On November 2, 2015 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the third quarter ended September 30, 2015 (Press release, NanoString Technologies, NOV 2, 2015, View Source [SID:1234507888]).

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Third Quarter Financial Highlights

Total revenue of $15.7 million, 27% year-over-year growth
Total product and service revenue of $13.9 million, 23% year-over-year growth
Consumables revenue of $9.0 million, including $0.7 million of Prosigna IVD kits, 44% year-over-year growth
Instrument revenue of $4.3 million, 6% year-over-year decline
"Positive third quarter results reflect increasing momentum as we continue to strengthen our leadership position in the field of precision oncology," said President and Chief Executive Officer, Brad Gray. "We are continuing to expand our target markets through new product innovation, such as the recent introductions of our nCounter SPRINT Profiler and our first 3D Biology product, which enables immuno-oncology researchers to make new biological observations while maximizing the data generated from valuable samples."

Recent Business Highlights

Grew installed base to over 320 nCounter Analysis Systems at September 30, 2015
Launched nCounter SPRINT Profiler, a more affordable system designed to meet the needs of the individual researcher
Launched nCounter RNA:Protein PanCancer Immune Profiling Panel, the company’s first 3D Biology application, which expands the company’s immuno-oncology portfolio and provides a powerful tool for researchers
Expanded collaboration with Celgene to include additional countries, such as China and Russia
Received favorable final local coverage determination by Palmetto GBA’s MolDx program for Prosigna, which became effective on Oct 1, 2015
Inclusion of Prosigna in the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) clinical practice guidelines, which recognized Prosigna’s value in determining the potential benefit from chemotherapy in breast cancer patients

Third Quarter Financial Results

Revenue for the three months ended September 30, 2015 rose 27% to $15.7 million, from $12.3 million for the third quarter of 2014. Instrument revenue was $4.3 million, down 6% from the prior year period, reflecting lower sales volumes in the Asia Pacific region. Consumables revenue, excluding Prosigna, was $8.4 million for the third quarter of 2015, 40% higher than in the comparable 2014 quarter. Prosigna revenue was $662,000 for the quarter, and collaboration revenue totaled $1.8 million. Gross margin on product and service revenue was 55% for the third quarter of 2015, up from 53% in the third quarter of 2014.

Research and development expense was $5.8 million for the third quarter of 2015, roughly flat versus $6.0 million for the third quarter of 2014. Selling, general and administrative expense was $12.0 million for the third quarter of 2015 compared to $12.5 million for the prior year period, reflecting efficiencies gained through streamlining the sales and marketing organization.

Net loss for the three months ended September 30, 2015 was $9.5 million, or a loss of $0.49 per diluted share, compared with $12.1 million, or a loss of $0.67 per diluted share, for the third quarter of 2014.

Outlook for 2015

The company’s financial outlook for 2015 includes:

Total revenue in the range of $60 million to $63 million, unchanged
Gross margin of approximately 53%, previously 53% to 55%
Operating expenses in the range of $76 million to $78 million, previously $77 million to $81 million
Operating loss in the range of $40 million to $44 million, previously $41 million to $47 million