Chembio Diagnostics, Inc., a point-of-care diagnostics company focused on detecting and diagnosing infectious diseases, this week reported financial results for the third quarter ended September 30, 2018.
The company’s patented DPP® technology platform, which uses a small drop of blood from the fingertip, provides high-quality, cost-effective results in 15-20 minutes.
Chembio achieved total revenue of $9.4 million, including net product sales of $7.9 million, for the third quarter 2018, representing increases of 24% and 28%, respectively, compared to the prior year period.
The company also completed an underwritten public offering bringing an estimated $16.6 million of net proceeds to the company. Chembio intends to use these proceeds to fund its acquisition of opTricon GmbH (announced on October 22nd), a privately-held developer and manufacturer of hand-held analyzers for rapid diagnostic tests.
Proceeds will additionally be used to broaden U.S. manufacturing automation and expand and improve facilities.
Other notable accomplishments this past quarter include a CE mark application filing for a point-of-care DPP® test to detect an undisclosed biomarker through the AstraZeneca funded collaboration and development program; and receipt of $10.5 million purchase commitment for 2019 from Bio-Manguinhos for the production of DPP® HIV and DPP® Leishmania assays in Brazil and their subsequent supply to Brazil’s Ministry of Health.
Third Quarter 2018 Financial Results
Total revenue for the third quarter of 2018 was $9.4 million, an increase of 24% compared to the third quarter of 2017. Net product sales for the third quarter of 2018 were $7.9 million, an increase of 28% compared to the third quarter of 2017. License and royalty and R&D, milestone and grant revenue for the third quarter of 2018 was $1.5 million, an increase of 5% compared to the third quarter of 2017.
Gross product margin for the third quarter of 2018 was $1.1 million, a decrease of 48% compared to the third quarter of 2017. Gross product margin percent for the third quarter of 2018 was 14% compared to 34% for the third quarter of 2017. The lower gross product margin percent for the 2018 third quarter resulted primarily from sales growth in markets with lower average selling prices and costs associated with the current manual product assembly process.
Research and development expenses increased $0.1 million, or 5% for the three months ended September 30, 2018 compared to the three months ended September 30, 2017. Selling, general and administrative expenses increased by $0.7 million, or 32% for the three months ended September 30, 2018 compared to the three months ended September 30, 2017. The increase is primarily associated with merger & acquisition expenses and increased headcount and related costs.
Net loss for the third quarter of 2018 was $2.3 million, or $0.16 per diluted share, compared with a net loss of $0.6 million, or $0.05 per diluted share, for the third quarter of 2017.
Cash and cash equivalents as of September 30, 2018 totaled $6.8 million.
Upcoming Investor Conference Participation
Chembio’s Chief Executive Officer, John Sperzel, will be participating in one-on-one meetings at the Craig-Hallum Alpha Select Conference on Thursday, November 15, 2018.
Chembio’s Chief Financial Officer, Neil Goldman, is scheduled to present at the Canaccord Genuity Medical Technologies & Diagnostics Forum on Thursday, November 15, 2018, at 11:30 am Eastern Time. Interested parties may access a live or recorded webcast of the presentation on the “Investor Relations” section of the company’s website at www.chembio.com. Mr. Goldman will also be participating in one-on-one meetings at the conference.
Source: Chembio Diagnostics press releases, edited.
