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 WAVE(TM) system and the Gram-Negative assay. This quarter also marked a significant milestone with FDA clearance of our Accelerate Arc(TM) 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 STOCKHOLDERS' DEFICIT



     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                                                                             25            14
    September 30, 2024 and 14,569,500 shares issued and outstanding on December 31, 2023



              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                                                    
     $       -                   $25,363
    of common stock with related party



              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.