Core Viewpoint - Accelerate Diagnostics, Inc. has submitted its Accelerate WAVE™ system and positive blood culture gram-negative test kit to the FDA for 510(k) clearance, aiming to enhance rapid antimicrobial susceptibility testing and improve patient outcomes in serious infections [1][2][3]. Group 1: Product Overview - The Accelerate WAVE system is designed to provide rapid antimicrobial susceptibility testing directly from positive blood culture bottles and bacterial isolate colonies, delivering results in an average of 4.5 hours [2]. - Once approved, the WAVE system will offer microbiology laboratories a comprehensive solution to meet various testing demands and hospital formulary needs, featuring a user-friendly workflow and high throughput capacity [3]. Group 2: Market Context and Impact - Sepsis affects approximately 49 million people globally each year, leading to around 11 million deaths, with 1.32 million deaths attributed to bacterial antimicrobial resistance [4]. - The annual cost burden of sepsis on the U.S. healthcare system is estimated at $62 billion, highlighting the need for rapid AST results to support earlier targeted antimicrobial therapy, thereby improving patient outcomes and reducing hospital costs [4]. Group 3: Company Background - Accelerate Diagnostics, Inc. focuses on in-vitro diagnostics solutions addressing antibiotic resistance and sepsis, with existing FDA-cleared platforms including the Accelerate Pheno system and Accelerate PhenoTest® BC kit [6]. - The Accelerate Pheno system automates sample preparation, identification, and phenotypic antibiotic susceptibility testing in approximately seven hours, offering results 1-2 days faster than existing methods [6].

Preliminary Financial Results Announcement - Accelerate Diagnostics, Inc. announced preliminary results for the quarter and year ending December 31, 2024 on January 10, 2025 [3] - The press release detailing the preliminary results is attached as Exhibit 99.1 and incorporated by reference [3] Regulatory and Filing Information - The information in Item 2.02, including Exhibit 99.1, is not deemed "filed" for purposes of Section 18 of the Exchange Act [4] - The report includes an Interactive Data File (XBRL) as Exhibit 104 [5] Executive Signatory - The report was signed by David Patience, Chief Financial Officer of Accelerate Diagnostics, Inc., on January 10, 2025 [8]

TUCSON, Ariz., March 21, 2025 /PRNewswire/ -- Accelerate Diagnostics, Inc. (Nasdaq: AXDX) today reports financial results for the fourth quarter and year ended December 31, 2024. 2024 Fourth Quarter Results Net sales for the quarter were $2.8 million, compared to $3.0 million for the same quarter of the prior year. The decline in revenues was primarily driven by lower sales of consumable products compared to the same period in the prior year. Gross margin was approximately 16% for the quarter, compared to ...

Financial Viability and Concerns - As of December 31, 2024, the company has substantial doubt about its ability to continue as a going concern due to inadequate financial resources to fund forecasted operating costs for at least twelve months [106]. - The company has incurred significant losses from operations during the years ended December 31, 2024 and 2023, and expects to continue incurring losses in the future [119]. - The company may need to materially modify operations, sell assets, or pursue strategic alternatives if adequate capital resources are not obtained [108]. - The company may seek protection under Chapter 11 of the Bankruptcy Code, which could adversely affect its business and stockholder value [117]. - The company may face cash shortfalls if it cannot reduce expenditures in response to unexpected events or revenue shortfalls [129]. - The company is exploring additional funding options, but there is no assurance that necessary financing will be available on acceptable terms [107]. Product Development and Commercialization - The successful commercialization of the Accelerate Pheno system and Accelerate Arc system is critical for the company's future profitability and existence [120]. - The company anticipates that its future revenues will depend on the successful commercialization of its products, but there is no assurance of achieving sufficient revenues [118]. - The company has not yet obtained FDA marketing authorization for its future product candidates, including the Accelerate WAVE system, which may hinder revenue generation [127]. - Delays in achieving projected development goals could impact product commercialization timelines and negatively affect stock prices [130]. - The company has made significant investments in research and development, particularly in the Accelerate Pheno, Accelerate Arc, and Accelerate WAVE systems, but there is no guarantee these will result in commercially viable products [183]. - The company has commercialized the Accelerate Pheno system in the United States, Europe, and certain other regions, but there is no assurance of successful commercialization or avoidance of operating losses [232]. Regulatory and Compliance Risks - The company is subject to extensive regulation by the FDA and other governing bodies, which could impact product commercialization and operational costs [190]. - Regulatory processes for the company’s products are expensive and time-consuming, with no assurance of obtaining necessary approvals for commercialization [209]. - The company must comply with CLIA regulations, which could restrict the use of its diagnostic products by customers [199]. - The company is subject to regulatory inspections and must comply with FDA requirements to avoid suspension of its manufacturing process [216]. - The company may face recalls or seizures of products due to regulatory violations, which could harm its reputation and financial resources [198]. Financial Reporting and Internal Controls - The company identified a material weakness in internal control over financial reporting, which could affect the accuracy and timing of financial reporting [163]. - The company has a compliance program in place, but risks remain regarding potential misconduct by employees and partners, which could lead to significant penalties and reputational harm [1]. Market and Economic Conditions - The company faces challenges in obtaining additional capital due to current macroeconomic conditions, which may affect customer spending on products [244]. - Market opportunity estimates and growth forecasts are subject to significant uncertainty, which may lead to overestimation of potential market opportunities [148]. - The company is facing unprecedented cost increases from suppliers, primarily due to labor and supply disruptions, which may materially reduce gross profit margins [162]. Legal and Intellectual Property Risks - There is a risk of litigation arising from allegations of intellectual property infringement, which could result in substantial costs and distract management [176]. - The company may face challenges in defending its patents against third-party claims, which could affect its ability to commercialize products [170]. - The lifespan of patents is limited, generally expiring 20 years after filing, which could impact long-term competitive advantages [172]. Stock and Shareholder Considerations - The company received a notice from Nasdaq indicating that its Market Value of Listed Securities was below the minimum requirement of $35 million for continued listing [225]. - The company has until July 28, 2025, to regain compliance with the Nasdaq listing requirements [226]. - If compliance is not regained, the company may face delisting, which could adversely affect its ability to attract new investors and reduce liquidity [227]. - The company increased the total number of authorized shares of common stock by 250 million, totaling 450 million shares, which may cause significant dilution [229]. - A reverse stock split was completed in July 2023, resulting in an increase in the number of authorized and unissued shares [229]. - The company has a significant number of options, warrants, and RSUs outstanding, which could further dilute stockholders if exercised [231]. - The market value of the company's common stock may rise or fall sharply due to volatility and significant short positions taken by investors [240]. Operational Risks - The company relies on third-party manufacturers for key components, which introduces risks related to regulatory compliance and quality assurance [161]. - Manufacturing processes for the company's products are complex, and any unforeseen issues could lead to delays or shortfalls in production, adversely affecting revenue growth [185]. - The company operates a single research and development facility in Tucson, Arizona, and any disruption to this facility could materially harm its ability to conduct research and development activities [184]. - The company relies heavily on key personnel, and failure to retain qualified employees could hinder its ability to achieve strategic goals [139]. Impact of COVID-19 - The company has experienced significant adverse impacts from the COVID-19 pandemic, affecting access to customers and sales capabilities, particularly in hospitals [157].

Company Performance and Operational Highlights - The company announced preliminary, unaudited results for Q4 and full-year 2024, showing progress in its innovation pipeline, including the Accelerate WAVE™ system and Gram-Negative assay clinical trials [1][2] - The WAVE system clinical trial demonstrated consistent performance with pre-clinical data, offering the largest Gram-Negative bug-drug combination for rapid PBC AST with a time-to-result of approximately 4.5 hours [5] - The company maintained approximately 350 clinically live Pheno® revenue-generating instruments in the US, consistent with its commercial strategy [5] - Contract extensions were secured with over 75% of US Pheno customers, ensuring continuity through the anticipated WAVE commercial launch [5] - The company received 510(k) clearance for the Accelerate Arc system and BC kit, an automated positive blood culture sample preparation platform [5] Financial Results - Preliminary revenue for 2024 was approximately $11.7 million, down from $12.1 million in the prior year, primarily due to lower capital sales of Pheno instruments [5] - Consumable product revenue increased by approximately 3% year-over-year [5] - Cash and cash equivalents decreased by $4.5 million in Q4 2024, ending the year with $16.3 million, reflecting continued reductions in operating cash use [5] Product Development and Regulatory Progress - The company is close to finalizing enrollment for the WAVE system clinical trial, with encouraging results and anticipates FDA submission shortly after enrollment completion [2] - The WAVE system is expected to be submitted for FDA approval in Q1 2025, with a commercial launch anticipated in late 2025 [5] - The company contracted a large US reference lab for the Accelerate Arc™ system, highlighting its utility for cost-effective, rapid, and automated microbial identification [5] Industry and Market Context - The company focuses on addressing global challenges of antibiotic resistance and sepsis through its in vitro diagnostics solutions, including the Accelerate Pheno system and Accelerate PhenoTest® BC kit [8] - Recent external studies indicate that the company's solutions offer results 1–2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage earlier [8]

Financial Data and Key Metrics - Net sales for Q3 2024 were approximately $3 million, a decrease from $3.3 million in the same period last year, driven by lower instrument sales [22] - Gross margin improved to 29% in Q3 2024, up from 3% in the prior year, due to product mix and an inventory write-down in the previous period [24] - Selling, general, and administrative (SG&A) expenses decreased to $5.6 million from $7.8 million, primarily due to lower employee-related expenses [25] - Research and development (R&D) expenses declined to $3.8 million from $7 million, driven by reduced third-party development costs for the WAVE program [26] - Net loss for the quarter was $14.6 million, resulting in a loss per share of $0.59 [27] - Cash used in the quarter was $5.5 million, with a target cash burn rate of $5 million per quarter [27][40] Business Line Updates - The WAVE system's clinical trial for Gram-Negative testing is on track, with external site enrollments meeting expectations and strong reliability demonstrated [7] - FDA 510(k) clearance was obtained for the Accelerate Arc system, which automates microbial identification from positive blood cultures, reducing diagnostic turnaround times [9][10] - The company is focusing on converting its existing Pheno customers to WAVE, with ongoing education and long-term contracts in place [32][33] - The Arc system is expected to complement WAVE by automating MALDI-based rapid ID workflows, with high customer receptivity [15][36] Market and Strategic Direction - The company is strengthening its leadership in the rapid positive blood culture AST market and disrupting the isolate susceptibility testing landscape, which is a $1 billion market [11][18] - WAVE is positioned to consolidate lab testing volumes on a single platform, addressing customer demand for unified AST solutions [17] - Future plans include expanding WAVE to new markets and exploring applications of holographic imaging technology in other diagnostic fields [19] Management Commentary on Operating Environment and Outlook - Management is encouraged by the progress in the WAVE clinical trial and the commercial launch of Arc, with growing market interest in WAVE [20] - The company anticipates having sufficient operating cash through year-end 2025, contingent on receiving contractual payments from third-party partnerships [28] - Management emphasized disciplined financial management to maintain market leadership and support future innovation [44] Q&A Session Question: Transition from Pheno to WAVE - The company has a plan in place to transition existing Pheno customers to WAVE, with ongoing education and long-term contracts. The majority of Pheno customers are expected to convert to WAVE post-launch [31][32][33] Question: Commercial Roadmap for Arc - The Arc system has been well-received, with high customer interest. The sales force is trained, and marketing plans are in place, but it is too early to provide financial guidance for 2025 [35][36][37] Question: Cash Usage Outlook - The company is targeting a cash burn rate of $5 million per quarter, with strong working capital gains in Q3 2024. Future cash usage will focus on delivering key milestones while maintaining financial discipline [39][40][41]

Earnings Performance - Accelerate Diagnostics reported a quarterly loss of $0 59 per share, missing the Zacks Consensus Estimate of a loss of $0 47 This represents a 25 53% earnings surprise [1][2] - The company's loss per share improved from $0 92 a year ago, indicating a reduction in losses [1] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Revenue Performance - Accelerate Diagnostics posted revenues of $2 98 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 0 83% [3] - This compares to year-ago revenues of $3 3 million, showing a decline [3] - The company has not been able to beat consensus revenue estimates over the last four quarters [3] Stock Performance - Accelerate Diagnostics shares have lost about 49 2% since the beginning of the year, significantly underperforming the S&P 500's gain of 24 3% [4] - The stock's immediate price movement will depend on management's commentary on the earnings call [4] Earnings Outlook - The current consensus EPS estimate for the coming quarter is -$0 46 on $3 1 million in revenues [8] - For the current fiscal year, the consensus EPS estimate is -$2 14 on $12 million in revenues [8] - The estimate revisions trend for Accelerate Diagnostics is mixed, translating into a Zacks Rank 3 (Hold) [7] Industry Context - Accelerate Diagnostics belongs to the Zacks Medical - Instruments industry, which is currently in the top 25% of the 250 plus Zacks industries [9] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [9] Peer Comparison - KORU Medical Systems Inc (KRMD), another stock in the same industry, is expected to post a quarterly loss of $0 03 per share, unchanged from the year-ago quarter [10] - KORU Medical Systems Inc's revenues are expected to be $7 66 million, up 9 4% from the year-ago quarter [11]

Sales Performance - Net sales for Q3 2024 decreased by $324 thousand (10%) compared to Q3 2023, primarily due to lower sales of Accelerate PhenoTest instruments[236] - Net sales for the nine months ended September 30, 2024, decreased by $150 thousand (2%) compared to the same period in 2023[236] Product Development and Innovation - The Accelerate WAVE system is in clinical trials, aiming to deliver AST results within 4.5 hours, with potential to process both PBC and Isolate samples[231] - The Accelerate WAVE system is expected to have lower production costs compared to the Accelerate PhenoTest BC Kit, potentially improving the company's margin profile[233] - The company continues to invest in R&D, focusing on enhancing existing products and developing the next-generation AST platform, Accelerate WAVE[234] Regulatory Approvals and Collaborations - The company received FDA approval for the Accelerate Arc Products in September 2024 as a 510(k) IVD Class II Device[226] - The company announced a collaboration with Bruker Corporation in November 2023 to validate the use of the Accelerate Arc system with Bruker's MALDI Biotyper system[229] - The Accelerate Arc Products received CE IVDR registration for use in Europe in June 2022[225] - The company entered into a sales and marketing agreement with BD in August 2022 to leverage BD's global sales team and reduce sales and marketing expenses[223] - The Accelerate Pheno system and Accelerate PhenoTest BC Kit received FDA de novo classification in February 2017[221] Financial Performance and Cost Management - Cost of sales decreased by $1.07 million (34%) for the three months and $0.49 million (7%) for the nine months ended September 30, 2024, primarily due to an inventory write-down in the prior year[237] - Gross profit increased by $0.75 million (700%) for the three months and $0.34 million (18%) for the nine months ended September 30, 2024, with gross margins of 29% and 25% respectively[239] - Research and development expenses decreased by $3.16 million (45%) for the three months and $6.87 million (35%) for the nine months ended September 30, 2024, mainly due to reduced third-party costs for the Accelerate WAVE system[240] - Sales, general and administrative expenses decreased by $2.13 million (27%) for the three months and $8.71 million (34%) for the nine months ended September 30, 2024, driven by lower legal and professional fees[243] - Loss from operations decreased by $6.03 million (41%) for the three months and $15.92 million (37%) for the nine months ended September 30, 2024, primarily due to increased gross profit and reduced expenses[245] - Total other income (expense), net decreased by $21.71 million (138%) for the three months and increased by $8.04 million (160%) for the nine months ended September 30, 2024, influenced by a fair-value adjustment of derivative liability[247] Financial Position and Liquidity - The company had a net loss of $40.5 million and negative cash flows from operations of $19.1 million for the nine months ended September 30, 2024, with an accumulated deficit of $709.3 million[249] - The company entered into a Forbearance Agreement and completed Restructuring Transactions in 2023 to address capital structure issues[250] - The company completed a public offering in January 2024, raising net proceeds of $11.0 million, with an additional $2.7 million raised in May 2024 from the Schuler Trust[251] - In August 2024, the company issued $15.0 million in 16.00% Super-Priority Senior Secured PIK Notes due 2025[252] - As of September 30, 2024, the company had $20.9 million in cash and cash equivalents, an increase of $7.7 million from December 31, 2023, driven by proceeds from unit sales and debt issuance[253] - The company's primary use of capital is for the development and commercialization of the Accelerate Pheno® system and the next-generation Accelerate WAVE™ system[254] - The company's contractual cash obligations as of September 30, 2024, total $119.1 million, including $69.2 million in 5.00% Notes due 2026 and $15.0 million in 16.00% Notes due 2025[263] - Net cash used in operating activities for the nine months ended September 30, 2024, was $19.1 million, a decrease from $32.4 million in the same period in 2023[268] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $27.6 million, primarily from unit sales and debt issuance[272] - The company issued $66.9 million in 5.00% Convertible Senior Notes in June 2023, maturing in December 2026, with interest payable in kind[274] - The company has substantial doubt about its ability to continue as a going concern due to insufficient financial resources to fund operations for the next twelve months[259][260] - The company is exploring strategic alternatives, including potential equity or debt financing, to address its funding needs[257] Debt and Equity Transactions - The company issued $171.5 million aggregate principal amount of 2.50% Notes in March and April 2018, with $65.0 million exchanged for 1.7 million shares of common stock in 2021 and 2022[278] - In August 2022, the company exchanged $49.9 million of 2.50% Notes for a $34.9 million Secured Note and a warrant to acquire 0.2 million shares at $21.20 per share[279] - Approximately $55.9 million of 2.50% Notes were exchanged for $56.9 million of 5.00% Notes, with an additional $0.8 million paid to settle the remaining balance[280] - As of September 30, 2024, $69.2 million aggregate principal amount of 5.00% Notes were outstanding[281] - The company completed the January 2024 Public Units Offering, raising $10.2 million from 6.8 million units at $1.50 per unit[285] - The company sold 1.2 million units to the Schuler Trust at $1.73 per unit, raising $2.0 million in a private placement offering[288] - The company issued $15.0 million aggregate principal amount of 16.00% Notes on August 8, 2024, with interest payable quarterly at 16.00% per annum[292] - The 16.00% Notes are secured by a super-priority security interest in the same collateral as the 5.00% Notes and contain an Exit Premium of 30.00% if repaid before June 30, 2025[294][298] - Aggregate net proceeds from the January 2024 Public Units Offering and private placement offering were approximately $13.7 million for the nine months ended September 30, 2024[291] - Aggregate net proceeds from the issuance of the 16.00% Notes were approximately $14.2 million for the nine months ended September 30, 2024[299]

Revenue and Sales Performance - Net sales for Q3 2024 were $3.0 million, a decrease from $3.3 million in the same quarter of the prior year, driven by lower instrument sales but partially offset by a 9% increase in consumable products[5] - Year-to-date net sales for 2024 were $8.9 million, slightly down from $9.0 million in the same period of the prior year, with a gross margin improvement to 25% from 21%[10] - Net sales for the nine months ended September 30, 2024, were $8.9 million, a slight decrease from $9.0 million in the same period in 2023[29] Gross Margin and Profitability - Gross margin for Q3 2024 improved to 29%, up from 3% in the same quarter of the prior year, reflecting a better product sales mix and an inventory write-down in the prior year[6] - Gross profit for the nine months ended September 30, 2024, was $2.3 million, up from $1.9 million in the same period in 2023, a growth of 17.6%[29] Operating Expenses - SG&A costs for Q3 2024 decreased to $5.6 million from $7.8 million in the same quarter of the prior year, primarily due to lower employee-related expenses[7] - Year-to-date SG&A costs for 2024 were $16.7 million, down from $25.4 million in the same period of the prior year, primarily due to lower employee-related expenses[11] - R&D costs for Q3 2024 were $3.8 million, down from $7.0 million in the same quarter of the prior year, mainly due to lower third-party development costs for the WAVE system[8] - Year-to-date R&D costs for 2024 were $12.9 million, down from $19.8 million in the same period of the prior year, due to lower employee-related and third-party development costs[12] - Research and development expenses decreased to $12.9 million for the nine months ended September 30, 2024, from $19.8 million in the same period in 2023, a reduction of 34.7%[29] Net Loss and Financial Performance - Net loss for Q3 2024 was $14.6 million, resulting in a net loss per share of $0.59[8] - Net loss for the nine months ended September 30, 2024, was $40.5 million, compared to $48.6 million in the same period in 2023, an improvement of 16.7%[29] Cash and Investments - Total cash, cash equivalents, and investments at the end of Q3 2024 were $20.9 million, up from $9.7 million at the start of the quarter, driven by a $15 million debt issuance and other proceeds[9] - Cash and cash equivalents increased to $19.7 million in September 2024 from $12.1 million in December 2023, a growth of 62.3%[26] - Cash and cash equivalents at the end of the period were $19,691 thousand in 2024 and $20,162 thousand in 2023[32] Assets and Liabilities - Total current assets rose to $27.4 million in September 2024, up from $24.5 million in December 2023, an increase of 12.1%[26] - Total liabilities increased to $80.8 million in September 2024 from $51.3 million in December 2023, a significant rise of 57.5%[26] - Total stockholders' deficit increased to $48.5 million in September 2024 from $19.9 million in December 2023, a rise of 143.8%[27] Financing Activities - Net cash provided by financing activities increased to $27,639 thousand in 2024 from $8,912 thousand in 2023[32] - Proceeds from issuance of 16.00% Notes amounted to $15,000 thousand in 2024[32] - Proceeds from issuance of Units totaled $10,232 thousand in 2024[32] - Units offering issuance costs were $1,234 thousand in 2024[32] - Proceeds from issuance of common stock to related party were $4,000 thousand in 2023[32] - Payments on finance leases decreased to $683 thousand in 2024 from $1,357 thousand in 2023[32] - Transaction costs related to debt and equity issuances were $202 thousand in 2024 compared to $3,731 thousand in 2023[32] - Proceeds from issuance of 5.00% Notes were $10,000 thousand in 2023[32] Cash Flow - Net cash used in operating activities for the nine months ended September 30, 2024, was $19.1 million, compared to $32.4 million in the same period in 2023, a reduction of 41.0%[31] - Cash and cash equivalents decreased by $7,553 thousand in 2024 compared to a decrease of $14,743 thousand in 2023[32] Instrument Deployment and Contracts - The company added five new contracted Pheno instruments in the U.S. during Q3 2024, ending the quarter with 352 clinically live revenue-generating instruments and 77 contracted instruments in implementation[4] Share Issuance - Common shares outstanding increased to 24.9 million in September 2024 from 14.6 million in December 2023, a growth of 70.8%[27]

Financial Performance - Net sales for Q3 2024 were $3.0 million, a decline from $3.3 million in the same quarter of the prior year, driven by lower instrument sales but partially offset by a 9% increase in consumable product sales [5] - Gross margin improved significantly to 29% in Q3 2024, compared to 3% in the same quarter of the prior year, due to a better product sales mix and an inventory write-down in the prior year [6] - Net loss for Q3 2024 was $14.6 million, resulting in a net loss per share of $0.59 [8] - Year-to-date net sales for 2024 were $8.9 million, slightly down from $9.0 million in the same period of the prior year, primarily due to lower consumable product sales [9] - Year-to-date net loss for 2024 was $40.5 million, resulting in a net loss per share of $1.78 [11] Operational Highlights - The company began clinical trials for its WAVE system and Gram-Negative assay, marking a significant step in its innovation pipeline [3] - Received FDA 510(k) clearance for the Accelerate Arc system and BC kit, an automated positive blood culture sample preparation platform [3] - Secured contract extensions with approximately 75% of U.S. Pheno customers, positioning the company for the anticipated WAVE commercial launch [3] - Added five new contracted Pheno instruments in the U.S., ending the quarter with 352 clinically live revenue-generating instruments and 77 contracted instruments in the process of being implemented [4] Cash and Liquidity - Ended Q3 2024 with total cash, cash equivalents, and investments of $20.9 million, up from $9.7 million at the start of the quarter, driven by a $15 million debt issuance and other financial activities [9] - Cash flows from financing activities provided $27.6 million, primarily from the issuance of Units and Notes [27] Product and Technology - The Accelerate Arc system, along with the Accelerate Pheno system and Accelerate PhenoTest BC kit, aims to reduce the time clinicians wait to determine optimal antibiotic therapy for deadly infections, offering results 1–2 days faster than existing methods [18] - The company continues to focus on addressing global challenges such as antibiotic resistance and sepsis through its innovative diagnostic solutions [18]