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BG Medicine's Heart Test Powers 175 Percent Revenue Growth in Q4

NEW YORK (GenomeWeb News) – BG Medicine today reported a 175 percent increase year over year in revenues for the fourth quarter as product revenues increased more than three-fold.

The Waltham, Mass.-based firm said that revenues for the three months ended Dec. 31, 2012 totaled $1.1 million, up from $379,000 a year ago and beating the average analyst estimate of $940,000. Product revenues increased to $978,000 from $307,000 a year ago, and service revenues rose to $94,000 from $72,000, a 31 percent jump.

"We are pleased with the success we had in the fourth quarter of 2012 in realigning our strategy and commercial organization to better drive sales of the BGM Galectin-3 test as a critical tool in the assessment of heart failure disease," Eric Bouvier, president and CEO of BG Medicine, said in a statement.

In November, the company announced a rejiggered focus to accelerate adoption of its cardiovascular diagnostic tests.

"With a number of important growth drivers in place for 2013, we are well-positioned to build on this growth in the months and years ahead," Bouvier added today.

For the quarter, BG Medicine posted a net loss of $2.9 million, or $.14 per share, compared to a net loss of $4.7 million, or $.23 per share, a year ago. The consensus Wall Street estimate was for a loss of $.32 per share.

Results for the recently completed quarter include reversals of accrued expenses totaling $2.4 million, consisting of R&D costs of $1.5 million and bonus expenses of $800,000. The adjustments were partially offset by $700,000 of expenses related to severance expenses, the company said.

As a result, BG Medicine recorded a gain of $80,000 in R&D during Q4 2012, compared to a cost of $2.0 million a year ago. Its SG&A costs increased 21 percent year over year to $3.5 million from $2.9 million in Q4 a year ago.

The firm also took non-cash charges of $569,000 for stock-based compensation expenses and depreciation and amortization expenses. In the year-ago period, BG Medicine recorded non-cash charges of $672,000.

For full-year 2012, revenues increased 75 percent to $2.8 million from $1.6 million, BG Medicine reported, surpassing the consensus analyst estimate of $2.7 million. Product revenues jumped to $2.6 million from $451,000 a year ago, offsetting a sharp decline in service revenues to $245,000 from $1.2 million a year ago.

The company's net loss widened to $23.8 million, or $1.18 per share, from $17.6 million, or $1.00 per share, a year ago, beating the average Wall Street estimate of a loss of $1.36 per share.

BG Medicine took a non-cash charge of $2.8 million for 2012 related to stock-based compensation costs and depreciation and amortization expenses, it said. In 2011, it took a non-cash charge of $2.4 million.

Its R&D costs in 2012 dropped 5 percent to $7.6 million from $8.0 million in 2011, while SG&A expenses shot up 62 percent to $17.0 million from $10.5 million.

The company discontinued pursuing US Food and Drug clearance for its BGM Galectin-3 test for assessing the risk of developing new onset heart failure, after determining it could not address questions from the agency about its test before the FDA's deadline. It continues to evaluate its options for submission of a new 510(k) application, the company said today.

BG Medicine also said today that Fujirebio Diagnostics withdrew its 510(k) submission to the FDA for an automated version of the BGM-Galectin 3 test that it was developing for Abbott. However, a new submission is anticipated to be filed in the second half of 2013 that will address FDA's questions and comments, BG Medicine said.

The company's original galectin-3 test, for use as an indicator of heart failure, received FDA clearance in late 2010.

Most recently, the company raised $12.8 million in a public offering in January. The same month it also entered in an agreement with Aspire Capital Fund for the purchase of up to $12 million of BG Medicine stock.

The company ended 2012 with $12.8 million in cash and cash equivalents, and $390,000 in restricted cash.

"The substantial progress we made in 2012 has positioned us to drive commercial growth in 2013 and beyond," Bouvier said. "Galectin-3 test sales are expected to benefit due to the increase in the number of specialized and regional lab providers with which we have partnered from three to seven, the US sales force targeting customers focused on reducing hospital readmissions in light of recently imposed Medicare penalties, and the anticipated continued commercial progress of our IVD partners, BioMérieux and Abbott, in Europe.

"We also expect to launch the CardioScore test in Europe during the first half of 2013 through specialty lab partners, and expect to complete the medical review of data from the BioImage study, which will then guide our regulatory and commercial strategy for CardioScore in the US," he added.