NEW YORK (GenomeWeb) – NanoString Technologies reported after the close of the market on Wednesday that third quarter revenues rose 53 percent year over year.
For the three months ended Sept. 30, Seattle-based NanoString's total revenues increased to $23.9 million from $15.7 million in the prior-year period, beating the average Wall Street estimate of $23.5 million.
On a conference call with analysts following the release of the earnings, NanoString CEO Brad Gray said that the firm's instrument sales are up sharply. "We continued to execute well during the third quarter, generating strong growth across our business while advancing our product pipeline and partnerships," Gray added. "Instrument sales nearly doubled, underscoring how effectively Sprint has helped us reach new customers."
Instrument revenues jumped 62 percent to $6.9 million from $4.3 million, driven by sales of the new nCounter Sprint Profiler. Consumables revenues, excluding the Prosigna breast cancer test, rose 23 percent to $10.3 million from $8.4 million. Prosigna revenues were up 73 percent to $1.1 million from $662,000 and collaboration revenue increased to $4.8 million from $1.8 million.
NanoString said its installed base of nCounter systems increased to approximately 450. According to Gray, the company sold 20 Sprint profilers, mostly to the academic market, tallying approximately half of new instrument sales.
Gray also announced a new direction for NanoString's multiplexed digital immunohistochemistry (IHC) technology, noting that it is now being developed into what the company is calling digital spatial profiling. The firm presented proof-of-concept data on the technology earlier this year — it allows spatial profiling of RNA expression as well as proteins. NanoString plans to develop a digital spatial profiling instrument, which will fit in "upstream of nCounter" in the NanoString analysis pipeline, Gray said, and has already begun enlisting pharmaceutical companies and academic labs into an early access program to inform design, with three pharma firms signed up prior to the official launch.
Gray further noted that the number of pharmaceutical companies interested in collaborating with NanoString on various projects continues to grow. The recent approval of Merck's Keytruda as a first-line non-small cell lung cancer treatment and the failure of Bristol Myers Squibb's Checkmate 26 trial have "highlighted the importance of having the right biomarker strategy," he added. "Business dialogs have accelerated in recent months."
Gray also said that the firm saw several important payors issue positive coverage decisions for Prosigna, including Emblem Health and several Blue Cross Blue Shield plans.
The firm's Q3 net loss widened to $10.1 million, or $.51 per share, compared to a loss of $9.5 million, or $.49 per share, in Q3 2015, narrowly beating the consensus Wall Street estimate for a loss of $.52 per share.
NanoString's R&D spending in the quarter increased 50 percent to $8.7 million from $5.8 million in Q3 2015, driven by costs related to biopharma collaborations and new product development. Its SG&A costs increased 30 percent to $15.6 million from $12.0 million, attributable to added staff, increased legal and professional fees, and increased taxes for revenues received from collaboration agreements.
NanoString finished the quarter with $10.5 million in cash and cash equivalents, and $43.1 million in short-term investments.
The firm reiterated its full-year guidance for revenues of $89 million to $93 million, and a net loss per share of $2.15 to $2.30. Analysts on average expect revenues of $90.6 million and a loss of $2.25 per share for the year.
In morning trading on the Nasdaq, shares of NanoString were up nearly 6 percent at $19.44.