss of $.52 per share. NanoString used 37,785 shares to calculate net loss in Q2 2020 compared to 35,174 shares in the year-ago period.
NanoString finished the quarter with $168.4 million in cash and cash equivalents, and $80.3 million in short-term investments.
The firm reiterated that it would not provide full-year revenue guidance, due to the pandemic, but offered Q3 2020 guidance for product and service revenues between $25 million and $28 million, including nCounter revenues between $18 million and $20 million and GeoMx revenues between $7 million and $8 million. NanoString CFO Thomas Bailey said the firm did not expect a return to "business as usual" until 2021.
In morning trading on the Nasdaq, shares of NanoString were down less than 1 percent at $34.91.