NEW YORK (GenomeWeb News) – Luminex reported after the close of the market Monday that its second-quarter revenues grew 12 percent year over year, driven by a 24 percent spike in its assay revenue.
The Austin, Texas-based molecular diagnostics firm reported total revenues of $54.3 million for the three months ended June 30, compared to $48.3 million for the second quarter of 2012. It inched past analysts' consensus estimate for revenues of $54.2 million.
Despite the results being in line with expectations, the firm's shares dropped on Tuesday morning as reimbursement issues lead the company to believe it will come in at the low end of its revenue guidance.
Luminex said that its systems sales fell 9 percent year over year to $7.6 million from $8.4 million, while consumables sales were up 9 percent to $11.8 million from $10.8 million, royalty revenue increased 11 percent to $8.6 million from $7.7 million, and assay revenue climbed to $21.7 million from $17.5 million. All other revenues were $4.6 million, up 20 percent from $3.9 million in Q2 2012.
"Growth in assay revenue was well balanced across our genetic and infectious disease franchises and included a notable contribution from our recent US IVD cleared xTAG gastrointestinal pathogen panel," Luminex President and CEO Patrick Balthrop said in a statement. "This performance also reflects a positive impact from the Company's transition to a direct molecular diagnostic sales force which began in early 2013."
Sales of Luminex's infectious disease assays, such as its Respiratory Viral Panel and its Gastrointestinal Pathogen Panel, represented 68 percent of total assay sales in Q2, Luminex CFO Harriss Currie said on a conference call following the release of the Q2 results. The remaining 32 percent of assays sold consisted of Luminex's genetic testing assays, including its cystic fibrosis and pharmacogenomics assays, such as its CYP2D6 panel. The US Food and Drug Administration earlier this month cleared a new version of Luminex's xTAG CYP2D6 assay for clinical use.
Currie noted that Luminex sold 266 multiplexing systems in Q2, split almost evenly between sales of its higher-throughput LX units and benchtop MagPix units.
Luminex posted net income of $3.7 million, or $.09 per share, for the quarter, compared to $3 million, or $.07 per share, for Q2 2012. On a non-GAAP basis, its net income was $7.2 million, or $.17 per share, compared to $6.3 million, or $.15 per share. It beat the consensus Wall Street estimate of $.10 per share.
The firm's R&D spending for the quarter increased 17 percent to $11.8 million from $10.1 million, while its SG&A expenses climbed 21 percent to $20.2 million from $16.7 million.
During the quarter Luminex announced that Natural Molecular Testing had selected the firm's xMAP platform for the development and commercialization of a personalized medicine panel that comprises 42 targets, such as CYP450 2C19; CYP450 2C9; VKORC1; Factor II; and Factor V Leiden, among others.
Luminex finished the quarter with $37.5 million in cash and cash equivalents and $5.5 million in short-term investments.
The firm reaffirmed its full-year 2013 revenue guidance of $220 million to $230 million. However, it noted that the reimbursement environment for certain molecular diagnostic tests could have an impact on its performance, "as considered in the lower end of this revenue range."
Lab testing firms have experienced delays in receiving reimbursement, as well as lower reimbursement, for some molecular diagnostics tests this year after the Centers for Medicare & Medicaid Services switched to the gap-fill process for pricing new codes for molecular diagnostics.
Last week, Sequenom Chairman and CEO Harry Hixson noted the difficulties the coding changes have caused. "Several payors are requesting additional information to process claims for services, and certain payors, including most state and Medicaid plans, have not implemented the new codes or in some cases are no longer providing coverage for certain tests," he said on the firm's Q2 conference call.
On the conference call Balthrop portrayed the issues impacting test reimbursement as temporary and "transient." He said that the "current situation lacks consistency and transparency across payors and regions, making the details and timing of resolution difficult to predict."
He also stressed that because of differences in the way its infectious disease assays and genetic disease assays are reimbursed, the reimbursement issues were primarily affecting Luminex's genetic disease assays, which generated about a third of all assay sales in Q2.
In early Tuesday trade on the Nasdaq, shares of Luminex were down 10 percent at $20.97.