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Nanosphere Q3 Revenues Climb 54 Percent

NEW YORK (GenomeWeb) – Nanosphere said after the close of the market on Wednesday that its third quarter revenues improved 54 percent year over year.

The Northbrook, Ill.-based firm reported total revenues of $3.7 million — matching a preliminary figure that it announced last month — and up from $2.4 million in the year-ago quarter as consumables sales more than doubled. Wall Street had estimated $3.4 million in revenues, on average. The firm had 30 new instrument placements during the third quarter bringing the number of new placements for the year to date to 115.

On a conference call following the release of Nanosphere's financial results, the company's CEO and President Michael McGarrity said that in addition to consumables sales growth, adoption of the firm's test for detecting gram-negative bacteria that causes blood stream infections continued to ramp up.

The test was cleared by the US Food and Drug Administration at the start of the year. Roger Moody, Nanosphere's CFO, added on the call that about half of its 150 gram-positive test customers have adopted the gram-negative test.

In September, Nanosphere said it was exploring potential strategic alternatives and had hired Jefferies as an advisor. McGarrity said on Wednesday that the process is ongoing but declined further comment.

Nanosphere has been developing a next-generation version of its Verigene platform and during the Association for Molecular Pathology conference next week, the firm plans to show a prototype of the new instrument, McGarrity said.

Also in Q3 2014, the company received a warning letter from Nasdaq saying the company's closing bid price on its shares had fallen below a minimum $1 per share price for the previous 30 days, putting the company at risk of getting delisted. Subsequently, the firm's shares moved from the Nasdaq Global Market to the Nasdaq Capital Market, which has lower listing requirements than the Nasdaq Global Market.

Additionally, the FDA provided 510(k) clearance for additional targets on Nanosphere's enteric pathogens molecular diagnostics test.

Nanosphere had a net loss of $9.6 million in Q3 2014, or $.13 per share, compared to a net loss of $9.4 million, or $.16 per share, in the year-ago period, just above the average analyst estimate of a loss of $.14 per share.

In September 2013, the firm raised $27.7 million in a public offering of its shares, and last week Nanosphere closed on another public offering that is expected to bring in $18.4 million.

Nanosphere's R&D spending was up 10 percent to $5.5 million in Q3 2014, compared to $5.0 million in Q3 2013. Its SG&A costs inched up 2 percent to $5.1 million from $5.0 million.

The company finished the quarter with $12.5 million in cash and cash equivalents.

On the call, McGarrity said that the company is confident that it will achieve $14 million in revenues for full-year 2014 that Nanosphere guided to when it announced its second quarter financial results in August. The company had previously guided to a range of between $19 million and $21 million. He added that Nanosphere anticipates doubling its instrument placements in the fourth quarter compared to Q3 2014.

"Our growth is fueled by conversion of gram-positive customers and expanded utilization of menu into that base. We have evidence of both of those growth drivers in Q3 and early Q4," McGarrity said.

Shares of Nanosphere were down around 1 percent at $.44 in Thursday morning trade on the Nasdaq.