Rapid Micro Biosystems, Inc. (Nasdaq: RPID) (the “Company”), an
innovative life sciences technology company providing mission
critical automation solutions to facilitate the efficient
manufacturing and fast, safe release of healthcare products, today
announced its financial results for the third quarter ended
September 30, 2022.
Recent Highlights
- Third quarter
commercial revenue (combined product and service revenue) of $4.7
million
- Third quarter recurring revenue of
$2.9 million
- Placed three new systems and
completed validation of four new customer systems in the third
quarter
- Announced RMBNucleus™ Mold Alarm
for the Growth Direct® system
- Cash, cash equivalents and
investments of $150.1 million at September 30, 2022
“We placed three systems in the third quarter,
which was ahead of our expectations," said Robert Spignesi,
President and CEO. "We also announced our innovative RMBNucleus
Mold Alarm software product at the recent PDA Conference, which
generated significant customer interest and excitement. Mold Alarm
provides even more differentiation and value that we can deliver to
customers with the Growth Direct platform. We are improving our
commercial execution as we continue to expand in-person customer
interactions and are confident that we are on the right path to
drive future sales growth.”
Third Quarter Financial
Results
Total (commercial) revenue for the third quarter
of 2022 was $4.7 million, compared to commercial revenue of
$6.3 million in the third quarter of 2021. The decrease was
largely attributable to placing three Growth Direct systems in the
quarter compared to 10 system placements in the prior-year period.
This was partially offset by higher recurring consumables and
service contract revenue, which increased 34% to $2.9 million,
compared to $2.2 million in the third quarter last year. The
Company completed validation of four new customer systems in the
third quarter of 2022 compared to five in the prior-year
period.
In the third quarter of 2022, the Company did
not recognize any revenue from its contract with the U.S.
Biomedical Advanced Research and Development Authority (“BARDA”),
which was completed in the fourth quarter 2021. In the third
quarter of 2021, the Company recognized $0.6 million of
non-commercial revenue related to its BARDA contract.
Total cost of commercial revenue was
$7.5 million in the third quarter of 2022, compared to
$7.8 million in the third quarter of 2021, representing a
decrease of 4%. The decrease was due to lower sales volume in
systems and increased manufacturing efficiencies in consumables,
partially offset by higher sales volume and one-time charges in
consumables, lower overhead volume leverage in systems, and higher
service costs associated with higher headcount, travel and
materials to support increasing field service activity.
Total operating expenses were $14.1 million
in the third quarter of 2022, compared to $10.8 million in the
third quarter of 2021. The increase was mainly due to expenses
related to the unsolicited offer in late June from Kennedy Lewis
Investment Management to acquire all of the outstanding shares of
the Company and the strategic review process announced in August.
In addition, the Company recorded a charge of approximately $1.1
million in the third quarter of 2022 primarily related to
severance, employee benefits and outplacement related costs under
the restructuring plan also announced in August. The Company
expects this plan to result in approximately $8.0 - $9.0 million in
annualized cost savings by the first quarter of 2023.
Net loss for the third quarter of 2022 was $16.3
million, compared to $25.0 million in the third quarter of 2021.
The decline was largely due to one-time charges incurred in the
prior-year period related to an adjustment in the fair value of the
Company's outstanding preferred stock warrants following the
initial public offering and the repayment of the Company's term
loan in September 2021, as well as higher net interest income in
the current-year period, partially offset by higher operating
expenses in the current-year period. Net loss per share
attributable to common shareholders for the third quarter of 2022
was $0.38, compared to $0.71 in the third quarter of 2021.
Cash, cash equivalents and investments were
$150.1 million, and the Company had no debt outstanding, as of
September 30, 2022.
Full Year 2022 Outlook
The Company is reaffirming its prior full year
2022 revenue outlook of at least $17.0 million, which assumes the
placement of at least two systems in the fourth quarter of the
year.
Ongoing Review of Strategic
Alternatives
As previously announced on August 12, 2022, the
Company's Board of Directors is conducting a review of strategic
alternatives to determine the best path to maximize shareholder
value. The Board is progressing through its review, and the Company
does not intend to provide further updates on the Board’s process
unless and until it determines that further disclosure is
appropriate or necessary. There can be no assurance that the
strategic alternative process will result in the Company pursuing a
particular transaction or any other strategic outcome.
Webcast Details
The Company will host a conference call before
the market opens today, November 10, 2022, at 8:30 a.m. EST to
discuss its third quarter 2022 financial results. The live call is
accessible on the Company’s website at investors.rapidmicrobio.com
and will be archived and available for replay for one year.
About Rapid Micro
Biosystems
Rapid Micro Biosystems is an innovative life
sciences technology company providing mission critical automation
solutions to facilitate the efficient manufacturing and fast, safe
release of healthcare products such as biologics, vaccines, cell
and gene therapies, and sterile injectables. The Company’s flagship
Growth Direct system automates and modernizes the antiquated,
manual microbial quality control (“MQC”) testing workflows used in
the largest and most complex pharmaceutical manufacturing
operations across the globe. The Growth Direct system brings the
quality control lab to the manufacturing floor, unlocking the power
of in-line/at-the-line MQC automation to deliver faster results,
greater accuracy, increased operational efficiency, better
compliance with data integrity regulations, and quicker decision
making, that customers rely on to ensure safe and consistent supply
of important healthcare products. The Company is headquartered and
has U.S. manufacturing in Lowell, Massachusetts, with global
locations in Lexington, Massachusetts, Switzerland, Germany, and
the Netherlands. For more information, please visit
www.rapidmicrobio.com or follow the Company on Twitter at
@rapidmicrobio or on LinkedIn.
Forward-Looking Statements
This press release includes forward-looking
statements 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. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including, but not limited
to, statements regarding the Company’s full year 2022 revenue
outlook range and expected future revenue and growth; expected
placements of Growth Direct systems, anticipated timing of such
placements and the impact on the Company’s commercial revenue; its
expectations regarding customers capital purchasing decisions and
the Company’s sales opportunities; expectations for the RMBNucleus
Mold Alarm; the projected cost savings resulting from the Company’s
organizational restructuring action; expectations regarding the
Company’s improvements in commercial execution and enhanced sales
and marketing processes; its Board of Directors’ review of
strategic alternatives; and customer interest in and adoption of
the Company's Growth Direct microbial quality control platform.
In some cases, you can identify forward-looking
statements by terminology such as “outlook,” “aim,” “anticipate,”
“assume,” “believe,” “contemplate,” “continue,” “could,” “due,”
“estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,”
“predict,” “potential,” “positioned,” “seek,” “should,” “target,”
“will,” “would” and other similar expressions that are predictions
of or indicate future events and future trends, or the negative of
these terms or other comparable terminology, although not all
forward-looking statements contain these words. Forward-looking
statements involve known and unknown risks, uncertainties and
assumptions which may cause actual results to differ materially
from any results expressed or implied by any forward-looking
statement, including, but not limited to, the impact of
macroeconomic volatility and COVID-19 and its variants on the
Company’s business and operations, including further delays in
placements and validation of new systems; the Company’s
organizational restructuring plan, including a reduction in
workforce, may not result in the anticipated savings, could result
in total costs and expenses that are greater than expected and
could disrupt the Company’s business; the Company’s significant
losses since inception; the Company’s ability to meet its publicly
announced guidance and other expectations about its business and
operating results; the Company’s limited experience in marketing
and sales and the effectiveness of its sales processes; the
Company’s need to develop new products and adapt to technological
changes; the Company’s ability to establish and maintain its
position as a leading provider of automated microbial quality
control testing; the Company’s ability to maintain its
manufacturing facility; risks related to third-parties; its ability
to retain key management and other employees; risks related to
regulatory and intellectual property matters; risks related to
supply chain disruptions and the impact of inflation; risks
relation to the exploration of strategic alternatives; and the
other important factors outlined under the caption “Risk Factors”
in the Company’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission (“SEC”) on March 24, 2022, as
such factors may be updated from time to time in its other filings
with the SEC, which are available on the SEC's website at
www.sec.gov and the Investor Relations page of its website at
investors.rapidmicrobio.com. Although the Company believes that the
expectations reflected in its forward-looking statements are
reasonable, it cannot guarantee future results. The Company has no
obligation, and does not undertake any obligation, to update or
revise any forward-looking statement made in this press release to
reflect changes since the date of this press release, except as may
be required by law.
RAPID MICRO BIOSYSTEMS,
INC.Unaudited Condensed Consolidated Statements of
Operations(in thousands, except share and per
share amounts)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
|
|
|
|
Product revenue |
$ |
3,209 |
|
|
$ |
4,824 |
|
|
$ |
8,212 |
|
|
$ |
12,630 |
|
Service revenue |
|
1,530 |
|
|
|
1,479 |
|
|
|
4,547 |
|
|
|
4,152 |
|
Non-commercial revenue |
|
— |
|
|
|
596 |
|
|
|
— |
|
|
|
1,242 |
|
Total revenue |
|
4,739 |
|
|
|
6,899 |
|
|
|
12,759 |
|
|
|
18,024 |
|
Costs and operating expenses: |
|
|
|
|
|
|
|
Cost of product revenue |
|
5,627 |
|
|
|
6,298 |
|
|
|
13,220 |
|
|
|
17,900 |
|
Cost of service revenue |
|
1,906 |
|
|
|
1,516 |
|
|
|
5,478 |
|
|
|
3,997 |
|
Cost of non-commercial revenue |
|
— |
|
|
|
396 |
|
|
|
— |
|
|
|
1,282 |
|
Research and development |
|
2,973 |
|
|
|
2,441 |
|
|
|
9,463 |
|
|
|
6,926 |
|
Sales and marketing |
|
3,930 |
|
|
|
3,063 |
|
|
|
10,870 |
|
|
|
8,460 |
|
General and administrative |
|
7,189 |
|
|
|
5,308 |
|
|
|
19,687 |
|
|
|
12,135 |
|
Total costs and operating expenses |
|
21,625 |
|
|
|
19,022 |
|
|
|
58,718 |
|
|
|
50,700 |
|
Loss from operations |
|
(16,886 |
) |
|
|
(12,123 |
) |
|
|
(45,959 |
) |
|
|
(32,676 |
) |
Other income (expense): |
|
|
|
|
|
|
|
Interest income (expense), net |
|
575 |
|
|
|
(761 |
) |
|
|
947 |
|
|
|
(2,603 |
) |
Change in fair value of preferred stock warrant liability |
|
— |
|
|
|
(8,160 |
) |
|
|
— |
|
|
|
(19,643 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
(3,100 |
) |
|
|
— |
|
|
|
(3,100 |
) |
Other income (expense), net |
|
(21 |
) |
|
|
(823 |
) |
|
|
70 |
|
|
|
(840 |
) |
Total other income (expense), net |
|
554 |
|
|
|
(12,844 |
) |
|
|
1,017 |
|
|
|
(26,186 |
) |
Loss before income taxes |
|
(16,332 |
) |
|
|
(24,967 |
) |
|
|
(44,942 |
) |
|
|
(58,862 |
) |
Income tax expense (benefit) |
|
7 |
|
|
|
20 |
|
|
|
(583 |
) |
|
|
57 |
|
Net loss |
|
(16,339 |
) |
|
|
(24,987 |
) |
|
|
(44,359 |
) |
|
|
(58,919 |
) |
Accretion of redeemable convertible preferred stock to redemption
value |
|
— |
|
|
|
210 |
|
|
|
— |
|
|
|
(1,761 |
) |
Cumulative redeemable convertible preferred stock dividends |
|
— |
|
|
|
(451 |
) |
|
|
— |
|
|
|
(2,747 |
) |
Net loss attributable to common stockholders — basic and
diluted |
$ |
(16,339 |
) |
|
$ |
(25,228 |
) |
|
$ |
(44,359 |
) |
|
$ |
(63,427 |
) |
Net loss per share attributable to Class A and Class B common
stockholders — basic and diluted |
$ |
(0.38 |
) |
|
$ |
(0.71 |
) |
|
$ |
(1.05 |
) |
|
$ |
(5.14 |
) |
Weighted average common shares outstanding — basic and diluted |
|
42,517,992 |
|
|
|
35,316,099 |
|
|
|
42,404,243 |
|
|
|
12,344,619 |
|
RAPID MICRO BIOSYSTEMS,
INC.Unaudited Condensed Consolidated Balance
Sheets(in thousands)
|
September 30,2022 |
|
December 31,2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
25,832 |
|
|
$ |
178,387 |
|
Short-term investments |
|
89,062 |
|
|
|
15,110 |
|
Accounts receivable |
|
4,658 |
|
|
|
5,005 |
|
Inventory |
|
20,924 |
|
|
|
15,671 |
|
Prepaid expenses and other current assets |
|
4,101 |
|
|
|
3,951 |
|
Total current assets |
|
144,577 |
|
|
|
218,124 |
|
Property and equipment, net |
|
13,230 |
|
|
|
11,304 |
|
Right-of-use assets, net |
|
7,298 |
|
|
|
— |
|
Long-term investments |
|
35,214 |
|
|
|
9,966 |
|
Other long-term assets |
|
1,313 |
|
|
|
1,491 |
|
Restricted cash |
|
284 |
|
|
|
284 |
|
Total assets |
$ |
201,916 |
|
|
$ |
241,169 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
3,670 |
|
|
$ |
3,944 |
|
Accrued expenses and other current liabilities |
|
7,391 |
|
|
|
10,917 |
|
Deferred revenue |
|
3,404 |
|
|
|
3,305 |
|
Lease liabilities, short-term |
|
747 |
|
|
|
— |
|
Total current liabilities |
|
15,212 |
|
|
|
18,166 |
|
Deferred rent, long term |
|
— |
|
|
|
813 |
|
Lease liabilities, long-term |
|
7,467 |
|
|
|
— |
|
Other long-term liabilities |
|
221 |
|
|
|
1,210 |
|
Total liabilities |
|
22,900 |
|
|
|
20,189 |
|
Total stockholders’ equity |
|
179,016 |
|
|
|
220,980 |
|
Total liabilities and stockholders’ equity |
$ |
201,916 |
|
|
$ |
241,169 |
|
RAPID MICRO BIOSYSTEMS,
INC.Unaudited Condensed Consolidated Statements of
Cash Flows(in thousands)
|
Nine Months Ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating activities: |
|
|
|
Net loss |
$ |
(44,359 |
) |
|
$ |
(58,919 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization expense |
|
1,977 |
|
|
|
1,079 |
|
Stock-based compensation expense |
|
2,914 |
|
|
|
1,165 |
|
Change in fair value of preferred stock warrant liability |
|
— |
|
|
|
19,643 |
|
Provision recorded for inventory |
|
219 |
|
|
|
44 |
|
Noncash lease expense |
|
846 |
|
|
|
— |
|
Noncash interest expense |
|
— |
|
|
|
390 |
|
Loss (gain) on disposal of property and equipment |
|
19 |
|
|
|
(18 |
) |
Accretion on investments |
|
(237 |
) |
|
|
(4 |
) |
Loss on extinguishment of debt |
|
— |
|
|
|
3,100 |
|
Other |
|
(116 |
) |
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
346 |
|
|
|
(18 |
) |
Inventory |
|
(5,472 |
) |
|
|
(5,247 |
) |
Prepaid expenses and other current assets |
|
(152 |
) |
|
|
(2,552 |
) |
Other long-term assets |
|
69 |
|
|
|
(653 |
) |
Accounts payable |
|
(275 |
) |
|
|
(2,216 |
) |
Accrued expenses and other current liabilities |
|
(2,770 |
) |
|
|
2,646 |
|
Deferred revenue |
|
99 |
|
|
|
(520 |
) |
Other long-term liabilities |
|
— |
|
|
|
3 |
|
Net cash used in operating activities |
|
(46,892 |
) |
|
|
(42,077 |
) |
Cash flows from investing activities: |
|
|
|
Purchases of property and equipment |
|
(5,929 |
) |
|
|
(1,251 |
) |
Proceeds from sale of property and equipment |
|
— |
|
|
|
20 |
|
Purchases of investments |
|
(155,340 |
) |
|
|
— |
|
Maturity of investments |
|
55,000 |
|
|
|
15,000 |
|
Net cash (used) provided by investing activities |
|
(106,269 |
) |
|
|
13,769 |
|
Cash flows from financing activities: |
|
|
|
Proceeds from issuance of redeemable convertible preferred stock,
net of issuance costs |
|
— |
|
|
|
79,743 |
|
Proceeds from issuance of Class A common stock - stock option
exercise |
|
471 |
|
|
|
294 |
|
Proceeds from issuance of Class A common stock - employee stock
purchase plan |
|
159 |
|
|
|
— |
|
Proceeds from issuance of restricted Class A stock award |
|
— |
|
|
|
523 |
|
Payments on finance lease obligations |
|
(24 |
) |
|
|
— |
|
Proceeds from initial public offering of Class A common stock, net
of issuance costs |
|
— |
|
|
|
165,453 |
|
Proceeds from exercise of common stock warrants |
|
— |
|
|
|
13 |
|
Repayment of term loans |
|
— |
|
|
|
(26,159 |
) |
Payment of debt extinguishment fees |
|
— |
|
|
|
(1,866 |
) |
Net cash provided by financing activities |
|
606 |
|
|
|
218,001 |
|
Net (decrease) increase in cash, cash equivalents and
restricted cash |
|
(152,555 |
) |
|
|
189,693 |
|
Cash, cash equivalents and restricted cash at beginning of
period |
|
178,671 |
|
|
|
30,179 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
26,116 |
|
|
$ |
219,872 |
|
Investor Contact:
Michael Beaulieu, CFA
Vice President, Investor Relations and Corporate Communications
investors@rapidmicrobio.com
Media
media@rapidmicrobio.com
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