Accelerate Diagnostics(AXDX) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q2 2023, net sales were approximately $2.9 million, down from $3.9 million in Q2 2022, with year-to-date sales of $5.7 million compared to $6.8 million in the prior year [4][6] - Gross margin for the quarter was 27%, slightly improved from 28% in the prior period, while year-to-date gross margin was 32% compared to 28% [5][6] - GAAP net loss was $26 million for the quarter, resulting in a net loss per share of $2.36, with a year-to-date net loss of $42.8 million and a loss per share of $4.11 [7][8] Business Line Data and Key Metrics Changes - The U.S. contracted 13 new Pheno instruments in Q2 2023, marking the strongest quarter since 2021, with a total installed base of 339 instruments and a backlog of 70 pending implementation [4][15] - Selling, general and administrative (SG&A) expenses decreased to $7.6 million for the quarter from $11.5 million in the prior period, while year-to-date SG&A expenses were $17.7 million compared to $22.2 million [5][6] Market Data and Key Metrics Changes - The partnership with Becton Dickinson (BD) is showing positive results, with increased commercial reach and sales effectiveness, leading to quicker sales closures [14][15] - The EMEA market is experiencing complexities due to tender-driven markets, which has delayed progress, but efforts are ongoing to simplify contracts [15][16] Company Strategy and Development Direction - The company is focusing on three strategic priorities: advancing innovation with the Wave platform, growing market share through the BD partnership, and building financial strength [3][9] - The Wave platform aims to perform antibiotic susceptibility testing on both positive blood cultures and isolated colonies, addressing a significant market opportunity [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the Wave platform's potential to capture a larger market share in microbiology, with plans for preclinical studies and subsequent clinical trials [21][22] - The company anticipates a reduction in cash burn in the upcoming quarters following the completion of debt restructuring [8][17] Other Important Information - The company completed a 10-for-1 reverse stock split, retroactively adjusting all shares and per share amounts for all periods presented [7] - The company ended the quarter with cash and equivalents of $30.7 million, with expectations for improved cash flow management moving forward [8] Q&A Session Summary Question: Update on the pathway for Arc approval - The company is planning a clinical trial for Arc in the U.S. and is in the process of identifying sites and managing the trial [19] Question: Pathway for Wave approval and timeline - A preclinical study for Wave is expected to be completed by year-end, with a clinical study likely starting in Q1 2024 [21][22] Question: Competitive environment for rapid microbiology systems - The company acknowledges emerging competitors but remains confident in its product offerings and the strength of its partnership with BD [26][27] Question: Status of BD partnership and sales team training - The U.S. sales team has been fully trained, while training in Europe is ongoing, with positive activity noted in sales opportunities [29][30] Question: Impact of staffing turnover in labs and hospitals - The company is experiencing challenges due to turnover in healthcare staffing, which can delay implementation but also create new opportunities [36][37] Question: Potential impact of Arc reintroduction on BD momentum - The company is optimistic about Arc's value proposition and its potential to drive momentum once reintroduced to the U.S. market [39][41]