Accelerate Diagnostics reports Q4 and full-year 2023 financial results

Accelerate Diagnostics, Inc. announced financial results for the fourth quarter and year ended December 31, 2023.

“In 2023, we made significant progress with the development of our next-generation rapid Antibiotic Susceptibility Testing system, Accelerate Wave™. We continue to advance this important development program and believe that we remain on plan to begin our clinical trials in the second quarter of 2024,” commented Jack Phillips, President and CEO of Accelerate Diagnostics, Inc. “In addition, we continue to expand and secure our Accelerate Pheno® customer base, with an upgrade path to Wave adoption. Based on consistent customer feedback, Accelerate Wave is anticipated to set the new standard for rapid, same-shift, susceptibility testing,” Mr. Phillips continued.

2023 fourth quarter results

• Notable Wave program achievements during the quarter included:
  • Completed Wave system integration.
  • Significantly advanced antibiotic susceptibility testing (AST) performance of gram-negative positive blood culture menu for approximately 200 bug-drug combinations and running approximately 5,000 unique strains of gram-negative organisms with average time-to-results below 4.5 hours.
• Completed extensive reviews with U.S. and EMEA customers to validate Wave’s product specifications and menu roll-out strategy. Approximately 90% of customers have expressed interest in adopting Accelerate Wave for both rapid positive blood culture and isolated colony testing given unique perceived benefits compared to existing and emerging automated susceptibility platforms.
• In the United States, added six new contracted Pheno instruments during the quarter, ending the quarter with 340 clinically live Pheno revenue-generating instruments and another 71 contracted Pheno instruments in the process of being implemented.
• Executed a collaboration and quality agreement with Bruker Corporation for the Accelerate Arc™ system, made significant progress towards completing U.S. clinical trials and anticipate submission to the U.S. Food and Drug Administration (FDA) during the first quarter of 2024.
• Net sales for the quarter were $3.0 million, compared to $3.0 million for the same quarter of the prior year. Sales for the quarter included a decrease in instrument sales of 11% over the same quarter of the prior year driven by the timing and number of contracts in the funnel, while revenues from consumable products increased by 9% compared to the same period in the prior year.
• Gross margin was approximately 21% for the quarter, compared to approximately 28% for the same quarter of the prior year. The decline in gross margins resulted from inflation in manufacturing related costs and other factors.
• Selling, general, and administrative (SG&A) costs for the quarter were $5.8 million, compared to $8.8 million for the same quarter of the prior year. The decline in SG&A costs is a result of lower employee-related expenses. SG&A costs include non-cash stock-based compensation of $1.0 million and $2.0 million, respectively, for the same periods. 
• Research and development (R&D) costs for the quarter were $5.6 million, compared to $6.0 million for the same quarter of the prior year. The decline in R&D costs is a result of lower employee-related expenses as well as lower third-party development costs for our next generation susceptibility instrument Accelerate Wave. R&D costs include non-cash stock-based compensation of $0.3 million and $0.4 million, respectively, for the same periods.
• Net loss was $13.0 million for the quarter, resulting in $0.89 net loss per share.
• Cash used in the fourth quarter was $7.9 million. This reflects a continued reduction in operating cash use over the prior quarters of 2023, following cost cutting measures implemented throughout the year.

2023 full year results

• Secured approximately 65% of current U.S. Pheno customers to multi-year contracts for rapid susceptibility testing, reflecting customers’ commitment to Accelerate rapid AST technology and interest in Wave.
• Net Sales were $12.1 million for the year, compared to $12.8 million in the prior year. While year-over-year revenues for consumable products increased by approximately 5%, overall annual revenue was down year-over-year due to a challenging capital sales environment in all our sales regions.
• Gross margin was approximately 21% for the year, compared to approximately 26% for the prior year. The overall decline in gross margin primarily resulted from a $1.2 million inventory write-down of excess inventory during the third quarter of 2023. Gross margin for the year, excluding inventory write-down and non-cash equity-based compensation was approximately 33%.
• Selling, general, and administrative (SG&A) costs were $31.2 million for the year, compared to $39.2 million for the prior year.  The decline in SG&A costs is a result of lower employee-related expenses during the year. SG&A costs include non-cash stock-based compensation of $3.7 million and $8.5 million, respectively, for the same periods.
• Research and development (R&D) costs were $25.4 million for the year, compared to $26.9 million for the prior year. The decline in R&D costs is a result of lower employee-related expenses as well as lower third-party development for our next-generation rapid AST system, Accelerate Wave. R&D costs include non-cash stock-based compensation of $1.4 million and $1.4 million, respectively, for the same periods.
• GAAP net loss was $61.6 million for the year, resulting in $4.94 net loss per share.
• Cash used for the year was $46.3 million, which includes approximately $8 million of debt restructuring related expenses.
• Ended the year with total cash, investments, and cash equivalents of $13.2 million.

MB Bureau