On March 1, 2021 NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider of life science tools for discovery and translational research, reported financial results for the fourth quarter and year ended December 31, 2020 (Press release, NanoString Technologies, MAR 1, 2021, View Source [SID1234575872]).
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Fourth Quarter Financial Highlights
Product and service revenue of $35.7 million, 6% year-over-year growth. On a pro forma basis, reflecting the impact of the Veracyte transaction on revenue recorded for Prosigna IVD kits, product and service revenue increased by 9%
Instrument revenue of $15.3 million, 11% year-over-year growth. Instrument revenue includes $9.3 million of GeoMx Digital Spatial Profiler (DSP) instrument revenue
Consumables revenue of $16.6 million, 2% year-over-year decline. On a pro forma basis, reflecting the impact of the Veracyte transaction, consumables revenue increased by 3%. Consumables revenue includes $2.8 million of GeoMx DSP consumables revenue
Service revenue of $3.8 million, 29% year-over-year growth
Full Year 2020 Financial Highlights
Product and service revenue of $111.4 million, 7% year-over-year growth. Pro forma growth was 14%
Instrument revenue of $47.8 million, 54% year-over-year growth. Instrument revenue includes $29.6 million of GeoMx DSP instrument revenue
Consumables revenue of $50.1 million, 18% year-over-year decline. On a pro forma basis, consumables revenue decreased 10%. Consumables revenue includes $5.3 million of GeoMx DSP consumables revenue
Service revenue of $13.5 million, 16% year-over-year growth
Cash, cash equivalents and short-term investments balance of $440.7 million
"During 2020, we successfully achieved all of our strategic objectives against the challenging operating backdrop of the COVID-19 pandemic. We extended our leadership in spatial biology, growing GeoMx DSP instrument orders by 50% and opening up a large market opportunity in basic discovery through the introduction of the first next generation sequencing panels for GeoMx," said Brad Gray, president and CEO of NanoString. "We look forward to continuing our momentum in 2021, with key catalysts including the commercial launch of our GeoMx Whole Transcriptome Atlas and a Technology Access Program service for our recently unveiled Spatial Molecular Imager."
Recent Business Highlights
Nature Methods 2020 "Method of the Year": Leading scientific journal Nature Methods announced that spatially resolved transcriptomics was selected as their 2020 "Method of the Year"
Spatial Genomics Summit: Held third annual Spatial Genomics Summit on February 23rd, focused on scientific advancements and new technology in the spatial genomics market. Panelists included leading researchers from Bristol-Myers Squibb, Harvard Medical School, Wellcome Sanger Trust and the Fred Hutchinson Cancer Research Center
Advances in Genome Biology and Technology (AGBT) Conference: Hosted Gold Sponsorship Workshop focused on "Progressing Spatial Biology from Tissue Architecture to Sub-cellular Functions." AGBT included more than 20 posters and presentations on spatial biology using GeoMx DSP and our Spatial Molecular Imager
GeoMx DSP
GeoMx Shipments and Installations: Shipped approximately 40 and installed approximately 30 GeoMx DSP instruments in the fourth quarter, bringing cumulative shipments to more than 160 and cumulative installs to approximately 130 instruments since launch
Launch of Whole Transcriptome Atlas: Announced the commercial availability of the GeoMx Whole Transcriptome Atlas, which provides expanded access to next generation sequencing (NGS) readout on GeoMx DSP
Continued Growth of GeoMx Technology Access Program (TAP): Generated a record of 87 new GeoMx TAP project orders in the fourth quarter, of which more than 40% used our Whole Transcriptome Atlas with NGS readout. As of December 31, 2020, we have conducted over 430 TAP projects for approximately 200 customers
Publications: Continued growth of peer-reviewed publications utilizing GeoMx DSP technology, with 6 new publications in the fourth quarter, bringing the cumulative total to 35 peer-reviewed publications as of December 31, 2020
Spatial Molecular Imager
Unveiled Spatial Molecular Imaging Platform: Announced the development of the Spatial Molecular Imager, a new spatial biology platform capable of measuring the expression of 1,000+ genes at single-cell and sub-cellular resolution
Launch of Spatial Molecular Imager under TAP: Announced a new SMI TAP service offering, providing the opportunity for customers to access the capabilities of SMI in 2021 by sending their biological samples to our Seattle, WA facility to be analyzed
nCounter
nCounter Installed Base: Grew installed base to approximately 950 nCounter Analysis Systems at December 31, 2020, representing 13% growth over the prior year
Publications: Surpassed 4,000 cumulative peer-reviewed publications utilizing nCounter technology, representing continued research momentum for the nCounter platform
Fourth Quarter Financial Results
We have elected to present selected non-GAAP, or adjusted, financial measures, including Adjusted EBITDA. These adjusted financial measures are calculated excluding certain items that may make it more challenging to compare our GAAP operating results across periods. Such items may include collaboration revenue, stock-based compensation, depreciation and amortization, or one-time charges such as transaction related fees and expenses or restructuring charges and severance costs. A reconciliation of adjusted financial measures to the nearest comparable GAAP financial measure can be found in the notes and table at the end of this press release.
2021 Outlook
The company, based on its plans and initiatives for 2021, expects to record results approximately as follows:
Total product and service revenue of $140 to $150 million, representing growth of 26% to 35% as compared to 2020
GeoMx DSP revenue of $45 to $50 million
nCounter revenue, inclusive of all service revenue, of $95 to $100 million
Adjusted gross margin on product and service revenue of 55% to 57%
Adjusted operating expenses of $145 to $155 million
Adjusted EBITDA loss of $65 to $70 million
Supplemental Information
As a supplement to the table above, we have posted to the investor relations section of our website, at www.nanostring.com, supplemental financial data that includes our adjusted financial measures as compared to the nearest comparable GAAP financial measures, for the fourth quarter and the full year of 2020 and for each quarter and the full year of 2019.
Conference Call
Management will host a conference call today beginning at 1:30 pm PT / 4:30 pm ET to discuss these results and answer questions. Investors and other interested parties can register for the call in advance by visiting View Source After registering, an email confirmation will be sent, including dial-in details and unique conference call codes for entry. Registration is open throughout the call but to ensure connection for the full call, registration in advance is recommended. The link to the webcast and audio replay will be made available at the Investor Relations website: www.nanostring.com. A replay of the call will be available beginning March 1, 2021 at 7:30pm ET through midnight ET on March 8, 2021. To access the replay, dial (800) 585-8367 or (416) 621-4642 and reference Conference ID: 3093307. The webcast will also be available on our website for one year following the completion of the call.
Non-GAAP, or Adjusted, Financial Information
We believe that the presentation of non-GAAP, or adjusted, financial information provides important supplemental information to management and investors regarding financial and business trends relating to our financial condition and results of operations. Reconciliation of adjusted financial measures to the most directly comparable financial result as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of adjusted guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding certain expenses that may be incurred in the future. For further information regarding why we believe that these adjusted measures provide useful information to investors, the specific manner in which management uses these measures and some of the limitations associated with the use of these measures, please refer to "Notes Regarding Non-GAAP Financial Information" at the end of this press release.
Pro Forma Financial Information
As used in this press release, "pro forma" percentages are calculated by comparing the applicable period-over-period financial results to reflect the impact of the Veracyte transaction as if such transaction had occurred on January 1, 2019, the beginning of the earliest period presented. Further disclosure regarding the terms and pro forma impact of the Veracyte transaction can be obtained in our Current Report on Form 8-K filed with the Securities and Exchange Commission on December 4, 2019.