NEW YORK (GenomeWeb News) – Cepheid reported after the close of the market Thursday that its fourth-quarter revenues rose 36 percent on particularly strong clinical systems sales.
The Sunnyvale, Calif.-based molecular diagnostics firm reported total revenues of $80.1 million for the three-month period ended Dec. 31, up from $58.7 million for Q4 2010. Cepheid easily beat analysts' consensus estimate for revenues of $73.7 million.
The firm's clinical systems sales were $19.9 million, up 58 percent from $12.7 million, and its clinical reagents revenue jumped 33 percent to $49 million from $36.8 million. Non-clinical sales were $8 million versus $6.7 million for the fourth quarter of 2010. Other revenues were $3.2 million, up from $2.6 million.
Cepheid placed 175 GeneXpert systems in its commercial clinical business during the quarter, as well as 181 systems as part of the High-Burden Developing Country (HBDC) program. Company officials said on a conference call that the HBDC program contributed $9 million in fourth-quarter revenues.
Cepheid posted a net loss of $1.6 million, or $.03 per share, compared to a profit of $2.6 million, or $.04 per share, for the fourth quarter of 2010. On a non-GAAP basis, Cepheid posted net income of $9.4 million, or $.14 per share, compared to non-GAAP net income of $6.1 million, or $.09 per share, for Q4 2010. Analysts had expected EPS of $.01.
The non-GAAP figures exclude stock compensation expenses and a non-cash charge of $5.4 million in Q4 2011 related to the termination of a patent license and amortization of acquired intangibles.
The firm's R&D spending increased 43 percent to $16.7 million from $11.7 million, and its SG&A expenses increased 41 percent to $24.7 million from $17.5 million.
For full-year 2011, Cepheid brought in total revenues of $277.6 million, a 31 percent increase over revenues of $212.5 million in 2010. It beat Wall Street's consensus estimate of 271.2 million.
Cepheid's clinical systems sales rose 38 percent to $58.6 million, and its clinical reagents sales increased 35 percent to $177.4 million. Non-clinical sales for the year declined 11 percent to $29.5 million.
For the full year, Cepheid placed a total of 565 GeneXpert systems in its commercial clinical business and an additional 418 GeneXpert systems as part of the HBDC program.
"We continued to broaden our market opportunity with the addition of new Xpert tests including our Xpert Flu panel, C. diff/Epi in the US, and our improved Xpert BCR-ABL test outside of the US, and critically we continue to work aggressively on development of our future test menu," Cepheid CEO John Bishop said on the conference call.
Its profit for the year was $2.6 million, or $.04 per share, versus a loss of $5.9 million, or $.10 per share, for 2010. On a non-GAAP basis, Cepheid's net income for the year was $29.6 million, or $.44 per share, compared to non-GAAP net income of $12.5 million, or $0.20 per share, for full-year 2010. Analysts had expected $.08 per share.
Cepheid's R&D expenses for the year jumped 40 percent to $59.4 million from $42.5 million, and its SG&A costs increased 37 percent to $86.7 million from $63.4 million.
Bishop noted on the call that the firm has taken steps in the last few weeks to extend the reach of its direct sales operations into Germany and South Africa. He said Cepheid "acquired our business segment from our distribution partner there in early January. We also intend to complete the acquisition of our distributor in South Africa during the first quarter."
The firm will spend a total of around $18 million on those two acquisitions in the first quarter of this year.
Cepheid's pipeline of tests remains on track with its chlamydia/gonorrhea test expected to be launched in the EU in the first half of 2012 and in the US in the second half of the year. Its methicillin-resistant tuberculosis test is targeted for a submission with the US Food and Drug Administration this year with a commercial launch expected in 2013-2014, Bishop noted on the call.
He also said that Cepheid will make a flu assay the initial entry for their CLIA-waived tests, instead of their original plans for a CLIA-waived MRSA test. The flu test is now expected to be launched for the 2013-2014 flu season, a year ahead of schedule.
Bishop said the firm believes the flu test offers "a significantly larger market opportunity, and has the potential to open other strategic market approaches."
In addition, he said that Cepheid inked new five-year contracts with Northrop Grumman and the US Postal Service for the purchase of Anthrax test cartridges and associated materials for use in biohazard detection systems in US postal facilities nationwide. Cepheid began supplying the USPS with GeneXpert systems and Anthrax cartridges in 2004. To date, more than 10.5 million tests have been run with no false positives, said Bishop.
Cepheid finished the year with $115 million in cash and cash equivalents.
The firm expects FY 2012 revenues to be between $ 333 and $347 million, which would represent growth of between 20 and 25 percent. It expects EPS of $.17 to $.24 per share, or $.55 to $.60 on a non-GAAP basis.
"We feel it prudent to remain cautious about the capital spending environment and the economy in general, especially in Europe," Cepheid CFO Andrew Miller said on the call.
Shares of Cepheid closed up 6 percent at $43.14 in Friday trade on the Nasdaq.