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HTG Molecular Diagnostics Q1 Revenues Drop 36 Percent

NEW YORK – HTG Molecular Diagnostics reported after the close of the market on Thursday a 36 percent year-over-year drop in its first quarter revenues, driven by the closure of customer facilities due to the COVID-19 pandemic.

For the quarter ended March 31, the Tucson, Arizona-based firm's revenues fell to $1.4 million from $2.2 million a year ago, in line with its reported preliminary revenues.

Revenues from product and product-related services fell 30 percent to $1.4 million from $2.0 million a year ago. The firm reported no collaborative development services revenue for the quarter, compared to $237,337 a year ago.

"In the fourth quarter of 2020, our base business showed signs of recovery after experiencing a substantial impact from COVID-19 in the second and third quarters of 2020," John Lubniewski, CEO of HTG, said in a statement. "The reopening process stalled again in the first quarter of 2021 in Europe and our pharmaceutical company customers have continued a slow return to pre-COVID-19 clinical trial levels."

On a conference call with investors following the release of earnings, Lubniewski noted that HTG added 13 new customers and 24 new pharma programs in the quarter, bringing the firm to a total of 68 active programs. He said that the customer base will be "far more decentralized" and include "many new markets" in addition to oncology. 

During the quarter, HTG published a second white paper characterizing its planned transcriptome panel using its HTG EdgeSeq technology. The firm said that it currently has 25 collaborators participating in the early-adopter program for the transcriptome panel.

"We believe the benefits of our HTG EdgeSeq technology and the transcriptome panel, including ease of use, cost savings, turnaround time, and broad applicability, will make this a very attractive alternative for gene expression profiling applications," Lubniewski said. "Data published in our second white paper highlight the potential of this panel as a robust, clinically deployable alternative to RNA-Seq for gene expression profiling."

Lubniewski said that HTG plans to launch a third white paper that will include the "final configuration" of the whole transcriptome product and a "bigger dataset" that supports the second white paper.

HTG slashed its net loss in Q1 to $4.6 million, or $0.80 per share, from $5.5 million, or $1.27 per share, a year ago. 

The firm's R&D spending during the quarter fell 26 percent to $1.4 million from $1.9 million, and its SG&A expenses fell 17 percent to $3.9 million from $4.7 million in the year-ago period.

HTG finished the quarter with $21.8 million in cash and cash equivalents and $9.0 million in short-term investments.

Lubniewski said that the firm will focus the remainder of the year on building its translational profiling business, as well fleshing out a pharma pipeline of active programs and offering the transcriptome product as a platform for collaborations and companion diagnostic development. 

In early Friday morning trading on the Nasdaq, HTG's stock was up about 1 percent at $3.75.