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OpGen Q1 Revenues Fall 30 Percent

NEW YORK (GenomeWeb) – OpGen reported after the close of the market on Wednesday that its first quarter earnings fell 30 percent, driven by a sharp drop in laboratory services revenues.

For the three months ended March 31, the firm's revenues fell to $771,771 from $1.1 million in Q1 2016.

Product sales fell 22 percent to $734,502 from $947,219 a year ago, while laboratory services revenues fell 88 percent to $16,105 from $129,420. The company also recorded $21,164 in revenues from collaborations in Q1 2017.

"As we transition our business to the new Acuitas family of genomic and informatic products under development for management of drug resistant infections, our Q1 2017 revenue was impacted by decreased sales associated with the company's legacy FISH pathogen identification family of products and the discontinuation of our whole-genome mapping products," OpGen Chairman and CEO Evan Jones said in a statement. "We are working through this transition as we move forward with development and the planned commercialization of our Acuitas Rapid Test."

OpGen's Q1 net loss widened to $5.0 million from $4.5 million a year earlier. However, its loss per share narrowed to $.19 from $.36 as the number of weighted average shares outstanding rose to 26.1 million from 12.7 million in Q1 2016.

Its R&D expenses for the quarter rose 5 percent to $2.1 million from $2.0 million in the year-ago period. On a call with analysts following the release of the earnings, CFO Tim Dec noted that the company expects to see R&D costs decline throughout the rest of the year. The expenses included $200,000 in third-party development costs, which will likely not appear again. OpGen's SG&A costs rose 7 percent to $3.1 million from $2.9 million in Q1 2016. Dec noted this was due to payroll and legal expenses.

The company ended the quarter with $1.7 million in cash and cash equivalents.

In 2017, the company said it is focusing on advancing the development of its Acuitas Rapid Test for complicated UTI infections and infection control alongside the Acuitas Lighthouse Knowledgebase. OpGen expects to implement the technology for external research use in the second half of the year.

On the conference call, Jones said the company's genomic testing pipeline is "operating at full capacity," and that he anticipates making commercial products available in the fourth quarter. Later in the year, OpGen will establish an early-access program for Acuitas, he added. The firm also aims to win government contracts from agencies working to combat antibiotic resistance.

He further announced that former Genoptix CEO Tina Nova has joined OpGen's board.

"We anticipate 2017 will be a year of significant accomplishment," Jones said.