- Second quarter revenue of $26.1 million, an increase of 36% compared to prior year period
- Continued growth from both the Tuberculosis and Tick-borne disease franchises
- Successful negotiation of a settlement with Statens Serum Institut which will result in substantial future gross margin improvement
- Raising revenue guidance for the full year from $102-$105 million to $103-$106 million
OXFORD, United Kingdom and MARLBOROUGH, Mass., Aug. 01, 2017 (GLOBE NEWSWIRE) -- Oxford Immunotec Global PLC (Nasdaq:OXFD), a global, high-growth diagnostics company focused on developing and commercializing proprietary tests for the management of underserved immune-regulated conditions, today announced second quarter 2017 financial results.
“We delivered a strong second quarter with revenue growth that exceeded the top end of our guidance range,” said Dr. Peter Wrighton-Smith, Chief Executive Officer of Oxford Immunotec. “As we continue our evolution from a single-product company to a multi-product company, we are pleased to see solid growth in our core tuberculosis (TB) business as well as a strong contribution from our accelerating tick-borne disease franchise.”
By revenue type, total revenues were, in millions:
| Three Months Ended June 30, | ||||||||||
| 2017 | 2016 | Percent Change | ||||||||
| Product | $ | 10.4 | $ | 9.3 | 12 | % | ||||
| Service | 15.7 | 9.9 | 59 | % | ||||||
| Total Revenue | $ | 26.1 | $ | 19.2 | 36 | % | ||||
By indication, total revenues were, in millions:
| Three Months Ended June 30, | ||||||||||
| 2017 | 2016 | Percent Change | ||||||||
| Tuberculosis | $ | 21.3 | $ | 19.2 | 12 | % | ||||
| Tick-Borne Disease and Other | 4.8 | — | NM | |||||||
| Total Revenue | $ | 26.1 | $ | 19.2 | 36 | % | ||||
By geography, total revenues were, in millions:
| Three Months Ended June 30, | |||||||||||||
| Percent Change | |||||||||||||
| 2017 | 2016 | As Reported | Constant Currency (1) | ||||||||||
| United States | $ | 16.1 | $ | 9.8 | 65 | % | 65 | % | |||||
| Europe & ROW | 1.9 | 2.0 | -2 | % | 3 | % | |||||||
| Asia | 8.1 | 7.4 | 9 | % | 8 | % | |||||||
| Total revenue | $ | 26.1 | $ | 19.2 | 36 | % | 36 | % | |||||
(1) Changes in revenue include the impact of changes in foreign currency exchange rates. We use the non-GAAP financial measure “constant currency basis” in our filings to show changes in our revenue without giving effect to period-to-period currency fluctuations. We consider the use of a period over period revenue comparison on a constant currency basis to be helpful to investors, as it provides a revenue growth measure free of positive or negative volatility due to currency fluctuations.
Settlement with Statens Serum Institut
During the quarter, we reached a settlement over a dispute regarding our license agreement with Statens Serum Institut (SSI). The terms of the settlement are confidential, however, we expect this settlement to result in a 300-400 basis point improvement in future TB gross margins.
Second Quarter 2017 Financial Results
Revenue for the second quarter of 2017 was $26.1 million, representing 36% growth over second quarter 2016 revenue of $19.2 million. On a constant currency basis, revenue growth was also 36% versus the prior year period. Tuberculosis revenue for the second quarter of $21.3 million increased 12% over the prior year period.
2017 second quarter product revenue was $10.4 million, representing a 12% increase from product revenue of $9.3 million in the second quarter of 2016. The increase was primarily driven by sales of tick-borne disease kits as well as growth in Asia. Service revenue for the second quarter of 2017 was $15.7 million, up 59% from 2016 second quarter revenue of $9.9 million. The increase in service revenue was primarily driven by tuberculosis volume increases in the United States as well as revenues from our tick-borne disease testing business.
United States revenue was $16.1 million in the second quarter of 2017, representing 65% growth over revenue of $9.8 million in the prior year period. The increase was due to growth in our core tuberculosis business as well as the additional contribution from our tick-borne disease business.
Europe & ROW revenue was $1.9 million in the second quarter of 2017, representing a 2% decrease compared to the second quarter of 2016. On a constant currency basis, Europe & ROW increased 3% versus the second quarter of 2016. The increase was primarily due to TB growth, particularly in the UK, and sales of tick-borne disease kits.
Asia revenue was $8.1 million in the second quarter of 2017, representing an increase of 9% over 2016 second quarter revenue of $7.4 million. On a constant currency basis, Asia increased 8% versus the second quarter of 2016. The increase was due to the timing of orders in China and increasing sales in South Korea.
Gross profit for the second quarter of 2017 was $13.6 million, an increase of $3.1 million over gross profit of $10.5 million in the same period of 2016. Gross margin was 52.2%, a decrease of 290 basis points from the gross margin of 55.1% in the second quarter of 2016. The second quarter gross margin performance reflects an underlying improvement in TB margins offset by the addition of our tick-borne disease businesses, which carry lower gross margins.
Operating expenses were $31.4 million in the second quarter of 2017, an increase of $13.5 million compared to $17.9 million in the same period last year.
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