Accelerate Diagnostics(US:AXDX)2023-11-09 22:37Financial Data and Key Metrics Changes - In Q3 2023, net sales were approximately $3.3 million, compared to $3 million in Q3 2022, while year-to-date sales were $9 million, down from $9.8 million in the prior year [10] - Gross margin for the quarter was approximately 40%, up from 20% in the prior year, and year-to-date gross margin was 34%, compared to 25% previously [11] - GAAP net income for the quarter was approximately $910,000, with a year-to-date net loss of approximately $48.6 million, resulting in a net income per share of $0.06 for the quarter and a net loss of $4.13 per share year-to-date [13] Business Line Data and Key Metrics Changes - The company contracted 6 new Pheno instruments in Q3, ending the quarter with a total of 339 revenue-generating Pheno instruments and a backlog of 70 instruments pending implementation [10] - More than 20 existing customers secured multiyear contract extensions for rapid positive blood cultures susceptibility testing during the quarter [10] Market Data and Key Metrics Changes - The Wave platform is designed to address both the 130 million tests performed from isolated colonies and over 7 million tests from positive blood culture samples globally [6] - The company is actively exploring commercialization options for the Wave system, with plans for pre-marketing activities next year [8] Company Strategy and Development Direction - The company is focused on advancing the ARC system and the Wave platform, with clinical trials for ARC already initiated and progress made in the development of Wave [4][5] - The partnership with Becton Dickinson (BD) is seen as a key strategy to enhance market penetration and sales effectiveness, with ongoing training and alignment of sales processes [21][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress of the Wave program and the potential for FDA submission in mid-2024, with a commercial launch expected in early 2025 [8][41] - The company is addressing challenges in the EMEA market by signing new agreements with BD to facilitate tender responses [22] Other Important Information - Non-operating income for the quarter was $15.7 million, primarily due to a fair value adjustment related to convertible notes [13] - The company ended the quarter with cash and investments totaling $21.2 million [13] Q&A Session Summary Question: Can you discuss the Wave system compared to the current standard of care? - Management highlighted that the Wave system aims to provide results in under 4.5 hours, significantly faster than the current market leader, Fino, which has an 8-hour turnaround time [16][17] Question: What is the status of the BD partnership and its impact on sales? - Management acknowledged a disappointing quarter for new contracted placements but noted ongoing progress in the sales funnel and training of BD sales representatives [21][22] Question: What is the latest on ARC enrollment and FDA approval timing? - Management confirmed that clinical trials for ARC are progressing well, with one site completing enrollment and plans for FDA submission in the coming months [30] Question: How does the company view the competitive environment for rapid microbiology systems? - Management stated that competition is beneficial as it highlights the need for improved diagnostic methods, asserting that Pheno remains a competitive solution despite emerging players [36] Question: When can we expect the BD partnership to materially boost the installed base? - Management indicated that while this quarter was less successful than the previous one, they expect continued improvement in new opportunities as BD's sales team becomes more familiar with the products [39]