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NanoString's Q4 Revenues Jump 54 Percent

NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market Tuesday a 54 percent increase year over year in fourth quarter revenue.

Total revenues for the three months ended Dec. 31, 2014 increased to $15.6 million from $10.1 million in 2013 and beat the average Wall Street estimate of $15 million.

"Instruments and consumables remained the primary engine driving our growth," NanoString CEO Brad Gray said on a conference call following the earnings release. "Oncology was once again the primary driver of new instrument placement, accounting for approximately 70 percent of new instruments in the quarter." He added that more than half of new instrument sales occurred outside of North America, with China being the second largest market after the US.

Instrument revenue was $6.3 million, up 20 percent from the prior year. Consumables revenue was $7.2 million in Q4 2014, 69 percent higher than in Q4 2013, setting a new record for consumables revenue for the firm, Gray said. Revenue from the Prosigna breast cancer panel was $156,000 for the quarter and collaboration revenue totaled $1.4 million.

As of the end of the quarter, NanoString had an installed base of 264 nCounter Analysis Systems, a 44 percent increase over the number installed as of the end of 2013.

The firm posted a net loss for the quarter of $12.4 million, or $.68 per share, compared to $8.8 million, or $.60 per share, in Q4 2013. Its non-GAAP net loss was $.53 per share, meeting the consensus analysts' estimate.

NanoString's R&D spending increased 20 percent to $5.4 million from $4.5 million. Its SG&A costs increased 65 percent to $15 million from $9.1 million, driven by costs associated with the Prosigna launch and the expansion of the commercial sales team.

Full-year 2014 revenues increased 52 percent to $47.6 million from $31.4 million in 2013. Instrument revenue was $18.1 million for the year, up 39 percent from $13 million the prior year, while consumables revenue was $23.8 million for 2014, 43 percent higher than 16.6 million in 2013. Revenue associated with companion diagnostic collaborations was $3.1 million.

Prosigna revenue was $668,000, and Gray said that sales of the diagnostic would remain limited until providers are more widely reimbursed for it. "Inclusion in breast cancer treatment guidelines," such as forthcoming revised National Comprehensive Cancer Network guidelines for breast cancer, "will be a key catalyst for reimbursement and adoption of Prosigna," he said.

The firm's R&D spending was up 43 percent to $21.4 million for 2014 versus $15.0 million for 2013, while its SG&A spending increased 71 percent to $51.1 million from $29.9 million in 2013.

NanoString posted a net loss of $50 million, or $2.80 per share, compared to $33.9 million, or $4.44 per share, in 2013. On a non-GAAP basis its net loss for the year was $2.21 per share, falling just short of the consensus Wall Street estimate of a $2.20 loss per share.

The company ended the year with $72.2 million in cash, cash equivalents, and short-term investments.

For FY 2015, the firm estimates revenues of $58 million to $ 61 million, and an operating loss of $42 million to $49 million.

In Wednesday morning trade on the Nasdaq, shares of NanoString were down nearly 5 percent at $11.00.

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