This article has been updated with comments from Cepheid's CEO, John Bishop.
NEW YORK (GenomeWeb) – Cepheid reported after the close of the market on Tuesday that its fourth-quarter revenues rose 12 percent year-over-year, and attributed the growth to what it called record reagent revenues and GeneXpert system placements.
The Sunnyvale, Calif.-based firm reported revenues of $147.0 million for the three months ended Dec. 31, 2015, up from $131.5 million in Q4 2014 and in line with the consensus analyst estimate of $146.9 million.
The firm had a Q4 net loss of $9.8 million, or $.14 per share, compared to a net loss of $23.8 million, or $.34 per share, a year ago. On an adjusted basis, the company reported EPS $.07, beating the average analysts' estimate of a net loss of $.20 per share for the quarter.
Cepheid also reported that clinical systems revenues grew 23 percent during the quarter to $27.1 million from $22.1 million in Q4 2014, while clinical reagents revenues rose 12 percent to $112.3 million from $100.1 million. Further, commercial clinical sales were $116.8 million, and sales to high-burden developing countries (HBDC) reached $22.6 million.
On a conference call with analysts, Cepheid CEO John Bishop said that sales of clinical systems and reagents were achieved despite a lower contribution from influenza sales than was expected. GeneXpert flu revenue, in particular, contributed more than $10 million in the fourth quarter, but was flat from last year.
However, the impact of the delayed and possibly milder flu season was more than offset by new customer adoption and transitions to the firm's Xpert Flu/RSV test, which was granted CLIA waiver in Q4, Bishop added. He further noted that the number of Xpert Flu accounts in the US increased to more than 620 at the end of the Q4 from 550 at the end of Q3 2015.
Cepheid said that it placed 306 GeneXpert systems in its commercial clinical business and another 292 systems as part of its HBDC program.
The firm also saw a 30 percent increase in number of accounts using four or more tests at the end of 2015 and a 67 percent increase in the number of accounts using seven or more tests. "We now have more than 200 customers in North America using six or more of our Xpert tests highlighting the growing importance of broad menu availability," Bishop said.
He further highlighted Cepheid's recently announced distribution deal with Henry Schein, noting that it could open up as many as 10,000 opportunities for the firm's menu of 17 moderately complex tests in the moderately complex physician office lab market, a space not currently occupied by competitors in molecular.
Bishop also discussed ongoing manufacturing efficiency strategies, including an anticipated five-fold reduction in the cost of enzymes per cartridge for new products and some existing products.
Its R&D spending rose nearly 12 percent year over year to $30.8 million from $27.6 million, while its SG&A costs rose 17 percent to $47.9 million from $41.0 million.
For full-year 2015, Cepheid's revenues rose to $538.6 million, up 15 percent year over year from $470.1 million in 2014, and in line with the consensus Wall Street estimate of $538.5 million.
Cepheid's net loss for 2015 was $48.5 million, or $.67 per share, compared to a net loss of $50.1 million, or $.72 per share, a year ago. On an adjusted basis, EPS was $.05, trouncing the average analysts' estimate of a loss of $.68 per share.
Clinical system revenues for the year were down slightly to $83.0 million from $84.7 million, while clinical reagent revenues increased 20 percent to $426.9 million from $356.4 million. Commercial clinical sales reached $424.3 million during the year and HBDC sales totaled $85.6 million, Cepheid said.
It placed 943 GeneXpert systems in its commercial clinical business and another 909 systems as part of its HBDC program for the year. As of Dec. 31, 2015 there was a cumulative total of 9,877 GeneXpert systems placed worldwide, including HBDC sales, the company said.
R&D costs increased roughly 20 percent year over year to $115.8 million from $96.9 million, while its SG&A costs were up 17 percent to $178.0 from $152.8.
Cepheid ended 2015 with $112.6 million in cash and cash equivalents and $210.1 million in short-term investments.
Bishop described 2015 as "a challenging year" for Cepheid, with transitions in the organization causing unanticipated disruptions. But, he said, "these are behind us and ... we believe that we are more effectively positioned for a productive 2016."
For full-year 2016, the company said it expects total revenues of $618 million to $635 million, in line with analyst expectations of $622.4 million. Cepheid also said it anticipates a net loss of $.57 to $.51 per share for the year — on an adjusted basis, the company expects income of $.22 to $.28 per share, compared to analyst expectations for a net loss of $.48 per share.
The company's shares were up more than 2 percent to $27.71 in afternoon trading on the Nasdaq.