NEW YORK (GenomeWeb) – At the close of the market on Wednesday, microbial genetics testing and analysis firm OpGen reported a 55 percent dip in its first quarter revenues.
In its first conference call as a publicly traded company, OpGen reported $472,200 in Q1 2015 revenues, down from revenues of $1.1 million for the first quarter of 2014. The company attributed the dip to the shift in its business focus from product sales and collaborative sales agreements around its Argus Optical Mapping System for microbial whole-genome analysis, to providing solutions for molecular testing and analysis for multi-drug resistant organisms.
Last year, the company launched the Acuitas MDRO Gene Test, a CLIA test that provides information about 10 MDRO resistance genes from a single patient specimen; followed by the Acuitas CR Elite Test, which combines the Acuitas MDRO test with microbiological analysis. This year, the company launched the Acuitas Resistome test and the Acuitas Lighthouse MDRO management system, which provides molecular information about patients' resistance profiles and integrates that data with other patient and hospital-wide data.
The Q1 revenue decline "was consistent with our change in focus from life sciences research to being a molecular information company working to help combat serious multi-drug resistant infections," Tim Dec, the company's newly appointed CFO, said in a statement. "In the second half of 2015, we anticipate increasing momentum and revenue contribution from our new Acuitas and Lighthouse offerings. As discussed in our IPO prospectus, we anticipate declining revenue for our legacy life sciences products."
During a conference call to discuss the company's Q1 earnings, Dec further attributed the decreased revenue to reduced contract R&D funding as an existing partnership between OpGen and Hitachi High Technologies focused on developing technology for mapping, assembling, and analyzing of human genomes draws to a close. As a result, collaboration revenues for the quarter decreased from $627,780 in 2014 to $252,780 in 2015, Dec said. Also, net product sales of the company's legacy Argus system were down from around $300,000 in Q1 last year to roughly $200,000 in 2015.
In spite of the drop in Q1 revenues, Evan Jones, the company's chairman and CEO, described the weeks following the announcement of the OpGen IPO as "productive," noting that the company raised sufficient capital to support the Acuitas product suite and to continue pilot programs at major hospital centers.
"We expect in the coming months to convert several of these centers into customers as they implement our Acuitas MDRO Gene Test to help identify and manage patients who are colonized or infected with life-threatening, drug-resistant organisms," he said in a statement.
Jones said during the call that the company expects to have six to eight hospital accounts by the end of the year. These accounts are expected to impact the company's revenues beginning in the third quarter of this year, he said.
Other milestones for the company include obtaining an unrestricted New York State testing license for its Acuitas tests by the end of Q1 2016, Jones said.
OpGen's R&D expenses for Q1 were $1.1 million compared to $952,791 for the same period a year ago, while its SG&A for the quarter was about $1.8 million compared to about $1.1 million for the prior year.
The firm's net loss for the three months ended March 31 was $2.6 million, or $5.61 per share, compared with a net loss for the first quarter of 2014 of $1.2 million, or $3.62 per share.
The company had cash and cash equivalents of $631,695 as of the end of the quarter.
The company also recently hired Kevin Krenitsky to serve as president. He joined the company from Foundation Medicine and will oversee the commercial rollout of the Acuitas product portfolio, Jones noted during the conference call.
OpGen went public in May, raising $17.1 million in gross proceeds.
Also, in February this year, OpGen stated that it had raised more than $1.2 million toward a targeted $1.5 million in a private financing round.