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Cepheid Reports 15 Percent Rise in Q3 Revenues

NEW YORK (GenomeWeb) — Cepheid reported after the close of market on Thursday a 15 percent spike in third quarter revenues as the company beat consensus analyst estimates on both the top and bottom lines.

For the three months ended September 30, Cepheid logged revenues of $115.2 million, a 14 percent increase over $100.1 million in the same quarter last year, and beating the average Wall Street estimate of $110 million.

The Sunnyvale, Calif.-based molecular diagnostic firm's total clinical revenues were up 17 percent at $107.1 million, as clinical systems revenues edged downward 3 percent to $17 million from $17.5 million in the year-ago period, but clinical reagents revenues jumped 21 percent to $90.1 million from $74.4 million.

Cepheid said that it installed a total of 173 GeneXpert molecular diagnostic systems through its commercial clinical business, and an additional 284 GeneXpert systems through its high-burden developing country program. Cepheid said that it has now placed a cumulative 7,553 GeneXpert systems worldwide.

"We continued to make solid progress on our strategic initiatives in the third quarter, broadening our test menu, growing our installed base to more than 7,500, penetrating the independent lab market with the addition of two major national US reference lab customers, and extending our technology lead," Cepheid Chairman and CEO John Bishop said in a statement. "With renewed momentum in North America, continued strength in international, our first virology test expected before the end of the year, and growing interest in our sexual health portfolio, we believe that Cepheid is entering a prolonged growth phase."

Expanding on his statement during an earnings call on Thursday, Bishop noted that commercial clinical test revenue grew $14 million, or 23 percent, in Q3, driven by growth in hospital-acquired infections, chlamydia/gonorrhea, Group B Streptococcus, and tuberculosis, in that order.

"HAI revenue grew in the low-double digits year over year, and represented the largest dollar contributor to growth, while Xpert CT/NG more than doubled from a year ago with revenue of approximately $7 million," Bishop said. "Xpert GBS benefitted from the ramp of a new high-volume reference lab customer, resulting in revenue more than doubling year over year. And commercial Xpert MTB/RIF grew more than 50 percent from a year ago."

Cepheid posted a net loss for the quarter of $7.2 million, or $.10 per share, compared to $1.4 million, or $.02 per share, in the year-ago period. On average, Wall Street had estimated a net loss of $.16 per share.

Cepheid's R&D expenses totaled $23.5 million, up 26 percent from $18.6 million in Q3 2013. Meantime, the company tallied $37 million in SG&A expenses, also up 26 percent from $29.2 million in the year-ago period.

Cepheid ended the quarter with cash and cash equivalents of $134.7 million and short-term investments of $164.9 million.

The firm updated its full-year 2014 guidance to total revenue in the range of $461 million to $465 million, up from an expected range of $452 million to $461 million following release of its second quarter earnings. The company also said that its net loss is expected to be between $.54 and $.52 per share, similar to previous guidance.