Form 8-K NanoString Technologies For: May 05

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May 5, 2016 4:11 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
_______________________________ 
FORM 8-K
__________________________
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 2016
 
_______________________________ 
NanoString Technologies, Inc.
(Exact name of registrant as specified in its charter)
 
 ________________________________

Delaware
001-35980
20-0094687
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)

530 Fairview Avenue North
Seattle, Washington 98109
(Address of principal executive offices, including zip code)

(206) 378-6266
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)
 
 _________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 




Item 2.02 Results of Operations and Financial Condition.
On May 5, 2016, NanoString Technologies, Inc. (“NanoString” or the “Company”) issued a press release reporting its financial results for the first quarter of 2016. A copy of the press release is furnished herewith as Exhibit 99.1 .

Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
 
Exhibit No.
  
Description
99.1
  
Press release dated May 5, 2016.

The information furnished in this Current Report under Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
NanoString Technologies, Inc.
 
 
 
 
Date:
May 5, 2016
By:  
/s/ R. Bradley Gray
 
 
 
R. Bradley Gray
 
 
 
President and Chief Executive Officer





EXHIBIT INDEX
 
Exhibit No.
  
Description
99.1
  
Press release dated May 5, 2016.





Exhibit 99.1
FOR IMMEDIATE RELEASE
NanoString Technologies Releases Operating Results for First Quarter of 2016
Revenue Growth Driven by Strong Consumable Pull-Through and Diagnostic Collaborations

SEATTLE - May 5, 2016 - NanoString Technologies, Inc. (NASDAQ: NSTG), a provider of life science tools for translational research and molecular diagnostic products, today reported financial results for the first quarter ended March 31, 2016.

First Quarter Financial Highlights
•
Total revenue of $14.7 million, 27% year-over-year growth
•
Total product and service revenue of $12.1 million, 12% year-over-year growth
•
Consumables revenue of $8.0 million, including $0.8 million of Prosigna® IVD kits, 35% year-over-year growth
•
Instrument revenue of $3.4 million, 22% year-over-year decline
•
Collaboration revenue of $2.6 million

“We continue to strengthen our leadership in precision oncology on all fronts, while our new biopharma partnerships helped deliver positive operating cash flow during the first quarter,” said president and chief executive officer, Brad Gray. “We generated 27% year-on-year revenue growth despite lower than expected instrument sales, as some orders slipped into the second quarter. We have seen a strong recovery in instrument sales during April, expect instrument revenue growth to normalize over the balance of the year, and reiterate our guidance for total revenue of $86 to $90 million for fiscal year 2016.”

Recent Business Highlights
•
Grew installed base to over 370 nCounter® Analysis Systems at March 31, 2016
•
Introduced the nCounter Vantage™ portfolio of assays that power 3D Biology experiments in cancer research, including immuno-oncology
•
Presented first proof-of-concept data for digital immunohistochemistry (IHC), a novel technology to simultaneously count multiple protein targets in the spatial context of tumor tissue biopsies
•
Entered into a collaboration with HalioDx SAS to develop gene expression assays for assessing response to cancer immunotherapies using the nCounter system
•
Received favorable final Medicare local coverage determination for Prosigna® by Noridian Healthcare Solutions and Novitas Solutions, Inc. covering 22 states
•
Entered into two collaborations with Merck and with Medivation and Astellas to develop and commercialize novel diagnostic tests to predict drug response

First Quarter Financial Results
Revenue for the three months ended March 31, 2016 increased by 27% to $14.7 million, as compared to $11.6 million for the first quarter of 2015. Instrument revenue was $3.4 million, down 22% versus the prior year period, resulting from seasonal trends compounded by slower than expected conversion of sales opportunities into orders, as well as a lower overall average selling price resulting from the mid-2015 launch of the nCounter SPRINT™ Profiler. Consumables revenue, excluding Prosigna, was $7.2 million for the first quarter of 2016, 31% higher than in the comparable 2015 quarter. Prosigna IVD kit revenue was $0.8 million for the quarter, and collaboration revenue totaled $2.6 million. Gross margin on product and service revenue was 52% for the first quarter of 2016, up from 51% for the first quarter of 2015.

Research and development expense increased by 22% to $7.2 million for the first quarter of 2016 versus $5.9 million for the first quarter of 2015, reflecting increased costs associated with collaboration activities and new products and technologies under development for the life science research market. Selling, general and administrative expense was $14.9 million for the first quarter of 2016 compared to $14.1 million for the prior year period.






Net loss for the three months ended March 31, 2016 declined to $14.6 million, or a loss of $0.74 per diluted share, compared with $14.9 million, or a loss of $0.81 per diluted share, for the first quarter of 2015.

Outlook for 2016
The company's financial outlook for 2016 is unchanged, and includes:
•
Total revenue in the range of $86 million to $90 million
•
Gross margin on product and service revenues in the range of 54% to 55%
•
Operating expenses in the range of $94 million to $99 million
•
Operating loss in the range of $40 million to $43 million
•
Net loss per share in the range of $2.30 to $2.45
•
Cash from collaborations in 2016 in the range of $40 million to $45 million

Conference Call
Management will host a conference call today beginning at 1:30 pm PT / 4:30 pm ET to discuss quarterly operating results and answer questions. Individuals interested in listening to the conference call may do so by dialing (888) 793-9492 for domestic callers, or (734) 385-2643 for international callers, or from the webcast link in the investor relations section of the company’s website at: www.nanostring.com. A replay of the call will be available beginning May 5, 2016 at 7:30pm ET through midnight on May 6, 2016. To access the replay, dial (855) 859-2056 or (404) 537-3406 and reference Conference ID: 87491467. The webcast will also be available on the company’s website for one year following the completion of the call.

About NanoString Technologies, Inc.
NanoString Technologies provides life science tools for translational research and molecular diagnostic products. The company's nCounter Analysis System has been employed in life sciences research since it was first introduced in 2008 and has been cited in more than 1,000 peer-reviewed publications. The nCounter Analysis System offers a cost-effective way to easily profile the expression of hundreds of genes, proteins, miRNAs, or copy number variations, simultaneously with high sensitivity and precision, facilitating a wide variety of basic research and translational medicine applications, including biomarker discovery and validation. The company's technology is also being used in diagnostics. The Prosigna® Breast Cancer Prognostic Gene Signature Assay together with the nCounter Dx Analysis System is FDA 510(k) cleared for use as a prognostic indicator for distant recurrence of breast cancer. In addition, the company is collaborating with multiple biopharmaceutical companies in the development of companion diagnostic tests for various cancer therapies, helping to realize the promise of precision oncology.

For more information, please visit www.nanostring.com.

Forward-Looking Statements
This news release contains 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 the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the expected growth of the company’s business, the capabilities of its current and future products, its ability to develop new cancer diagnostics to aid in the treatment of cancer patients, including ts ability to develop, maintain or expand collaborative relationships, and its estimated 2016 operating results. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include market acceptance of our products; delays or denials of regulatory approvals or clearances for products or applications; delays or denials of reimbursement for diagnostic products; the impact of competition; the impact of expanded sales, marketing, product development and clinical activities on operating expenses; delays or other unforeseen problems with respect to manufacturing, product development or clinical studies; adverse conditions in the general domestic and global economic markets; as well as the other risks set forth in the company's filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. NanoString Technologies disclaims any obligation to update these forward-looking statements.

The NanoString Technologies logo, NanoString, NanoString Technologies, nCounter, nCounter SPRINT, nCounter Vantage, 3D Biology, and Prosigna are registered trademarks or trademarks of NanoString Technologies, Inc. in various jurisdictions.

Contact    
Mark Klausner of Westwicke Partners
(443) 213-0501






NANOSTRING TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 
 
Three Months Ended
March 31,
 
2016
 
2015
Revenue:
 
 
 
Instruments
$
3,402

 
$
4,369

Consumables
7,208

 
5,503

In vitro diagnostic kits
754

 
381

Services
772

 
579

Total product and service revenue
12,136

 
10,832

Collaboration
2,561

 
761

Total revenue
14,697

 
11,593

Costs and expenses:
 
 
 
Cost of product and service revenue
5,870

 
5,340

Research and development
7,208

 
5,916

Selling, general and administrative
14,904

 
14,125

Total costs and expenses (a) (b)
27,982

 
25,381

Loss from operations
(13,285
)
 
(13,788
)
Other income (expense):
 
 
 
Interest income
68

 
67

Interest expense
(1,315
)
 
(984
)
Other expense
(71
)
 
(189
)
Total other income (expense), net
(1,318
)
 
(1,106
)
Net loss before provision for income taxes
(14,603
)
 
(14,894
)
Provision for income taxes
—

 
—

Net loss
$
(14,603
)
 
$
(14,894
)
Net loss per share, basic and diluted
$
(0.74
)
 
$
(0.81
)
Shares used in calculating basic and diluted net loss per share
19,669

 
18,310

 
 
 
 
(a) Includes $1.9 million and $1.3 million of stock-based compensation expense for the three months ended March 31, 2016
      and 2015, respectively.
 
 
 
 
 
 
 
(b) Includes $0.7 million and $0.5 million of depreciation and amortization expense for the three months ended
      March 31, 2016 and 2015, respectively.
 
 
 






NANOSTRING TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
 
 
March 31, 2016
 
December 31, 2015
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
29,587

 
$
21,856

Short-term investments
27,151

 
27,188

Accounts receivable, net
15,528

 
19,725

Inventory
11,836

 
10,138

Prepaid expenses and other
3,130

 
3,886

Total current assets
87,232

 
82,793

Property and equipment, net
10,841

 
9,414

Other assets
659

 
662

Total assets
$
98,732

 
$
92,869

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
3,546

 
$
3,243

Accrued liabilities
7,629

 
12,181

Deferred revenue, current portion
11,749

 
5,261

Lease financing obligations, current portion
190

 
226

Total current liabilities
23,114

 
20,911

Deferred revenue, net of current portion
20,000

 
6,486

Deferred rent and other liabilities, net of current portion
5,725

 
4,257

Long-term debt and lease financing obligations, net of current portion and debt issuance costs
41,285

 
41,000

Total liabilities
90,124

 
72,654

Total stockholders’ equity
8,608

 
20,215

Total liabilities and stockholders’ equity
$
98,732

 
$
92,869





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