TUCSON,
Ariz., Nov. 9, 2023 /PRNewswire/ -- Accelerate
Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results
for the third quarter ended September 30,
2023.
"During the quarter we made significant advances with our Wave
program," commented Jack Phillips, Chief Executive Officer of
Accelerate Diagnostics, Inc. "We are getting results well
within current standard of care methods to provide same-shift
patient results, which gives us confidence our innovative
technology will provide same-shift clinical impact."
Third Quarter 2023 Operating Highlights:
- Wave Beta modules are operational in our lab delivering on our
key product requirements: goal of time-to-result of less than 4.5
hours on average, high through-put sample processing, random access
for continuous sample loading and platform scalability.
- Added six contracted Pheno instruments during the quarter,
ending the quarter with 339 U.S. clinically live Pheno
revenue-generating instruments and another 70 U.S. contracted Pheno
instruments in the process of being implemented.
- Secured more than twenty existing U.S. Pheno customers to
multi-year contract extensions for rapid positive blood culture
susceptibility testing during the quarter.
Third Quarter 2023 Financial Highlights:
- Net sales for the third quarter ended September 30, 2023 were $3.3 million, compared to $3.0 million in the third quarter of the prior
year, a 10% increase. This increase was primarily driven by capital
equipment sales in the quarter.
- Gross margin was approximately 3% for the quarter, compared to
21% in the third quarter of the prior year. This decrease was
driven primarily by a non-cash write-down of $1.2 million of excess inventory.
- Selling, general, and administrative (SG&A) costs for the
quarter were $7.8 million, compared
to $8.3 million for the same quarter
of the prior year. This decrease was the result of lower
employee-related expenses.
- Research and development (R&D) costs for the quarter were
$7.0 million, compared to
$7.3 million from the same quarter of
the prior year. This decrease was driven by a reduction in
third-party spend related to the development of our next generation
AST platform.
- Net income was $0.9 million in
the third quarter, resulting in basic and diluted earnings per
share of $0.06. Our positive net
income was driven by a fair-value adjustment of the derivative
liability related to our convertible notes.
- Net cash used in the quarter excluding financing activities was
$9.6 million and the Company ended
the quarter with total cash, investments and cash equivalents
$21.2 million.
Year-to-date 2023 Financial Highlights:
- Net sales were $9.0 million
year-to-date, compared to $9.8
million from the same period of the prior year, or an 8%
decrease driven by lower capital instrument sales in 2023 compared
to the prior year.
- Gross margin was approximately 20% for the quarter, reflecting
the non-cash write-down of $1.2
million of excess inventory recorded during the period,
compared to 25% in the third quarter of the prior year.
- Selling, general, and administrative (SG&A) costs
year-to-date were $25.4 million,
compared to $30.4 million for the
same period of the prior year.
- Research and development (R&D) costs were $19.8 million year to date, compared to
$20.9 million from the same period of
the prior year.
- Net cash used excluding financing activities was $38.4 million.
Full financial results for the quarter ending September 30, 2023 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 2023 third quarter financial results on
Thursday, November 9, 2023, at
4:30 p.m. Eastern Time, call by
phone, +1.877.883.0383 and enter Elite Entry Number: 9121489.
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 6290760 until
November 30, 2023.
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 November 30,
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
loss from operations 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)
|
|
2023
|
2022
|
2023
|
2022
|
|
Sales, General and
Administrative
|
$
7,761
|
$
8,255
|
$
25,432
|
$
30,422
|
|
Non-cash equity-based
compensation
as a component of sales, general and
administrative
|
1,488
|
911
|
2,647
|
6,557
|
|
Sales, general and
administrative less
non-cash equity-based compensation
|
$
6,273
|
$
7,344
|
$
22,785
|
$
23,865
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
(in
thousands)
|
(in
thousands)
|
|
2023
|
2022
|
2023
|
2022
|
|
Research and
Development
|
$
6,996
|
$
7,285
|
$
19,783
|
$
20,885
|
|
Non-cash
equity-based
compensation as a component of
research and development
|
269
|
151
|
1,130
|
1,052
|
|
Research and
development less non-
cash equity-based compensation
|
$
6,727
|
$
7,134
|
$
18,653
|
$
19,833
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
(in
thousands)
|
(in
thousands)
|
|
2023
|
2022
|
2023
|
2022
|
|
Loss from
operations
|
$
(14,650)
|
$
(14,961)
|
$
(43,298)
|
$
(48,845)
|
|
Non-cash
equity-based
compensation as a component of
loss from operations
|
1,815
|
1,229
|
4,023
|
8,179
|
|
Loss from operations
less non-cash
equity-based compensation
|
$
(12,835)
|
$
(13,732)
|
$
(39,275)
|
$
(40,666)
|
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 and the
related conference call are forward-looking or may have
forward-looking implications, such as, among others: the company's
future development plans and growth strategy, including plans and
objectives relating to its future operations, products and
performance; projections as to when certain key business milestones
may be achieved; expectations regarding the potential or benefits
of the company's products and technologies; projections of future
demand for the company's products; the company's continued
investment in new product development to both enhance its existing
products and bring new ones to market; the company's expectations
relating to current supply chain impacts and inflationary
pressures; the company's expectations regarding its commercial
partnerships, such as with Becton, Dickinson and Company, including
anticipated benefits from such collaboration; the company's
expectations and plans relating to regulatory approvals; and the
company's liquidity and capital requirements. Actual results
or developments may differ materially from those projected or
implied in these forward-looking statements due to significant
risks and uncertainties, including, but not limited to: volatility
throughout the global economy and the related impacts to the
businesses of the company's suppliers and customers, such as
customer demand fluctuations, supply chain constraints and
inflationary pressures, as well as difficulties in resolving the
company's continuing financial condition and ability to obtain
additional capital to meet its financial obligations. Other
important factors that could cause the company's actual results to
differ materially from those in its forward-looking statements
include those discussed in the company's filings with the
Securities and Exchange Commission (the "SEC"), including in the
"Risk Factors" sections of the company's most recently
filed periodic reports on Form 10-K and Form 10-Q and
subsequent filings with the SEC. 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,
|
|
2023
|
2022
|
|
Unaudited
|
|
|
ASSETS
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$20,162
|
$34,905
|
|
Investments
|
989
|
10,656
|
|
Trade accounts
receivable, net
|
2,666
|
2,416
|
|
Inventory
|
3,553
|
5,194
|
|
Prepaid
expenses
|
1,435
|
818
|
|
Other current
assets
|
3,638
|
2,025
|
|
Total current
assets
|
32,443
|
56,014
|
|
Property and equipment,
net
|
2,609
|
3,478
|
|
Finance lease assets,
net
|
1,807
|
2,422
|
|
Operating lease right
of use assets, net
|
1,352
|
1,859
|
|
Other non-current
assets
|
1,113
|
1,242
|
|
Total assets
|
$39,324
|
$65,015
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$4,812
|
$4,501
|
|
Accrued
liabilities
|
3,437
|
2,682
|
|
Accrued
interest
|
1,186
|
472
|
|
Deferred
revenue
|
596
|
547
|
|
Current portion of
convertible notes
|
726
|
56,413
|
|
Finance lease,
current
|
468
|
1,113
|
|
Operating lease,
current
|
963
|
829
|
|
Derivative
liability
|
25,598
|
—
|
|
Total current
liabilities
|
37,786
|
66,557
|
|
Finance lease,
non-current
|
270
|
782
|
|
Operating lease,
non-current
|
816
|
1,545
|
|
Deferred income,
non-current
|
1,090
|
—
|
|
Other non-current
liabilities
|
1,068
|
874
|
|
Accrued interest
related-party
|
—
|
663
|
|
Long-term debt
related-party
|
—
|
16,858
|
|
Convertible notes,
non-current
|
33,327
|
—
|
|
Total
liabilities
|
$74,357
|
$87,279
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
Preferred shares,
$0.001 par value;
|
|
|
|
5,000,000 preferred
shares authorized with no shares issued and outstanding
on
September 30, 2023 and
5,000,000 preferred shares authorized with
3,954,546
shares issued and
outstanding on December 31, 2022
|
—
|
4
|
|
Common stock, $0.001
par value;
|
|
|
|
450,000,000 common
shares authorized with 14,504,695 shares issued and
outstanding on September 30, 2023 and 200,000,000 common shares
authorized
with 9,747,755 shares issued and outstanding on December 31,
2022
|
14
|
10
|
|
Contributed
capital
|
666,239
|
630,428
|
|
Treasury
stock
|
(45,067)
|
(45,067)
|
|
Accumulated
deficit
|
(655,859)
|
(607,239)
|
|
Accumulated other
comprehensive loss
|
(360)
|
(400)
|
|
Total stockholders'
deficit
|
(35,033)
|
(22,264)
|
|
Total liabilities and
stockholders' deficit
|
$39,324
|
$65,015
|
|
|
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,
|
|
2023
|
2022
|
|
2023
|
2022
|
|
Net
sales
|
$3,299
|
$2,960
|
|
$9,032
|
$9,780
|
|
|
|
|
|
|
|
Cost of
sales:
|
|
|
|
|
|
|
Cost of
sales
|
2,008
|
2,381
|
|
5,931
|
7,318
|
|
Inventory
write-down
|
1,184
|
—
|
|
1,184
|
—
|
|
Total cost of
sales
|
3,192
|
2,381
|
|
7,115
|
7,318
|
|
|
|
|
|
|
|
Gross profit
|
107
|
579
|
|
1,917
|
2,462
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
Research and
development
|
6,996
|
7,285
|
|
19,783
|
20,885
|
|
Sales, general and
administrative
|
7,761
|
8,255
|
|
25,432
|
30,422
|
|
Total costs and
expenses
|
14,757
|
15,540
|
|
45,215
|
51,307
|
|
|
|
|
|
|
|
Loss from
operations
|
(14,650)
|
(14,961)
|
|
(43,298)
|
(48,845)
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest
expense
|
(2,205)
|
(203)
|
|
(3,798)
|
(1,833)
|
|
Interest expense
related-party
|
—
|
(495)
|
|
(1,817)
|
(495)
|
|
Gain (loss) on
extinguishment of debt
|
51
|
—
|
|
(6,499)
|
3,565
|
|
(Loss) on
extinguishment of debt related party
|
—
|
—
|
|
(6,755)
|
—
|
|
Gain on fair value
adjustment
|
18,056
|
—
|
|
13,026
|
—
|
|
Foreign currency
exchange gain
|
(428)
|
(261)
|
|
(170)
|
(221)
|
|
Interest
income
|
246
|
73
|
|
921
|
151
|
|
Other (expense) income,
net
|
(29)
|
(49)
|
|
56
|
(206)
|
|
Total other income
(expense), net
|
15,691
|
(935)
|
|
(5,036)
|
961
|
|
|
|
|
|
|
|
Net income (loss)
before income taxes
|
1,041
|
(15,896)
|
|
(48,334)
|
(47,884)
|
|
Provision for income
taxes
|
(131)
|
—
|
|
(286)
|
—
|
|
Net income
(loss)
|
$910
|
$(15,896)
|
|
$(48,620)
|
$(47,884)
|
|
|
|
|
|
|
|
Basic net income (loss)
per share
|
$0.06
|
$(1.83)
|
|
$(4.13)
|
$(6.21)
|
|
Basic weighted average
shares outstanding
|
14,433
|
8,701
|
|
11,777
|
7,705
|
|
|
|
|
|
|
|
Dilutive net income
(loss) per share
|
$0.06
|
$(1.83)
|
|
$(4.13)
|
$(6.21)
|
|
Dilutive weighted
average shares outstanding
|
14,553
|
8,701
|
|
11,777
|
7,705
|
|
|
|
|
|
|
|
Other comprehensive
loss:
|
|
|
|
|
|
|
Net income
(loss)
|
$910
|
$(15,896)
|
|
$(48,620)
|
$(47,884)
|
|
Net unrealized gain
(loss) on debt securities available-for-sale
|
—
|
48
|
|
28
|
(84)
|
|
Foreign currency
translation adjustment
|
293
|
139
|
|
12
|
(101)
|
|
Comprehensive income
(loss)
|
$1,203
|
$(15,709)
|
|
$(48,580)
|
$(48,069)
|
|
|
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,
|
|
2023
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$(48,620)
|
$(47,884)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
2,434
|
2,207
|
|
Amortization of
investment discount
|
—
|
94
|
|
Equity-based
compensation
|
4,023
|
8,179
|
|
Amortization of debt
discount and issuance costs
|
2,060
|
386
|
|
Amortization of debt
discount related-party
|
1,033
|
275
|
|
Loss on disposal of
property and equipment
|
134
|
74
|
|
Unrealized (gain) loss
on equity investments
|
(61)
|
206
|
|
Loss (gain) on
extinguishment of debt
|
6,499
|
(3,565)
|
|
Loss on extinguishment
of debt with related party
|
6,755
|
—
|
|
Gain on fair value
adjustments
|
(13,026)
|
—
|
|
Inventory
write-down
|
1,184
|
—
|
|
(Increase) decrease in
assets:
|
|
|
|
Contributions to
deferred compensation plan
|
—
|
(174)
|
|
Accounts
receivable
|
(250)
|
(73)
|
|
Inventory
|
298
|
(245)
|
|
Prepaid expense and
other
|
956
|
(491)
|
|
Increase (decrease) in
liabilities:
|
|
|
|
Accounts
payable
|
218
|
1,221
|
|
Accrued liabilities and
other
|
67
|
1,153
|
|
Accrued
interest
|
1,738
|
(785)
|
|
Accrued interest to
related-party
|
784
|
220
|
|
Deferred revenue and
income
|
1,139
|
73
|
|
Deferred
compensation
|
194
|
(49)
|
|
Net cash used in
operating activities
|
(32,441)
|
(39,178)
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of
equipment
|
(925)
|
(446)
|
|
Purchase of marketable
securities
|
—
|
(27,506)
|
|
Maturities of
marketable securities
|
9,695
|
34,527
|
|
Net cash provided by
investing activities
|
8,770
|
6,575
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from issuance
of common stock to related party
|
4,000
|
—
|
|
Proceeds from issuance
of common stock
|
—
|
32,872
|
|
Payments on finance
leases
|
(1,357)
|
(1,109)
|
|
Proceeds from exercise
of options
|
—
|
7
|
|
Proceeds from issuance
of common stock under employee purchase plan
|
—
|
184
|
|
Proceeds from issuance
of 5.00% Notes
|
10,000
|
—
|
|
Transaction costs
related to debt and equity issuances
|
(3,731)
|
(192)
|
|
Payment of
debt
|
—
|
(6)
|
|
Net cash provided by
financing activities
|
8,912
|
31,756
|
|
ACCELERATE
DIAGNOSTICS, INC.
CONDENSED
CONSOLIDATED
STATEMENTS OF CASH
FLOWS (CONTINUED)
Unaudited
(in
thousands)
|
|
|
Nine Months
Ended
|
|
September
30,
|
September
30,
|
|
2023
|
2022
|
|
Effect of exchange rate
on cash
|
16
|
(64)
|
|
|
|
|
Decrease in cash and
cash equivalents
|
(14,743)
|
(911)
|
|
Cash and cash
equivalents, beginning of period
|
34,905
|
39,898
|
|
Cash and cash
equivalents, end of period
|
$20,162
|
$38,987
|
|
|
|
|
Non-cash investing
activities:
|
|
|
|
Net transfer of
instruments from inventory to property and equipment
|
$343
|
$(78)
|
|
|
|
|
Non-cash financing
activities:
|
|
|
|
Extinguishment of 2.50%
Notes through issuance of common stock
|
$—
|
$10,180
|
|
Capital contribution
from the exchange of secured note and accrued interest through
the issuance of common stock with related party
|
$25,363
|
$29,847
|
|
Exchange of 2.50% Notes
and accrued interest for 5.00% Notes
|
$56,893
|
$—
|
|
Debt premium on
issuance of 5.00% Notes
|
$6,023
|
$—
|
|
Derivative
liability
|
$38,160
|
$—
|
|
2.50% Notes
extinguished in connection with exchange transaction
|
$—
|
$49,624
|
|
Fair value of new note
issued in connection with the exchange transaction
|
$—
|
$16,024
|
|
Fair value of common
stock warrant issued in connection with the exchange
transaction
|
$—
|
$3,753
|
|
Extinguishment of 5.00%
Notes through issuance of common stock
|
$330
|
$—
|
|
Extinguishment of
derivative liability in connection with extinguishment of 5.00%
Notes
|
$380
|
$—
|
|
Issuance of common
stock in connection with extinguishment of 5.00% Notes
|
$658
|
$—
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
Interest
paid
|
$—
|
$2,214
|
|
|
See accompanying notes
to condensed consolidated financial statements.
|
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SOURCE Accelerate Diagnostics, Inc.