Yahoo Finance Accelerate Diagnostics Inc (AXDX) (Q1 2024) Earnings Call Transcript Highlights: Navigating ...
Revenue: $2.9 million for the quarter, up from $2.8 million in the same period last year.
Gross Margin: 25% for the quarter, down from 36% in the same period last year.
SG&A Expenses: $5.7 million for the quarter, down from $10.1 million in the same period last year.
R&D Expenses: $5.2 million for the quarter, down from $7 million in the same period last year.
Net Loss: $14.2 million for the quarter, with a loss per share of $0.74.
Cash Used: $9 million for the quarter.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Net sales increased slightly from $2.8 million in the previous year to $2.9 million this quarter, driven by an increase in recurring consumable net sales.
Significant reduction in Selling, General and Administrative (SG&A) expenses from $10.1 million in the previous year to $5.7 million this quarter, primarily due to lower employee-related expenses and nonrecurring legal and advisory expenses.
Research and Development (R&D) expenses decreased from $7 million in the previous year to $5.2 million this quarter, reflecting lower employee-related and third-party development expenses.
Positive market response and strong interest in the WAVE system, which offers a consolidated platform for processing both PBC and isolate specimens, potentially disrupting the microbiology susceptibility testing market.
Strategic partnerships and collaborations, such as with Bruker, to enhance product offerings and market reach, along with progress in securing a global partnership to commercialize the WAVE system.
Negative Points
Gross margin declined from 36% in the previous year to 25% this quarter, primarily due to product mix.
Net loss for the quarter increased to $14.2 million, resulting in a loss per share of $0.74.
Cash used during the quarter was approximately $9 million, indicating ongoing cash burn issues despite efforts to reduce operating expenses.
Installation delay at the second preclinical site for the WAVE system, causing a delay in the preclinical study and potential impact on the timeline for starting clinical trials.
Despite the decrease in R&D and SG&A expenses, the company still faces challenges in achieving profitability and managing high operational costs.
Q & A Highlights
Q: Can you provide more details on the conversations you're having with potential customers and how these customers are viewing WAVE versus other competing solutions out there? A: John Phillips, President and CEO of Accelerate Diagnostics, explained that the feedback from customers about WAVE has been consistently positive. The system's high throughput, scalability, and ability to integrate high volume testing like isolate market testing and rapid PBC on one platform are significant advantages. Additionally, WAVE's capability to deliver results in about four hours, which is faster than current systems, and its competitive pricing in both the PVC and isolate markets have been well-received. The company is securing long-term contracts with existing customers, who are also requesting upgrade clauses for WAVE.
Q: How will the transition from existing products to WAVE look for your customers? A: John Phillips discussed that WAVE provides customers with optionality in rapid ID solutions. Some customers prefer to use their existing molecular platforms for rapid PBCID, coupled with WAVE for rapid susceptibility. Others might integrate ARC with their current systems for a complete solution. This transition is designed to be smooth, offering rapid ID and susceptibility testing on a single platform.
Q: Can you update us on how the collaboration with Bruker has been progressing and its impact on your portfolio? A: John Phillips noted that the collaboration with Bruker has been extremely positive. The partnership has led to the development of ARC with Bruker's Biotyper platforms, which has been submitted to the FDA. The collaboration is expected to enhance the visibility and adoption of Accelerate Diagnostics' products, including WAVE.
Q: What impact has the collaboration with BD had on funnel velocity and product placements? A: David Patience, CFO of Accelerate Diagnostics, highlighted that the collaboration with BD has been instrumental in contracting new Pheno instruments and bringing additional instruments live. This partnership is crucial for both securing new customers and preparing the existing customer base for the transition to WAVE, thereby improving the company's market penetration and economic efficiency per customer.
Q: What are the financial results for this quarter? A: David Patience reported that net sales were approximately $2.9 million, with a gross margin of 25%. The company experienced a net loss of $14.2 million, or $0.74 per share. Significant reductions in SG&A and R&D expenses were achieved, contributing to a lower cash burn, which is a focus for the upcoming quarters.
Q: What are the future plans for WAVE and its market strategy? A: John Phillips outlined a three-step commercialization strategy for WAVE, starting with extending leadership in the rapid PBCAST market, expanding the available market by launching an isolate menu on the same instrument, and pursuing geographic and technological expansion with a commercial partner. The company aims to be a global provider of rapid IDAST solutions and is confident in securing a partnership by mid-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
