NEW YORK— HTG Molecular Diagnostics reported after the close of the market on Tuesday that its second quarter revenues dropped 66 percent year over year.
For the three months ended June 30, the Tucson, Arizona-based firm reported revenues of $2.0 million compared to $5.8 million in the same period the year before, beating the Wall Street estimate of $1.8 million. The firm attributed the decrease to the impact of the COVID-19 pandemic, which required the closure of customer facilities around the globe during the quarter.
Revenues from products and product-related services, including the sales of instruments and consumables, dropped 61 percent to $1.7 million from $4.4 million. In addition to the impact from COVID-19, the firm noted that the decrease reflected a decline in lower margin subcontracted laboratory services revenue.
Revenues from collaborative development programs plummeted 86 percent to $200,000 from $1.4 million in the year-ago quarter.
In a conference call with investors following the release of earnings, HTG Molecular CEO John Lubniewski acknowledged that the firm expects to see several of its active programs in biopharma time out due to work-from-home restrictions. He said that the firm finished the quarter with 67 active programs, a net loss of 21 programs from the end of 2019.
Despite having 32 programs time out, Lubniewski highlighted that HTG added 11 programs and extended 18 programs with biopharma customers that have partially reopened — in addition to collaborating with two new biopharma customers — in the first half of 2020.
Earlier this week, HTG signed a 10-year commercialization and distribution agreement with Qiagen. Lubniewski noted that the agreement will now allow HTG to directly contract future companion diagnostic development programs with biopharma clients, while Qiagen will have distribution options for the end companion diagnostic.
"The COVID-19 pandemic continued to have a negative impact on our business and that of our customers in the second quarter 0f 2020, and we believe it will continue to have a negative impact likely through at least the remainder of 2020, as a number of our larger customers have communicated their intentions to remain operating at partial capacity or with limited external visitors through the end of the year," Lubniewski added.
At the same time, Lubniewski said that HTG has seen a number of its academic customers in Europe and the US return to their laboratories, resume planned studies with the firm's technology, and start new projects that the firm has been discussing since earlier this year.
HTG's net loss in the second quarter rose to $5.7 million, or $.09 per share, from $4.8 million, or $.17 per share. The firm missed analysts' consensus loss per share estimate of $.08.
The firm's R&D spending in the quarter dropped 48 percent to $1.7 million from $3.3 million, while its SG&A costs fell 8 percent to $4.3 million from $4.7 million.
HTG ended the quarter with cash and cash equivalents of $21 million and short-term investments of $11.9 million.
In June, the firm secured a $10.0 million senior term loan from Silicon Valley bank to pay off principal balances on HTG's term loan with MidCap Financial and its subordinated convertible promissory note held by Qiagen.
HTG also signed three distribution agreements with BioNordika, Explorea, and Elta 90 in June to promote the firm's products in Nordic and Eastern European countries.
Lubniewski said that HTG expects to have a white paper on its whole-transcriptome product — which it previously built a research lab for in San Carlos, California — near the start of Q4 this year. The firm anticipates fully commercializing the product in mid-2021 in a research-use-only capacity, followed by a universal diagnostic companion diagnostic for its pharma services offering.
In Wednesday morning trading on the Nasdaq, HTG's stock was down 10 percent at $0.58