TUCSON,
Ariz., Nov. 14, 2022 /PRNewswire/ -- Accelerate
Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results
for the third quarter for the period ended September 30, 2022.
"Our third quarter results were generally in line with my
expectations," commented Jack Phillips, Chief Executive
Officer of Accelerate Diagnostics, Inc. "While I was pleased
with the significant progress we made in readying for
commercialization with BD and on development of our next generation
AST platform, the FDA's challenge of Arc's regulatory status was an
unexpected set-back. Despite this news, BD remains committed to our
long-term commercial partnership."
Third Quarter 2022 Highlights
- Added 6 contracted instruments and brought 9 instruments live
in the U.S. in the quarter.
- Ended the second quarter with 323 U.S. clinically live and
revenue-generating instruments, with another 81 U.S. contracted
instruments in the process of being implemented and not yet
revenue-generating.
- Net sales were $3.0 million,
compared to $3.1 million in the third
quarter of the prior year, or a 3% decrease. This decrease
was driven by the timing of capital equipment sales, while
recurring revenues grew by 14% compared to the same period in the
prior year.
- Gross margin was 26% for the quarter, compared to 32% in the
second quarter of the prior year. The decline in gross
margins resulted from inflation to manufacturing costs and other
factors.
- Selling, general, and administrative (SG&A) costs for the
quarter were $8.3 million, compared
to $10.8 million from the same
quarter of the prior year. SG&A costs for the quarter excluding
non-cash stock-based compensation were $7.3
million, compared to $7.5
million from the same quarter of the prior year. SG&A
was relatively unchanged over these periods.
- Research and development (R&D) costs for the quarter were
$7.3 million, compared to
$4.7 million from the same quarter of
the prior year. R&D costs excluding non-cash stock-based
compensation expense for the quarter were $7.1 million, compared to $4.4 million from the quarter of the prior year.
This increase was the result of investment in our next generation
AST platform.
- Net loss was $15.7 million in the
second quarter, resulting in $0.18
net loss per share. Net loss excluding non-cash stock-based
compensation expense for the second quarter was $14.5 million.
- Net cash used in the quarter excluding financing was
$14.3 million.
Year-to-date 2022 Highlights
- Net sales were $9.8 million
year-to-date, compared to $8.4
million from the same period of the prior year, or a 16%
increase. Growth was driven by increases in both capital and
recurring revenues.
- Gross margin was 27% year-to-date, compared to 35% from the
same period of the prior year. The decline in gross margins
resulted from ongoing pandemic-related impacts to manufacturing
costs and other factors.
- Selling, general, and administrative (SG&A) costs
year-to-date were $30.4 million,
compared to $37.7 million from the
same period of the prior year. SG&A costs excluding
non-cash stock-based compensation were $23.9
million year to date, compared to $23.3 million from the same period of the prior
year.
- Research and development (R&D) costs were $20.9 million year to date, compared to
$17.3 million from the same period of
the prior year. R&D costs excluding non-cash stock-based
compensation expense were $19.8
million year to date, compared to $13.0 million from the same period of the prior
year. This increase was the result of investment in our next
generation AST platform.
- Net loss was $47.7 million year
to date, resulting in $0.62 net loss
per share. Net loss excluding non-cash stock-based compensation
expense was $39.5 million.
- Net cash used excluding financing was $41.1 million
- Ended the quarter with total cash, investments, and cash
equivalents of $55.4 million.
Full financial results for the quarter ending September 30, 2022 will be filed on Form 10-Q
through the Securities and Exchange Commission's (SEC) website at
http://www.sec.gov.
Audio Webcast and Conference
Call
To listen to the 2022 third quarter financial results, call by
phone, +1.877.883.0383 and enter Elite Entry Number: 5844198.
International participants may dial +1.412.902.6506. Please dial in
10–15 minutes prior to the start of the conference. A replay of the
call will be available by telephone at +1.877.344.7529 (U.S.) or
+1.412.317.0088 (International) using the replay code 7894082 until
December 5, 2022.
This conference call will also be webcast and can be accessed
from the company's website at ir.axdx.com. A replay of the audio
webcast will be available until February 14,
2023.
Use of Non-GAAP Financial
Measures
This press release contains certain financial measures that are
not recognized measures under accounting principles generally
accepted in the United States of
America ("GAAP"), which include SG&A, R&D, and Net
income (loss) amounts excluding stock-based compensation
expenses.
Our management and board of directors use expenses excluding the
cost of stock-based compensation to understand and evaluate our
operating performance and trends, to prepare and approve our annual
budget and to develop short-term and long-term operating and
financing plans. Accordingly, we believe that expenses excluding
the cost of stock-based compensation provides useful information
for investors in understanding and evaluating our operating results
in the same manner as our management and our board of directors.
Expenses excluding the cost of stock-based compensation is a
non-GAAP financial measure and should be considered in addition to,
not as superior to, or as a substitute for, SG&A expenses,
R&D expenses, and net income (loss) reported in accordance with
GAAP. The following tables present a reconciliation of SG&A
expenses, R&D expenses and net income (loss) excluding
stock-based compensation to comparable GAAP measures for the
periods indicated:
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
(in
thousands)
|
(in
thousands)
|
|
2022
|
2021
|
2022
|
2021
|
Sales, General and
Administrative
|
$
8,255
|
$
10,806
|
$
30,422
|
$
37,744
|
Non-cash equity-based
compensation as a component of sales, general and
administrative
|
911
|
3,281
|
6,557
|
14,461
|
Sales, general and
administrative less non-cash equity-based compensation
|
$
7,344
|
$
7,525
|
$
23,865
|
$
23,283
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
(in
thousands)
|
(in
thousands)
|
|
2022
|
2021
|
2022
|
2021
|
Research and
Development
|
$
7,285
|
$
4,712
|
$
20,885
|
$
17,341
|
Non-cash equity-based
compensation as a component of research and development
|
151
|
266
|
1,052
|
4,340
|
Research and
development less non-cash equity-based compensation
|
$
7,134
|
$
4,446
|
$
19,833
|
$
13,001
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
(in
thousands)
|
(in
thousands)
|
|
2022
|
2021
|
2022
|
2021
|
Loss from
operations
|
$
(14,770)
|
$
(14,532)
|
$
(48,654)
|
$
(52,148)
|
Non-cash equity-based
compensation as a component of loss from operations
|
1,229
|
3,629
|
8,179
|
19,058
|
Loss from operations
less non-cash equity-based compensation
|
$
(13,541)
|
$
(10,903)
|
$
(40,475)
|
$
(33,090)
|
About Accelerate Diagnostics,
Inc.
Accelerate Diagnostics, Inc. is an in vitro diagnostics
company dedicated to providing solutions for the global challenges
of antibiotic resistance and sepsis. The Accelerate
Pheno® system and Accelerate PhenoTest® BC
kit combine several technologies aimed at reducing the time
clinicians must wait to determine the most optimal antibiotic
therapy for deadly infections. The FDA cleared system and kit fully
automate the sample preparation steps to report phenotypic
antibiotic susceptibility results in approximately 7 hours direct
from positive blood cultures. Recent external studies indicate the
solution offers results 1–2 days faster than existing methods,
enabling clinicians to optimize antibiotic selection and dosage
specific to the individual patient days earlier.
The "ACCELERATE DIAGNOSTICS" and "ACCELERATE PHENO" and
"ACCELERATE PHENOTEST" and diamond shaped logos and marks are
trademarks or registered trademarks of Accelerate Diagnostics,
Inc.
For more information about the company, its products and
technology, or recent publications, visit axdx.com.
Forward-Looking
Statements
Certain of the statements made in this press release are forward
looking or may have forward looking implications, such as, among
others, Mr. Phillip's statements regarding BD commercialization
preparations, development of our next generation AST platform, and
BD's commitment to our long-term commercial partnership. Actual
results or developments may differ materially from those projected
or implied in these forward-looking statements. Information about
the risks and uncertainties faced by Accelerate Diagnostics is
contained in the section captioned "Risk Factors" in the company's
most recent Annual Report on Form 10-K, filed with the Securities
and Exchange Commission on March 14, 2022, and in any other
reports that the company files with the Securities and Exchange
Commission. The company's forward-looking statements could be
affected by general industry and market conditions. Except as
required by federal securities laws, the company undertakes no
obligation to update or revise these forward-looking statements to
reflect new events, uncertainties or other contingencies.
ACCELERATE
DIAGNOSTICS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands, except
share data)
|
|
September
30,
|
December
31,
|
|
2022
|
2021
|
|
Unaudited
|
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$38,987
|
$39,898
|
Investments
|
16,407
|
23,720
|
Trade accounts
receivable, net
|
2,393
|
2,320
|
Inventory
|
5,392
|
5,067
|
Prepaid
expenses
|
1,119
|
768
|
Other current
assets
|
1,974
|
1,558
|
Total current
assets
|
66,272
|
73,331
|
Property and equipment,
net
|
3,621
|
5,389
|
Finance lease assets,
net
|
2,319
|
—
|
Operating lease right
of use assets, net
|
2,012
|
2,510
|
Other non-current
assets
|
1,623
|
1,817
|
Total assets
$75,847
$83,047
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$2,819
|
$1,983
|
Accrued
liabilities
|
4,300
|
2,853
|
Accrued
interest
|
118
|
909
|
Deferred
revenue
|
524
|
451
|
Current portion of
long-term debt
|
80
|
80
|
Finance lease,
current
|
953
|
—
|
Operating lease,
current
|
774
|
669
|
Total current
liabilities
|
9,568
|
6,945
|
Finance lease,
non-current
|
698
|
—
|
Operating lease,
non-current
|
1,775
|
2,381
|
Other non-current
liabilities
|
759
|
808
|
Accrued interest
related-party
|
220
|
—
|
Long-term debt
related-party
|
16,299
|
—
|
Convertible
notes
|
56,325
|
107,984
|
Total
liabilities
|
$85,644
|
$118,118
|
|
|
|
Stockholders'
deficit:
|
|
|
Preferred shares,
$0.001 par value;
|
|
|
5,000,000 preferred
shares authorized and 3,954,546 outstanding as of September 30,
2022 and December 31, 2021
|
4
|
4
|
Common stock, $0.001
par value;
|
|
|
200,000,000 common
shares authorized with 97,240,983 shares issued and outstanding on
September 30, 2022 and 100,000,000 common shares authorized with
67,649,018 shares issued and outstanding on December 31,
2021
|
97
|
68
|
Contributed
capital
|
627,853
|
580,652
|
Treasury
stock
|
(45,067)
|
(45,067)
|
Accumulated
deficit
|
(592,439)
|
(570,668)
|
Accumulated other
comprehensive loss
|
(245)
|
(60)
|
Total stockholders'
deficit
|
(9,797)
|
(35,071)
|
Total liabilities and
stockholders' deficit
|
$75,847
|
$83,047
|
See accompanying notes
to condensed consolidated financial statements.
|
ACCELERATE
DIAGNOSTICS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS Unaudited (in thousands, except per share
data)
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
2022
|
2021
|
2022
|
2021
|
Net
sales
|
$2,960
|
$3,122
|
$9,780
|
$8,439
|
|
|
|
|
|
Cost of
sales
|
2,190
|
2,136
|
7,127
|
5,502
|
Gross profit
|
770
|
986
|
2,653
|
2,937
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
Research and
development
|
7,285
|
4,712
|
20,885
|
17,341
|
Sales, general and
administrative
|
8,255
|
10,806
|
30,422
|
37,744
|
Total costs and
expenses
|
15,540
|
15,518
|
51,307
|
55,085
|
|
|
|
|
|
Loss from
operations
|
(14,770)
|
(14,532)
|
(48,654)
|
(52,148)
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
|
Interest
expense
|
(203)
|
(4,211)
|
(1,833)
|
(12,477)
|
Interest expense
related-party
|
(495)
|
—
|
(495)
|
—
|
Gain on extinguishment
of debt
|
—
|
9,840
|
3,565
|
9,840
|
Foreign currency
exchange loss
|
(261)
|
(78)
|
(221)
|
(238)
|
Interest
income
|
73
|
—
|
151
|
55
|
Other (expense) income,
net
|
(49)
|
(5)
|
(206)
|
69
|
Total other (expense)
income, net
|
(935)
|
5,546
|
961
|
(2,751)
|
|
|
|
|
|
Net loss before income
taxes
|
(15,705)
|
(8,986)
|
(47,693)
|
(54,899)
|
Provision for income
taxes
|
—
|
—
|
—
|
—
|
Net loss
|
$(15,705)
|
$(8,986)
|
$(47,693)
|
$(54,899)
|
|
|
|
|
|
Basic and diluted net
loss per share
|
$(0.18)
|
$(0.15)
|
$(0.62)
|
$(0.91)
|
Weighted average shares
outstanding
|
87,011
|
61,146
|
77,049
|
60,250
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
Net loss
|
$(15,705)
|
$(8,986)
|
$(47,693)
|
$(54,899)
|
Net unrealized gain
(loss) on debt securities available-for-sale
|
48
|
(3)
|
(84)
|
(21)
|
Foreign currency
translation adjustment
|
139
|
(27)
|
(101)
|
(87)
|
See accompanying notes
to condensed consolidated financial statements.
|
ACCELERATE
DIAGNOSTICS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS Unaudited (in thousands)
|
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2022
|
2021
|
Cash flows from
operating activities:
|
|
|
Net loss
|
$(47,693)
|
$(54,899)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
Depreciation and
amortization
|
2,207
|
1,875
|
Amortization of
investment discount
|
94
|
153
|
Equity-based
compensation
|
8,179
|
19,058
|
Amortization of debt
discount and issuance costs
|
386
|
9,250
|
Amortization of debt
discount related-party
|
275
|
—
|
Loss (gain) on disposal
of property and equipment
|
74
|
(202)
|
Unrealized loss on
equity investments
|
206
|
—
|
Gain on extinguishment
of debt
|
(3,565)
|
(9,840)
|
(Increase) decrease in
assets:
|
|
|
Contributions to
deferred compensation plan
|
(174)
|
(343)
|
Accounts
receivable
|
(73)
|
(719)
|
Inventory
|
(245)
|
(527)
|
Prepaid expense and
other
|
(491)
|
860
|
Increase (decrease) in
liabilities:
|
|
|
Accounts
payable
|
1,221
|
1,017
|
Accrued
liabilities
|
962
|
(436)
|
Accrued
interest
|
(785)
|
(1,059)
|
Deferred revenue and
income
|
73
|
93
|
Deferred
compensation
|
(49)
|
343
|
Net cash used in
operating activities
|
(39,398)
|
(35,376)
|
|
|
|
Cash flows from
investing activities:
|
|
|
Purchases of
equipment
|
(446)
|
(202)
|
Purchase of marketable
securities
|
(27,506)
|
(22,345)
|
Maturities of
marketable securities
|
34,527
|
33,601
|
Net cash provided by
investing activities
|
6,575
|
11,054
|
|
|
|
Cash flows from
financing activities:
|
|
|
Proceeds from issuance
of common stock
|
32,872
|
22,640
|
Payments on finance
leases
|
(1,109)
|
—
|
Proceeds from exercise
of options
|
7
|
1,456
|
Proceeds from issuance
of common stocks under employee purchase plan
|
184
|
245
|
Transaction costs
related to debt exchange
|
(192)
|
—
|
Payment of
debt
|
(6)
|
(6)
|
Accrued interest from
related-party
|
220
|
—
|
Net cash provided by
financing activities
|
31,976
|
24,335
|
|
|
|
See accompanying notes
to condensed consolidated financial statements.
|
ACCELERATE
DIAGNOSTICS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED) Unaudited (in thousands)
|
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2022
|
2021
|
Effect of exchange rate
on cash
|
(64)
|
(69)
|
|
|
|
Decrease in cash and
cash equivalents
|
(911)
|
(56)
|
Cash and cash
equivalents, beginning of period
|
39,898
|
35,781
|
Cash and cash
equivalents, end of period
|
$38,987
|
$35,725
|
|
|
|
Non-cash investing
activities:
|
|
|
Net transfer of
instruments (to) from inventory to property and
equipment
|
$(78)
|
$500
|
|
|
|
Non-cash financing
activities:
|
|
|
Extinguishment of
convertible senior notes through issuance of common
stock
|
$10,180
|
$—
|
Convertible notes due
from related-party extinguished in connection with the exchange
transaction, net of deferred issuance costs
|
$49,624
|
$—
|
Fair value of new note
from related-party issued in connection with the exchange
transaction
|
$16,024
|
$—
|
Fair value of common
stock warrant issued to related-party in connection with exchange
transaction
|
$3,753
|
$—
|
Capital contribution
from related-party in connection with the exchange
transaction
|
$29,847
|
$—
|
|
|
|
Supplemental cash
flow information:
|
|
|
Interest
paid
|
$2,214
|
$2,144
|
See accompanying notes
to condensed consolidated financial statements.
|
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SOURCE Accelerate Diagnostics, Inc.