Accelerate Diagnostics Reports Third Quarter 2024 Financial Results

TUCSON, Ariz., Nov. 7, 2024 /PRNewswire/ -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today announced financial results for the third quarter ended September 30, 2024.

“We are excited by the momentum we’re building across our innovation pipeline, underscored by the successful launch of the clinical trial for our WAVETM system and the Gram-Negative assay. This quarter also marked a significant milestone with FDA clearance of our Accelerate ArcTM system, a testament to our commitment to breakthrough solutions in diagnostics,” commented Jack Phillips, President and CEO of Accelerate Diagnostics, Inc. “Alongside these advances, we’ve continued to make meaningful progress in our commercial strategy, all while exercising disciplined financial management, which we believe will help drive sustainable growth for our company,” Mr. Phillips continued.

Third Quarter 2024 Operating Highlights

  • Began WAVE system and Gram-Negative assay clinical trial.

  • Received 510(k) clearance of the Accelerate Arc system and BC kit, an innovative, automated positive blood culture sample preparation platform.

  • Continued to executed contract extensions with several strategic customers with approximately 75% of U.S. Pheno® customers secured through the anticipated WAVE commercial launch, subject to regulatory approvals.

  • In the United States, added five new contracted Pheno instruments during the quarter, ending the quarter with 352 clinically live revenue-generating instruments and another 77 contracted instruments in the process of being implemented.

Third Quarter 2024 Financial Highlights

  • Net sales for the quarter were $3.0 million, compared to $3.3 million for the same quarter of the prior year. The overall decline was driven by lower instrument net sales but was partially offset by an increase from consumable products of 9% compared to the same period in the prior year.

  • Gross margin was approximately 29% for the quarter, compared to approximately 3% for the same quarter of the prior year. The increase in gross margin reflects both product sales mix, as well as an inventory write-down in the prior year period.

  • Selling, general, and administrative (SG&A) costs for the quarter were $5.6 million, compared to $7.8 million for the same quarter of the prior year. SG&A costs include non-cash stock-based compensation of $1.0 million and $1.5 million, respectively, for the same periods. The decline in SG&A costs is primarily a result of lower employee-related expenses.

  • Research and development (R&D) costs for the quarter were $3.8 million, compared to $7.0 million for the same quarter of the prior year. R&D costs include non-cash stock-based compensation of $0.2 million and $0.3 million, respectively, for the same periods. The decline in R&D costs is primarily a result of lower third-party development costs for our WAVE system.

  • Net loss was $14.6 million for the quarter, resulting in a net loss per share of $0.59.

  • Ended the quarter with total cash, cash equivalents and investment of $20.9 million, compared to $9.7 million at the start of the quarter. The increase in cash and cash equivalents reflects proceeds from our recent debt issuance of $15 million in aggregate principal, as well as $1.2 million from a refundable R&D tax offset and $0.5 million of proceeds from warrant exercises.

Year-to-date Financial 2024 Highlights

  • Net sales were $8.9 million year-to-date, compared to $9.0 million for the same period of the prior year. The decrease in revenues was driven by lower consumable products sold in the current year period.

  • Gross margin was approximately 25% year-to-date, compared to 21% for the same period of the prior year.

  • SG&A costs year-to-date were $16.7 million, compared to $25.4 million for the same period of the prior year. SG&A costs include non-cash stock-based compensation of $2.6 million for each of these periods. The decline in SG&A costs is primarily a result of lower employee-related expenses.

  • R&D costs were $12.9 million year-to-date, compared to $19.8 million for the same period of the prior year. R&D costs include non-cash stock-based compensation of $0.7 million and $1.1 million, respectively, for the same periods. The decline in R&D costs is primarily a result of lower employee-related expenses, as well as lower third-party development costs for our WAVE system.

  • Net loss was $40.5 million year-to-date, resulting in a net loss per share of $1.78.

Full financial results for the quarter ended September 30, 2024 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

Management will host a conference call on Thursday, November 7, 2024, at 4:30 p.m. Eastern Time to review third quarter 2024 results.

To listen to the audio webcast online, visit ir.axdx.com. A replay of the audio webcast will be available for 30 days.

To listen by phone, dial 1.877.883.0383 and enter the Elite Entry Number: 1269422. 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 2603705 until November 28, 2024.

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 operating income (loss) amounts excluding stock-based compensation expenses.

Our management and board of directors use expenses excluding the cost of stock-based compensation and certain impairment transactions 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 and certain impairment transactions 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 and certain impairment transactions are non-GAAP financial measures and should be considered in addition to, not as superior to, or as a substitute for, SG&A expenses, R&D expenses, and operating income (loss) reported in accordance with GAAP. The following tables present a reconciliation of SG&A expenses, R&D expenses and operating income (loss) excluding stock-based compensation and certain impairment transactions to comparable GAAP measures for the periods indicated:

Three Months Ended

September 30,

(in thousands)

2024

2023

Sales, general and administrative

$5,636

$7,761

Non-cash equity-based compensation as a component of sales, general and administrative

963

1,488

Sales, general and administrative less non-cash equity-based compensation

$4,673

$6,273

Three Months Ended

September 30,

(in thousands)

2024

2023

Research and development

$3,838

$6,996

Non-cash equity-based compensation as a component of research and development

182

269

Research and development less non-cash equity-based compensation

$3,656

$6,727

Three Months Ended

September 30,

(in thousands)

2024

2023

Loss from operations

$8,618

$14,650

Non-cash equity-based compensation as a component of loss from operations

1,155

1,815

Inventory write-down

0

1,184

Loss from operations less non-cash equity-based compensation and inventory write-down

$7,463

$11,651

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. In addition to the Accelerate Arc system, 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 Accelerate Pheno system and Accelerate PhenoTest BC kit fully automate sample preparation, identification and phenotypic antibiotic susceptibility testing in approximately seven hours directly 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.

© Copyright 2024 Accelerate Diagnostics, Inc. All Rights Reserved. The “ACCELERATE DIAGNOSTICS,” “ACCELERATE PHENO,” “ACCELERATE PHENOTEST,” “ACCELERATE ARC” and “ACCELERATE WAVE” diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc. All other trademarks are the property of their respective owners.

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 within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the company intends that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking statements, which can be identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” or “continue,” or variations thereon or comparable terminology, include but are not limited to, statements about: the company’s future development plans and growth strategy, including beliefs, plans and objectives relating to its future operations, products and performance, such as the anticipated WAVE commercial launch; projections as to when certain key business milestones may be achieved; expectations regarding the potential or benefits of the company’s existing and future products and technologies, including the Accelerate Wave system, such as the expectation of the performance of the Wave system based on pre-clinical trials; 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, including anticipated benefits from such collaborations; the company’s intentions 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, whether due to customer demand fluctuations, supply chain constraints and inflationary pressures or otherwise; difficulties in resolving the company’s continuing financial condition and ability to obtain additional capital to meet its financial obligations; the company’s ability to obtain any regulatory approvals; and less than expected operating and financial benefits resulting from cost cutting measures. 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. These forward-looking statements are also based on certain additional assumptions, including, but not limited to, that the company will retain key management personnel; the company will be successful in the commercialization of its products; the company will obtain sufficient capital to commercialize its products and continue development of complementary products; the company will be successful in obtaining marketing authorization for its products from the FDA and other regulatory agencies and governing bodies; the company will be able to protect its intellectual property; the company’s ability to respond effectively to technological change; the company’s ability to accurately anticipate market demand for its products; and that there will be no material adverse change in the company’s operations or business and general market and industry 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. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing the company’s plans and expectations as of any subsequent date.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS

(in thousands, except share data)

September 30,

December 31,

2024

2023

Unaudited

ASSETS

Current assets:

Cash and cash equivalents

$ 19,691

$ 12,138

Investments

1,221

1,081

Trade accounts receivable, net

2,027

2,622

Inventory

2,978

3,310

Prepaid expenses

529

380

Purchase obligation put option asset

3,419

Other current assets

990

1,516

Total current assets

27,436

24,466

Property and equipment, net

2,878

2,389

Finance lease assets, net

626

1,518

Operating lease right of use assets, net

612

1,177

Other non-current assets

763

1,816

Total assets

$ 32,315

$ 31,366

LIABILITIES AND STOCKHOLDERSDEFICIT

Current liabilities:

Accounts payable

$ 4,714

$ 4,796

Accrued liabilities

2,940

3,243

Accrued interest

1,010

164

Deferred revenue and income, current

671

1,545

Current portion of convertible notes

726

Common warrant liability

8,001

Finance lease, current

115

583

Operating lease, current

807

977

Total current liabilities

18,258

12,034

Finance lease, non-current

47

262

Operating lease, non-current

570

Deferred income, non-current

2,469

1,122

Other non-current liabilities

2,017

1,164

Notes payable, non-current

14,995

Convertible notes, non-current

43,010

36,102

Total liabilities

80,796

51,254

Commitments (see Note 15)

See accompanying notes to condensed consolidated financial statements.

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEETS (CONTINUED)

(in thousands, except share data)

September 30,

December 31,

2024

2023

Unaudited

Stockholders’ deficit:

Preferred shares, $0.001 par value;

5,000,000 preferred shares authorized with no shares issued and outstanding on September 30,

2024 and December 31, 2023

Common stock, $0.001 par value;

450,000,000 common shares authorized with 24,886,822 shares issued and outstanding on

September 30, 2024 and 14,569,500 shares issued and outstanding on December 31, 2023

25

14

Contributed capital

706,931

694,634

Treasury stock

(45,067)

(45,067)

Accumulated deficit

(709,313)

(668,857)

Accumulated other comprehensive loss

(1,057)

(612)

Total stockholders’ deficit

(48,481)

(19,888)

Total liabilities and stockholders’ deficit

$ 32,315

$ 31,366

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,

2024

2023

2024

2023

Net sales

$ 2,975

$ 3,299

$ 8,882

$ 9,032

Cost of sales

2,119

2,008

6,627

5,931

Inventory write-down

1,184

1,184

Total cost of sales

2,119

3,192

6,627

7,115

Gross profit

856

107

2,255

1,917

Costs and expenses:

Research and development

3,838

6,996

12,914

19,783

Sales, general and administrative

5,636

7,761

16,719

25,432

Total costs and expenses

9,474

14,757

29,633

45,215

Loss from operations

(8,618)

(14,650)

(27,378)

(43,298)

Other income (expense):

Interest expense

(3,593)

(2,205)

(8,632)

(3,798)

Interest expense related-party

(1,817)

Gain (loss) on extinguishment of debt

51

(6,499)

(Loss) on extinguishment of debt related-party

(6,755)

Gain on extinguishment of accounts payable

743

Gain (loss) on fair value adjustments

(3,194)

18,056

(5,413)

13,026

Foreign currency exchange gain (loss)

523

(428)

279

(170)

Interest income

179

246

495

921

Other income (expense), net

64

(29)

(550)

56

Total other income (expense), net

(6,021)

15,691

(13,078)

(5,036)

Net income (loss) before income taxes

(14,639)

1,041

(40,456)

(48,334)

Provision for income taxes

(131)

(286)

Net income (loss)

$ (14,639)

$ 910

$ (40,456)

$ (48,620)

Basic net income (loss) per share

$ (0.59)

$ 0.06

$ (1.78)

$ (4.13)

Basic weighted average shares outstanding

24,915

14,433

22,667

11,777

Other comprehensive loss:

Net income (loss)

$ (14,639)

$ 910

$ (40,456)

$ (48,620)

Net unrealized gain on debt securities available for sale

28

Foreign currency translation adjustment

(609)

293

(445)

12

Comprehensive income (loss)

$ (15,248)

$ 1,203

$ (40,901)

$ (48,580)

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,

2024

2023

Cash flows from operating activities:

Net loss

$ (40,456)

$ (48,620)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

2,613

2,434

Equity-based compensation

3,418

4,023

Amortization of debt discount and issuance costs

6,025

2,060

Paid-in-Kind (PIK) Interest

2,036

Amortization of debt discount related-party

1,033

Provision for bad debts

95

252

Loss on disposal of property and equipment

106

134

Unrealized gain on equity investments

(129)

(61)

Units offering issuance cost

680

Loss on extinguishment of debt

6,499

Loss on extinguishment of debt with related party

6,755

Gain on extinguishment of accounts payable

(743)

Loss on fair value adjustments

5,413

(13,026)

Inventory write-down

1,184

(Increase) decrease in assets:

Accounts receivable

510

(283)

Inventory

(37)

298

Prepaid expense and other

597

737

Increase (decrease) in liabilities:

Accounts payable

661

218

Accrued liabilities and other

(1,234)

261

Accrued interest

846

1,738

Accrued interest due to related party

784

Deferred revenue and income

473

1,139

Net cash used in operating activities

(19,126)

(32,441)

Cash flows from investing activities:

Purchases of equipment

(509)

(925)

Maturities of marketable securities

9,695

Net cash (used in) provided by investing activities

(509)

8,770

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,

2024

2023

Cash flows from financing activities:

Proceeds from issuance of Units to related party

4,750

Proceeds from issuance of Units

10,232

Units offering issuance cost

(1,234)

Proceeds from issuance of common stock to related party

4,000

Proceeds from exercise of warrants

502

Payments on finance leases

(683)

(1,357)

Proceeds from issuance of 16.00% Notes

15,000

Transaction costs related to debt and equity issuances

(202)

(3,731)

Proceeds from issuance of 5.00% Notes

10,000

Payment of debt

(726)

Net cash provided by financing activities

27,639

8,912

Effect of exchange rate on cash

(451)

16

Decrease in cash and cash equivalents

7,553

(14,743)

Cash and cash equivalents, beginning of period

12,138

34,905

Cash and cash equivalents, end of period

$ 19,691

$ 20,162

Non-cash investing activities:

Net transfer of instruments from inventory to property and equipment

$ 321

$ 88

Non-cash financing activities:

Accrued debt issuance costs

$ 566

$ —

Extinguishment of 5.00% Notes through issuance of common stock

$ 43

$ 330

Capital contribution from the exchange of secured note and accrued interest through the issuance

of common stock with related party

$ —

$ 25,363

Exchange of 2.50% Notes and accrued interest for 5.00% Notes

$ —

$ 56,893

Debt premium on issuance of 5.00% Notes

$ —

$ 6,023

Bifurcated derivative liability

$ —

$ 38,160

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

$ 33

$ —

See accompanying notes to condensed consolidated financial statements.

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SOURCE Accelerate Diagnostics, Inc.

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