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OpGen Q2 Revenues Drop 64 Percent as Business Focus Continues to Shift

NEW YORK (GenomeWeb) – OpGen reported after the close of the market on Thursday a 64 percent dip in its second quarter revenues.

For the three months ended June 30, the Gaithersburg, Maryland-based microbial genetics testing and analysis firm reported $375,146 in revenues, down from $1.1 million for the same quarter a year ago.

OpGen's Q2 product sales rose to $319,171 from $272,538 in the year-ago period, while its laboratory services sales fell to $28,195 from $121,899. Meantime, revenues from collaborations fell to $27,780 from $677,780 year over year.

As it did in Q1, the company attributed the overall revenue dip to the shift in its business focus from sales of its legacy Argus Optical Mapping System to providing solutions for molecular testing and analysis for multi-drug-resistant organisms, as well as to reduced contract R&D funding as an existing partnership with Hitachi High Technologies wraps up. As a result of the shift, OpGen expects to record year-over-year revenue declines for the rest of 2015 and to begin recording revenue growth in 2016, CFO Tim Dec said in a statement.

OpGen's net loss available to common stockholders in the quarter was $5.4 million, or $.84 per share, compared to $1.6 million, or $4.49 per share, for the same period a year ago.

OpeGen went public in May 2015, and used about 5.4 million shares to calculate its loss on a per-share basis in Q2 2015, compared to 362,537 shares in the year-ago quarter.

The company's R&D expenses totaled $1 million in Q2, compared to $1.2 million a year ago; while SG&A expenses more than doubled to $2.3 million from $1.1 million in Q2 2014

OpGen had cash and cash equivalents of $10.2 million as of June 30.

Last month, OpGen announced that it had reached a deal to acquire molecular diagnostics firm AvanDx for an undisclosed amount. During the call, Dec said the company would not provide detailed financial information about the new business pending the submission of documents related to acquisition with the US Securities and Exchange Commission. However, Evan Jones, OpGen's chairman and CEO, noted during the call that AvanDx had approximately $1.8 million to $2.0 million in unaudited gross revenue for the first six months of 2015 with a gross margin in excess of 70 percent.

Other activities for the quarter included a $6 million financing with Merck Global Health Innovation Fund and an agreement with Fluidigm to develop tests for identifying and screening multi-drug resistance genes in bacteria, fungi, and viruses.