Accelerate Diagnostics(US:AXDX)2024-08-10 22:55Financial Data and Key Metrics Changes - Net sales for Q2 2024 were approximately $3 million, an increase from approximately $2.9 million in the same period last year, driven by low double-digit growth in recurring consumable net sales [15] - Gross margin decreased to approximately 23% from approximately 27% year-over-year, attributed to product mix [15] - Selling, general and administrative (SG&A) expenses were approximately $5.4 million, down from $7.6 million in the prior year, reflecting lower employee-related expenses [15] - Research and development (R&D) expenses were $3.9 million, down from $5.8 million, due to lower third-party development expenses for the Wave program [15] - The net loss for the quarter was approximately $11.6 million, resulting in a net loss per share of $0.50 [15] Business Line Data and Key Metrics Changes - The Wave program is positioned to disrupt the antimicrobial susceptibility testing market, with a focus on both positive blood culture and traditional isolated colony testing [5][6] - The preclinical trial for the Wave platform showed approximately 95% essential and categorical agreement across 20 antibiotics, indicating strong clinical performance [8] Market Data and Key Metrics Changes - The combined global antimicrobial susceptibility testing (AST) market is estimated at $2 billion, with Wave offering a competitive cost structure and faster results [6] Company Strategy and Development Direction - The company aims to leverage its position in the positive blood culture market, expand into isolate susceptibility testing, and apply holographic imaging technology to other diagnostic areas [10][12] - The strategic roadmap includes launching Wave with regulatory clearances, expanding assay offerings, and focusing on operational and development milestones to maximize value [10][12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Wave platform's potential to address significant healthcare issues related to bacterial antimicrobial resistance, with a focus on rapid susceptibility testing [30][31] - The company has secured additional capital to fund operations through 2025, allowing for continued development and clinical trials [13][31] Other Important Information - The preclinical trial success has set the stage for an imminent clinical trial, with systems installed at four external sites [9] - Approximately 75% of the U.S. customer base is signed to longer-term contracts ahead of the Wave commercial launch [10] Q&A Session Summary Question: What levels of essential agreement and categorical agreement are needed for the clinical trial? - Management indicated that the FDA requires performance above 89.9% for approval, and the preclinical trial results were in the mid-90s, providing confidence for the upcoming clinical trial [20][21] Question: What led to the decision to focus on achieving milestones before working with strategic partners? - Management noted that securing funding and demonstrating the platform's capabilities through preclinical results would maximize value for stakeholders before engaging with strategic partners [22][24] Question: Can you help bridge the cash balance to your target of funding through 2025? - Management confirmed a pro forma cash balance in the mid-$25 million range and highlighted significant cost-cutting initiatives that have reduced cash burn, aiming for an operating cash burn target of about $5 million [25][28]