On August 4, 2015 NanoString Technologies, Inc. (NASDAQ:NSTG), a provider of life science tools for translational research and molecular diagnostic products, reported financial results for the second quarter ended June 30, 2015 (Press release, NanoString Technologies, AUG 4, 2015, View Source [SID:1234507005]).

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Second Quarter Financial Highlights:

Total revenue of $13.1 million, 20% year-over-year growth
Total product and service revenue of $12.5 million, 22% year-over-year growth
Instrument revenue of $4.4 million, 17% year-over-year growth
Consumables revenue of $7.4 million, including $0.6 million of Prosigna IVD kits, 23% year-over-year growth
"Our momentum continued to build through the second quarter, with important progress toward each of our strategic objectives, including intensifying our focus on oncology and expanding our addressable markets through product launches," said President and Chief Executive Officer, Brad Gray. "We have meaningfully strengthened our immuno-oncology effort with the addition of Alessandra Cesano as our Chief Medical Officer and our collaboration with Merck on the development program for KEYTRUDA (pembrolizumab). With the launch of our new nCounter SPRINT Profiler and our initial RNA:Protein application, we have expanded our addressable market substantially and further differentiated our technology in the field of tumor profiling."

Recent Business Highlights:

Grew installed base to over 300 nCounter Analysis Systems at June 30, 2015

Launched the nCounter SPRINT Profiler to meet the needs of the individual researcher and expand the company’s addressable market

Entered collaboration with Merck to evaluate the feasibility of developing an immune-related gene expression assay for use in the development program of KEYTRUDA

Named oncologist Alessandra Cesano, M.D., Ph.D. as Chief Medical Officer

Published clinical study in Clinical Cancer Research confirming the ability of Prosigna to predict response to chemotherapy

Received favorable draft local coverage determination from the Palmetto GBA MolDx program for Medicare coverage of Prosigna and acknowledgement of Prosigna in NCCN Breast Cancer Guidelines

Second Quarter Financial Results

Revenue for the three months ended June 30, 2015 rose 20% to $13.1 million, from $10.9 million for the second quarter of 2014. Instrument revenue was $4.4 million, up 17% from the prior year period. Consumables revenue, excluding Prosigna, was $6.8 million for the second quarter of 2015, 17% higher than in the comparable 2014 quarter. Prosigna revenue was $592,000 for the quarter, and collaboration revenue totaled $568,000. Gross margin on product and service revenue was 53% for the second quarter of both 2015 and 2014.

Research and development expense increased to $5.8 million for the second quarter of 2015, versus $5.3 million for the second quarter of 2014, largely reflecting increased costs related to the development of new research products and related technology. Selling, general and administrative expense was $12.8 million for the second quarter of 2015 compared to $12.9 million for the prior year period, which reflects cost efficiencies resulting from streamlining the sales and marketing organization, partially offset by increased administration and facility costs.

Net loss for the three months ended June 30, 2015 was $12.4 million, or a loss of $0.66 per diluted share, compared with $14.1 million, or a loss of $0.78 per diluted share, for the second quarter of 2014.

Outlook for 2015:

The company is updating its financial outlook for 2015 as follows:

Total revenue in the range of $60 million to $63 million, compared to the previous range of $58 million to $61 million
Gross margin in the range of 53% to 55%, unchanged
Operating expenses in the range of $77 million to $81 million, unchanged
Operating loss in the range of $41 million to $47 million, compared to the previous range of $43 million to $49 million