BG Medicine this week reported third quarter revenues of $1 million, up 56 percent from $641,000 in the third quarter of 2012.
The revenue increase was driven by $1 million in sales of the company's BGM Galectin-3 test, a 64 percent jump from the $610,000 it posted in Q3 2012. BG also reported $23,000 in revenues from its services business, down 26 percent from $31,000 a year ago.
The company's revenues matched the average Wall Street estimate of $1 million.
BG's net loss for the quarter was $3.7 million, or $.13 per share, down from a net loss of $6.8 million, or $.34 per share, in the third quarter of last year, and beating the average Wall Street estimate of a net loss of $0.17 per share.
For the quarter, the company's R&D spending was down 58 percent to $1 million from $2.6 million in Q3 2012. Its SG&A expenses dropped to $3 million, down 32 percent from $4.4 million in the year-ago period.
On a conference call following the release of the results, CEO Paul Sohmer said the company planned to continue to cut costs and estimated that its 2014 operating expenses would be roughly 33 percent lower than in full-year 2013.
Sohmer added that the company was now considering options for obtaining additional external financing, though he declined to provide specifics as to what route it might pursue in this regard. According to its quarterly report filed this week with the US Securities and Exchange Commission, BG currently has enough cash on hand to fund its operations into the fourth quarter of 2014.
BG has in force through May 2015 a common stock purchase agreement with Aspire Capital Fund under which it can require Aspire to purchase up to $12 million of the company's common stock. The agreement, however, requires that BG's stock price be above $1 per share. BG's stock last closed above this threshold on Aug. 8, 2013.
Its slumping stock price could also cause problems for BG with regard to its listing on the Nasdaq Global Market. In May, the company was notified by Nasdaq that it did not meet the minimum $50 million market value requirement for listing on the exchange. The company was given until Nov. 11 to regain compliance, but has yet to do so. In Thursday afternoon trading, BG's stock price was $.61 per share, which put its total market value at $17.1 million.
If BG doesn't regain compliance by Nov. 11, it will be subject to delisting. It can then appeal the Nasdaq staff's determination to a Nasdaq Listing Qualifications Panel and request a hearing. The company could also apply to transfer its listing to the Nasdaq Capital Market, which has lower listing requirements.
This de-listing notice is one of two with which BG is currently contending. The company also received on Sept. 23 a notice from Nasdaq that for the preceding 30 consecutive business days, it had failed to maintain a minimum closing bid price of $1 per share as required for listing on the exchange. It has until March 24, 2014 to regain compliance with this requirement.
During the earnings call, Sohmer also provided an update on Abbott Diagnostics' resubmission of an automated ARCHITECT Galectin-3 assay to the US Food and Drug Administration for 510(k) clearance, noting that this was on track to be completed by year end. He estimated that the company could see launch of the assay roughly nine to 12 months after completion of the FDA submission, meaning BG could see revenues from the ARCHITECT Galectin-3 in late 2014 or early 2015.
BG also expects by year end to complete a medical review of data generated in support of its previous 510(k) submission to FDA for its CardioScore test for identifying individuals at high risk of near-term cardiovascular events, Sohmer said.
The company submitted CardioScore for FDA clearance in 2011, but withdrew the submission last year upon determining that it would not be able to respond in full to a request from FDA to confirm certain data from its BioImage validation study for the test.
BG also announced that it added two new customers for its BGM Galectin-3 test during the quarter. The Capital Health Accountable Care Organization, a community health improvement collaborative servicing communities in New Jersey and eastern Pennsylvania, adopted the test to help identify heart failure patients at risk for unplanned hospital admissions and readmissions.
The hospital readmission market has become a key focus for BG's commercialization plans for the BGM Galectin-3 test. The move into this space comes in response to new guidelines implemented by the US Centers for Medicare and Medicaid Services in October that penalize hospitals with high patient readmission rates. In March, the company published two studies comprising 3,300 subjects that indicated that serial evaluation of galectin-3 levels could help clinicians identify heart failure patients at increased risk of unplanned hospital readmissions (PM 3/8/2013).
The company said that Franklin, Tenn.-based SilverStaff Clinical Laboratories began offering the BGM Galectin-3 test, as well.
BG maintained its full-year 2013 guidance of revenues between $3.8 million to $4.0 million, and an expected operating cash burn of between $15.5 million and $16.5 million.
The company ended the quarter with $11.3 million in cash and cash equivalents, and $265,000 in restricted cash.