OpGen Reports third quarter 2018 Financial Results and Provides Business Update
November 13 2018 - 4:02PM
Conference call begins at 4:30 p.m.
Eastern time today
OpGen, Inc. (NASDAQ: OPGN) today reported financial and operating
results for the three and nine months ended September 30, 2018 and
provided a business update. Total revenue for the third quarter of
2018 was $0.6 million, compared with $0.7 million for the
third quarter of 2017. Total revenue for the first nine months of
2018 was $2.2 million, consistent with the $2.2 million reported
for the comparable 2017 period. Recent business highlights include:
- Announcement of groundbreaking collaboration with the New York
State Department of Health (“DOH”) and ILÚM Health Solutions, LLC
(“ILÚM”), a wholly owned subsidiary of Merck’s Healthcare Services
and Solutions, to develop a state-of-the-art research program to
detect, track, and manage antimicrobial-resistant infections at
healthcare institutions statewide;
- Entry into collaboration with QIAGEN N.V. to advance rapid
diagnostics for antimicrobial resistance based on QIAGEN’s EZ1
instrumentation and reagent kits in the U.S.;
- Completion of specimen accrual and testing in Acuitas® clinical
verification study with Beth Israel Deaconess Medical Center,
Geisinger, and Intermountain Healthcare for initial verification of
our Acuitas AMR Gene Panel tests and Acuitas Lighthouse
software;
- Starting testing of stock bacterial isolates and analytical
validation testing of IUO product to support the Acuitas AMR Gene
Panel (Isolates) 510(k) FDA submission to be submitted in early
2019:
- Successful completion of Centers for Disease Control and
Prevention (CDC) funded program for development of smartphone-based
clinical decision support software with hospital testing in
Colombia. Final reporting and fourth milestone payment expected
during the fourth quarter of 2018;
- Increased installed base of Acuitas AMR Gene Panel instruments
at clinical evaluation sites and commercial customers to ten
systems;
- Completed public offering of common stock with gross proceeds
of $3.2 million in October 2018;
- Reduced Net Loss by 22.6%, or $2.8 million, compared to the
prior year period for the first nine months of 2018 to $9.6
million.
“OpGen’s achievements during the third quarter
position the company for continued success during 2018 and beyond.
We are proud to be a part of the groundbreaking initiative
throughout the State of New York, and to collaborate with Wadsworth
and ILÚM to help develop the blueprint for how governments and
healthcare facilities can detect, track, and manage
antimicrobial-resistant infections,” said Evan Jones, Chairman and
CEO. “We are very pleased with progress to date in developing our
lead rapid test, the Acuitas® AMR Gene Panel u5.47 (RUO).
Last week we announced the completion of specimen accrual and
testing of 670 urine specimens for the clinical verification study
with this test and the Acuitas Lighthouse® Software. The
preliminary results of the clinical verification study support our
plans to introduce our Acuitas AMR Gene Panel and Acuitas
Lighthouse Software for under three-hour detection of urinary tract
infections with concurrent prediction of resistance to front-line
antibiotics. Results are expected to be published in a
peer-reviewed journal in the first half of 2019.
“The New York State DOH infectious disease
digital health and precision medicine platform will monitor results
in real time across healthcare organizations to help identify
patients with antimicrobial resistant infections. This program has
potential to be truly transformative for OpGen. We are providing
the Acuitas AMR Gene Panel u5.47 and customized Acuitas Lighthouse
Software. The initial contract is for $1.5 million for 12 months
during 2019, with potential for much greater funding should certain
milestones be achieved. In addition, we are hopeful that following
the success of this program, other states will follow suit in
efforts to identify and combat antibiotic-resistant organisms.
“While our Acuitas AMR Gene Panel u5.47 is being
marketed for research use only, we are preparing for broader
commercialization upon receipt of FDA clearance. We recently
announced a supply agreement with QIAGEN to resell their EZ1
Advanced XL automated nucleic acid purification instrumentation
(EZ1) and reagent kits in the U.S. The EZ1 will be utilized in the
test workflow for our Acuitas AMR Gene Panel u5.47 products. This
family of rapid diagnostics has been designed to detect and
identify multidrug-resistant bacterial pathogens in urine and
bacterial isolates in less than three hours. The test was developed
for use with the Acuitas Lighthouse Software for predicting
antibiotic resistance and high-resolution pathogen tracking. This
agreement with QIAGEN builds on our agreement with Thermo Fisher
Scientific to use their real-time PCR technology in our Acuitas AMR
Gene Panel Tests, which was signed in early 2018.”
Third Quarter and Nine Month 2018
Financial Results
- Total revenue for the third quarter of 2018 was $0.6
million, compared with $0.7 million for the third quarter of 2017.
The decrease was due to a decline in revenue from legacy QuickFISH®
rapid diagnostic testing products. Total revenue for the nine
months ended September 30, 2018 was $2.2 million, consistent with
the $2.2 million reported for the nine months ended September 30,
2017.
- Operating expenses for the third quarter of 2018 were $3.8
million, compared with $3.9 million for the third quarter of 2017.
Operating expenses for the first nine months of 2018 were $11.7
million, compared with $14.6 million for the first nine months of
2017.
- The net loss for the third quarter of 2018 was $3.3
million or $0.53 per share, compared with a net loss of $3.3
million or $1.74 per share for the third quarter of 2017. The net
loss for the nine months ended September 30, 2018 was $9.6 million
or $1.80 per share, compared with a net loss of $12.5 million or
$9.17 per share for the nine months ended September 30, 2017.
- Cash Position: Cash and cash equivalents were $4.7 million
as of September 30, 2018, compared with $1.8 million as of December
31, 2017. The company closed a public offering with $2.8 million
net proceeds on October 22, 2018.
Business and Operations
Outlook
- File a 510(k) submission with the FDA in early 2019 for the
Acuitas AMR Gene Panel u5.47 (IVD) to support full commercial
launch for clinical use for testing of bacterial isolates;
- Complete clinical evaluations and file 510(k) submissions with
the FDA for the Acuitas AMR Gene Panel u5.47 (IVD) and the Acuitas
Lighthouse Software for rapid testing of urine specimens and
prediction of antibiotic resistance to front-line antibiotics;
- Achieve program milestones for New York State Infectious
Disease Digital Health initiative including installation of Acuitas
systems at New York City metro area health systems and the
Wadsworth Laboratories and completion of development of customized
Acuitas Lighthouse Software to support ILÚM real-time monitoring
data from Regional Health Information Organizations (RHIO) and
incorporation of whole genome sequencing data;
- Complete registration process with Colombia regulatory
authorities to allow OpGen to commence commercial operations in the
country and expand sales of rapid test products and software
products in South America;
- Complete CDC contract final report for development of
smartphone-based clinical decision support solutions for
anti-microbial stewardship and infection control in low- and
middle-income countries and associated contracting activities to
allow commercialization of the software developed during the
project;
- Continue to install Acuitas AMR Gene Panel systems in support
of Research Use Only sales and full launch following first FDA
clearance.
Conference Call Information
OpGen management will hold a conference
call today beginning at 4:30 p.m. Eastern time to discuss
third quarter financial results and other business activities, and
answer questions. The call can be accessed by dialing (888)
883-4599 (domestic) or (484) 653-6821 (international) and providing
conference ID: 9163687. A live webcast of the conference call
can be accessed by visiting the Investor Relations section of the
company’s website at www.ir.opgen.com. A replay of the webcast
will be available shortly after the conclusion of the call for 90
days.
A telephone replay of the conference call will
be available from 7:30 p.m. Eastern time today through November 19,
2018 and can be accessed by dialing (855) 859-2056 (domestic)
or (404) 537-3406 (international). All listeners should provide the
conference ID: 9163687.
About OpGen
OpGen, Inc. is harnessing the power of
informatics and genomic analysis to provide complete solutions for
patient, hospital and network-wide infection prevention and
treatment. Its Acuitas AMR Gene Panel and Acuitas Lighthouse
software are expected to play a role in the identification of
multi-drug resistant organisms. For more information, please visit
www.opgen.com.
OpGen, Acuitas, and Acuitas Lighthouse are
registered trademarks of OpGen, Inc. EZ1 is a registered
trademark of QIAGEN.
The Acuitas AMR Gene Panel u5.47 (RUO) is
intended for Research Use Only and is not for use in diagnostic
procedures. The Acuitas Lighthouse Software is not distributed
commercially for antibiotic resistance prediction and is not for
use in diagnostic procedures.
Forward-Looking Statements
This press release includes statements relating
to OpGen’s third quarter 2018 and nine months 2018 results. These
statements and other statements regarding OpGen’s future plans and
goals constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, and are intended to qualify for
the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. Such statements are
subject to risks and uncertainties that are often difficult to
predict, are beyond our control, and which may cause results to
differ materially from expectations. Factors that could cause our
results to differ materially from those described include, but are
not limited to, our ability to successfully complete the
demonstration project portion of the New York State surveillance
contract, successfully, timely and cost-effectively seek and obtain
regulatory clearance for and commercialize our product and services
offerings, the rate of adoption of our products and services by
hospitals and other healthcare providers, the success of our
commercialization efforts, the effect on our business of existing
and new regulatory requirements, and other economic and competitive
factors. For a discussion of the most significant risks and
uncertainties associated with OpGen's business, please review our
filings with the Securities and Exchange Commission. You are
cautioned not to place undue reliance on these forward-looking
statements, which are based on our expectations as of the date of
this press release and speak only as of the date of this press
release. We undertake no obligation to publicly update or revise
any forward-looking statement, whether as a result of new
information, future events or otherwise.
OpGen Contact:Michael
FarmerVice President, Marketing(240)
813-1284mfarmer@opgen.comInvestorRelations@opgen.com
Investor Contacts:LHA Investor
RelationsKim Sutton Golodetz(212) 838-3777kgolodetz@lhai.comorBruce
Voss(310) 691-7100bvoss@lhai.com
(Tables to follow)
|
OpGen, Inc. |
Condensed Consolidated Balance
Sheets |
(unaudited) |
|
|
|
|
|
|
|
September 30, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
4,735,506 |
|
|
$ |
1,847,171 |
|
Accounts
receivable, net |
|
|
315,612 |
|
|
|
809,540 |
|
Inventory, net |
|
|
529,815 |
|
|
|
533,425 |
|
Prepaid
expenses and other current assets |
|
|
457,929 |
|
|
|
311,644 |
|
Total current assets |
|
|
6,038,862 |
|
|
|
3,501,780 |
|
Property
and equipment, net |
|
|
1,150,238 |
|
|
|
835,537 |
|
Goodwill |
|
|
600,814 |
|
|
|
600,814 |
|
Intangible assets, net |
|
|
1,152,320 |
|
|
|
1,353,182 |
|
Other
noncurrent assets |
|
|
280,652 |
|
|
|
328,601 |
|
Total assets |
|
$ |
9,222,886 |
|
|
$ |
6,619,914 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts
payable |
|
$ |
1,036,005 |
|
|
$ |
1,691,712 |
|
Accrued
compensation and benefits |
|
|
1,023,577 |
|
|
|
746,924 |
|
Accrued
liabilities |
|
|
965,178 |
|
|
|
1,160,714 |
|
Deferred
revenue |
|
|
10,323 |
|
|
|
24,442 |
|
Short-term notes payable |
|
|
470,911 |
|
|
|
1,010,961 |
|
Current
maturities of long-term capital lease obligations |
|
|
358,604 |
|
|
|
154,839 |
|
Total current liabilities |
|
|
3,864,598 |
|
|
|
4,789,592 |
|
Deferred
rent |
|
|
196,558 |
|
|
|
290,719 |
|
Note
payable |
|
|
659,728 |
|
|
|
— |
|
Warrant
liability |
|
|
383 |
|
|
|
8,453 |
|
Long-term capital lease obligations and other noncurrent
liabilities |
|
|
472,068 |
|
|
|
130,153 |
|
Total liabilities |
|
|
5,193,335 |
|
|
|
5,218,917 |
|
Stockholders' equity |
|
|
|
|
Common
stock, $0.01 par value; 50,000,000 shares authorized; 6,425,470 and
2,265,320 shares issued and outstanding at
September 30, 2018 and December 31, 2017,
respectively |
|
|
64,255 |
|
|
|
22,653 |
|
Preferred stock, $0.01 par value; 10,000,000 shares authorized;
none issued and outstanding at September 30, 2018 and
December 31, 2017, respectively |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
162,330,283 |
|
|
|
150,114,671 |
|
Accumulated other comprehensive loss |
|
|
(18,838 |
) |
|
|
(25,900 |
) |
Accumulated deficit |
|
|
(158,346,149 |
) |
|
|
(148,710,427 |
) |
Total stockholders’ equity |
|
|
4,029,551 |
|
|
|
1,400,997 |
|
Total liabilities and stockholders’ equity |
|
$ |
9,222,886 |
|
|
$ |
6,619,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OpGen, Inc. |
Condensed Consolidated Statements of
Operations and Comprehensive Loss |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Revenue |
|
|
|
|
|
|
|
|
Product
sales |
|
$ |
539,856 |
|
|
$ |
729,742 |
|
|
$ |
1,805,877 |
|
|
$ |
2,145,371 |
|
Laboratory services |
|
|
12,365 |
|
|
|
9,070 |
|
|
|
22,155 |
|
|
|
41,025 |
|
Collaboration revenue |
|
|
— |
|
|
|
6,302 |
|
|
|
359,316 |
|
|
|
33,699 |
|
Total revenue |
|
|
552,221 |
|
|
|
745,114 |
|
|
|
2,187,348 |
|
|
|
2,220,095 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Cost of
products sold |
|
|
292,984 |
|
|
|
448,407 |
|
|
|
939,479 |
|
|
|
1,266,148 |
|
Cost of
services |
|
|
98,189 |
|
|
|
49,119 |
|
|
|
446,144 |
|
|
|
228,115 |
|
Research
and development |
|
|
1,286,300 |
|
|
|
1,513,157 |
|
|
|
3,821,117 |
|
|
|
5,397,906 |
|
General
and administrative |
|
|
1,743,636 |
|
|
|
1,600,577 |
|
|
|
5,365,221 |
|
|
|
5,319,811 |
|
Sales
and marketing |
|
|
361,310 |
|
|
|
330,305 |
|
|
|
1,117,380 |
|
|
|
2,345,293 |
|
Total operating expenses |
|
|
3,782,419 |
|
|
|
3,941,565 |
|
|
|
11,689,341 |
|
|
|
14,557,273 |
|
Operating loss |
|
|
(3,230,198 |
) |
|
|
(3,196,451 |
) |
|
|
(9,501,993 |
) |
|
|
(12,337,178 |
) |
Other (expense) income |
|
|
|
|
|
|
|
|
Other
(expense) income |
|
|
(93 |
) |
|
|
(87,292 |
) |
|
|
5,210 |
|
|
|
(87,270 |
) |
Interest
expense |
|
|
(28,074 |
) |
|
|
(90,317 |
) |
|
|
(140,453 |
) |
|
|
(173,974 |
) |
Foreign
currency transaction gains (losses) |
|
|
3,025 |
|
|
|
8,018 |
|
|
|
(6,556 |
) |
|
|
19,636 |
|
Change
in fair value of derivative financial instruments |
|
|
(85 |
) |
|
|
97,395 |
|
|
|
8,070 |
|
|
|
124,139 |
|
Total other expense |
|
|
(25,227 |
) |
|
|
(72,196 |
) |
|
|
(133,729 |
) |
|
|
(117,469 |
) |
Loss before income taxes |
|
|
(3,255,425 |
) |
|
|
(3,268,647 |
) |
|
|
(9,635,722 |
) |
|
|
(12,454,647 |
) |
Provision for income taxes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
|
(3,255,425 |
) |
|
|
(3,268,647 |
) |
|
|
(9,635,722 |
) |
|
|
(12,454,647 |
) |
Net loss available to common stockholders |
|
$ |
(3,255,425 |
) |
|
$ |
(3,268,647 |
) |
|
$ |
(9,635,722 |
) |
|
$ |
(12,454,647 |
) |
Net loss
per common share - basic and diluted |
|
$ |
(0.53 |
) |
|
$ |
(1.74 |
) |
|
$ |
(1.80 |
) |
|
$ |
(9.17 |
) |
Weighted
average shares outstanding - basic and diluted |
|
|
6,103,746 |
|
|
|
1,883,137 |
|
|
|
5,339,936 |
|
|
|
1,358,260 |
|
Net
loss |
|
$ |
(3,255,425 |
) |
|
$ |
(3,268,647 |
) |
|
$ |
(9,635,722 |
) |
|
$ |
(12,454,647 |
) |
Other
comprehensive gain (loss) - foreign currency translation |
|
|
1,528 |
|
|
|
(6,234 |
) |
|
|
7,062 |
|
|
|
(13,825 |
) |
Comprehensive loss |
|
$ |
(3,253,897 |
) |
|
$ |
(3,274,881 |
) |
|
$ |
(9,628,660 |
) |
|
$ |
(12,468,472 |
) |
|
|
|
|
|
|
|
|
|
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