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NanoString Posts 47 Percent Q3 Revenue Growth

NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market Tuesday that its third quarter revenues increased 47 percent year over year as the firm beat analysts' consensus estimate on the top and bottom line.

The Seattle-based developer of molecular diagnostics and genomic research tools brought in total revenues of $12.3 million for the three months ended Sept. 30, up from $8.4 million in Q3 2013 and above the average Wall Street estimate of $11.8 million.

Its instrument revenue climbed to $4.5 million from $3.6 million, while its consumables revenue jumped to $6 million from $4.4 million. Sales of in vitro diagnostic kits were $270,000 for the quarter compared to $41,000 in the comparable period a year ago, and its services revenue increased to $488,000 from $420,000.

The firm said that it now has a base of more than 230 nCounter Analysis Systems installed.

NanoString President and CEO Brad Gray noted on a conference call following the release of the results that the firm's annualized consumables pull-through is running "well above" $100,000 per system. "Our consumable growth was also driven in part by the success of two recent pan-cancer panel launches, which together illustrate our distinctive capabilities in the field of cancer biology," Gray said on the call.

"Momentum in our life science research business continues, driven by instrument placements, record consumable revenue, and strong demand for our PanCancer Pathway and Immune Profiling Panels," Gray added in a statement. "Our companion diagnostic collaboration with Celgene is progressing ahead of plan, resulting in an accelerated milestone achievement during the quarter."

The PanCancer Immune Profiling Panel was launched in September, Gray noted. It complements the firm's PanCancer Pathway panel "and brings a new dimension of gene expression information to a field that historically has been focused on protein-based and analytical methods, such as immunohistochemistry," he said.

Earlier this year, NanoString launched its Prosigna Breast Cancer Prognostic Gene Signature Assay services. The assay runs on NanoString's nCounter Dx Analysis System and is based on the PAM50 gene signature. It assesses the gene expression profile of cells found in a woman's breast cancer tissue.

NanoString noted that reimbursement coverage for Prosigna services thus far covers approximately 45 million US lives, which represents coverage of approximately 20 percent of indicated patients.

The firm posted a net loss of $12.1 million, or $.67 per share, for the quarter compared to a loss of $7.7 million, or $.53 per share, for Q3 2013. On a non-GAAP basis, its net loss was $.54 per share, besting the average Wall Street estimate for a loss of $.56 per share.

NanoString's R&D spending increased 58 percent year over year to $6 million from $3.8 million, and its SG&A costs were up 56 percent to $12.5 million from $8 million.

The firm finished the quarter with $18.8 million in cash and cash equivalents and $48.7 million in short-term investments.

In Wednesday morning trade on the Nasdaq, shares of NanoString were up 2 percent at $10.44.