Specialty cancer diagnostics company Precipio, Inc. announces that continued revenue growth generated cash levels that bring the company closer to breakeven.
NEW HAVEN, Conn., Jan. 23, 2024 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc.(NASDAQ: PRPO) announces that continued revenue growth generated cash levels that bring the company closer to breakeven. Cash Burn From Operations (CBFO) declined by over 90% from the previous quarter, from approximately $1M/quarter in Q3-2023 to below $100k/quarter in the following recent quarter Q4-2023.
Precipio’s end of quarter cash balance changed from approximately $1.5M at the end of Q3-2024, to approximately $1.4M as of Dec 31, 2023. This was achieved without any significant increase in AP.
While management is pleased with this accomplishment which continues to move the company forward towards breakeven, it cautions that Q1-2024 may not demonstrate the same results, for several reasons.
First, the pathology business typically experiences a seasonal decline during the year-end holidays, which would impact revenue and cash receipts going into the start of Q1-2024. Basic human psychology has taught us that people tend to prefer to put off “bad news” (such as being diagnosed with cancer) until after the holidays. Subsequently, new patient visits to our customers decline, and with it drops the biopsy volume received in our laboratory.
Second, many insurance plans reset at the start of the calendar year. This means that patients must first meet their deductibles before insurance payments begin to kick in. While historically we have not seen an adverse impact in overall cash collection rates, we have experienced a lag of 30-60 days in the receipt of payments from some insurance carriers, which will impact cash receipts in Q1 of 2024.
Notwithstanding the above mentioned “seasonal” effects, the Q4-2023 CBFO results demonstrate the company’s ability to approach cash flow breakeven. With the high variable margins generated by product sales, management believes that achieving incremental growth to close the remaining gap is very much attainable.
“Seeing the results of our business impact cash flow in this way is extremely promising, and further validates our business model. I’m proud of my team for their continued hard work in business development and providing high quality service to our customers; but also in achieving increased operating efficiencies, which are resulting in the successful conversion of the business operations into cash,” said Ilan Danieli, Precipio’s CEO, “Results like these strengthen our confidence in our company’s ability to reach financial independence, and continue to grow and invest in our business to capture significant market share.”
About Precipio
Precipio is a healthcare biotechnology company focused on cancer diagnostics. Our mission is to address the pervasive problem of cancer misdiagnoses by developing solutions in the form of diagnostic products and services. Our products and services deliver higher accuracy, improved laboratory workflow, and ultimately deliver better patient outcomes which reduce healthcare expenses. Precipio develops innovative technologies in our clinical laboratory where we design, test, validate, and run these products intended to improve diagnostic outcomes. Precipio then commercializes its technologies as proprietary products that serve the global laboratory community and further scales Precipio’s reach to eradicate misdiagnosis. For more information, please visit www.precipiodx.com.
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Forward-Looking Statements
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