NEW YORK – Point-of-care testing firm Talis Biomedical reported after the close of the market Monday that its third quarter revenues dropped sharply as grant funding dried up.
For the three months ended Sept. 30, the Menlo Park, California-based company reported grant revenues of $218,000 compared to $9.5 million in Q3 of 2020, well short of analysts' average estimate for revenues of $1.5 million. The company reported no other revenues.
"As we are launching both an assay and new instrument system for the first time under [Emergency Use Authorization], we will execute a controlled product rollout," Kim Popovits, the firm's interim CEO, said in a statement. "We believe this measured approach will drive long-term adoption and success as we continue to develop a broad menu of tests to address the significant and unmet needs of the respiratory, sexual health, and women’s health testing markets we plan to serve."
In parallel with reporting its financial results, Talis said that on Dec. 1, Brian Blaser will become its director, president, and CEO and Popovits will rejoin its board of directors.
Blaser has more than 25 years of senior leadership experience in the in vitro diagnostics industry, including 17 years at Abbott Laboratories, where he led its global diagnostics organization, including core laboratory, point of care, rapid diagnostics, and molecular diagnostics businesses, Talis said.
The firm noted that it recently obtained Emergency Use Authorization from the US Food and Drug Administration for its Talis One COVID-19 point-of-care test. In a clinical study, the test showed 100 percent concordance with comparator test results, including positive and negative percent agreements, Talis said.
It conducted a separate bioinformatic analysis for the Delta variant and tested in vitro transcript samples to support the EUA submission. In testing for all variants, including Delta, it detected no loss in sensitivity or impact on the test, the firm said.
"With the EUA in hand, we have turned our attention toward the steps required to execute a controlled product rollout of the Talis One system, a platform that is intended to serve customers across multiple infectious diseases over time," Popovits said on a conference call to discuss the firm's financial results.
With the COVID assay, prospective customers can now gain experience with its molecular diagnostic instrument, but Talis intends to take a measured approach "to ensure we deliver an experience that will drive long-term system adoption," she said.
Talis said that it recently completed feasibility testing for a Chlamydia trachomatis and Neisseria gonorrhoeae assay. It anticipates starting external validation studies for the assay in Q3 2022 with the aim of pursuing 510(k) clearance.
The company also expects to apply for FDA EUA for its COVID-flu test toward the end of this year with a goal of obtaining authorization in time for the 2022/2023 flu season.
The firm reported a Q3 net loss of $38.4 million, or $1.49 per share, compared to a net loss of $29.5 million, or $13.90 per share, in Q3 2020, short of analysts' average estimate for a loss of $1.40 per share. The company, which went public earlier this year, used 25,787,101 weighted average shares to calculate its loss-per-share figure for Q3 compared to 2,122,981 in the prior-year quarter.
Its Q3 R&D expenses fell 28 percent year over year to $25.8 million from $36.0 million, while its SG&A costs rose more than fourfold year over year to $12.8 million from $3.1 million.
Talis had $273.6 million in cash and cash equivalents at the end of the quarter.
Roger Moody, the firm's CFO, said on the conference call that Talis is starting to see the benefits from its investments including "establishing a robust pipeline of potential customers, advancing toward automated consumables manufacturing, and having ample components on hand to build instruments."
The company does not expect any material product revenues this year, he added.
In Tuesday morning trading on the Nasdaq, Talis shares were down more than 11 percent to $5.16.