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Roka Bioscience Q4 Revenues Rise 7 Percent

NEW YORK (GenomeWeb) – Roka Biosciences reported after the close of the market Friday that its fourth quarter revenues rose 7 percent from the fourth quarter of 2014.

For the three-month period ended Dec. 31, the molecular diagnostics firm reported revenues of $1.5 million compared to $1.4 million in the same period the year before.

At the end of the quarter, the company said it had 41 instruments placed with customers under commercial agreements, up from 38 instruments at the end of Q4 2014. On a conference call with analysts following the release of the results, CEO Paul Thomas said the launch of Roka's new listeria environmental assay will reignite customer adoption of Atlas instruments in coming quarters. 

Chief Commercial Officer Mary Duseau added that recent examples of food recalls in the news highlight the importance of listeria testing. She said that Hershey has recently become an Atlas customer, and that the placement will be counted in the company's Q1 2016 earnings report.

Roka's Q4 net loss widened to $10.0 million, or $.58 per share, from $7.4 million, or $.43 per share, the year before.

The firm's SG&A costs in the quarter rose 29 percent to $6.3 million from $4.9 million year over year, while its R&D spending in the quarter stayed relatively flat at $1.9 million.

For the full year, Roka's revenues rose 18 percent to $6.0 million from $5.1 million in 2014.

The firm's net loss widened to $36.6 million from $32.2 million, but its EPS loss narrowed to $2.12 per share from $2.93 per share a year ago on a higher share count.

Roka's SG&A expenses in 2015 rose 14 percent to $21.8 million compared to $19.1 million the year before, while R&D costs fell 3 percent to $7.7 million from $7.9 million.

The company ended the year with cash and cash equivalents of $3.4 million, and short-term marketable securities of $28.8 million.

On the call, the firm said it would not provide guidance for the next quarter or full year due to difficulties in forecasting because of the rollout of the listeria assay. However, when asked by an analyst whether the firm expected to see positive instrument placements in Q1, company executives said yes. Thomas further noted that he expects instrument placements will come in advance of revenue growth throughout 2016.

On Monday, Leerink downgraded Roka stock to Market Perform from Outperform, and lowered its price target to $1 from $2, citing the "fundamental challenge of commercializing new technology in food testing" that the company faces. 

"We believe Roka's instrument placement trajectory will continue to trend positively," wrote Leerink analyst Dan Leonard in his note. "However, the sales cycle in food pathogen testing continues to strike us as long and complex. Additionally, we believe that Roka's visible cash burn could make new customer targets increasingly cautious and hinder faster adoption." The investment bank now believes the firm will capture around 5 percent of the molecular food pathogen testing market in North America by 2018, down from a previous estimate of 8 percent.

Roka's shares fell 26 percent to $.80 in Monday morning trading on the Nasdaq.