Accelerate Diagnostics(AXDX)2024-11-07 22:20Sales 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]