UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Date of report (Date of earliest event reported) November 6, 2018

 

Accelerate Diagnostics, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-31822 84-1072256
(Commission File Number) (IRS Employer Identification No.)
   
3950 South Country Club Road, Suite 470, Tucson, Arizona 85714
(Address of principal executive offices) (Zip Code)

 

 (520) 365-3100

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition.

 

On November 6, 2018, Accelerate Diagnostics, Inc. issued a press release announcing its financial results of operations for the quarter ending September 30, 2018 and that it will host a conference call the same day to discuss such results. A copy of the press release is attached hereto as Exhibit 99.1.

 

In accordance with General Instruction B.2 for Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 9.01Financial Statements and Exhibits.

 

(d)Exhibits.  The following materials are filed as exhibits to this Current Report on Form 8-K:

 

Exhibit  
Number Description                                                            
   
99.1 Press Release, dated November 6, 2018 
   

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

Date: November 6, 2018

ACCELERATE DIAGNOSTICS, INC.

(Registrant)

 

/s/ Steve Reichling                                   

Steve Reichling

Chief Financial Officer

 

 

 

 

EXHIBIT INDEX

 

Exhibit  
Number Description                                                            
   
99.1 Press Release, dated November 6, 2018
   

 

 

 

 

 

EXHIBIT 99.1

 

 

Accelerate Diagnostics reports Q3 2018 financial results

 

Revenue Placements up 40 Percent in U.S., Total Revenue up 64 Percent

 

TUCSON, Ariz., November 6, 2018 -- Accelerate Diagnostics, Inc. today announced financial results for the quarter ending September 30, 2018. The company reported a 40% increase in U.S. instruments placed under commercial contract, and revenue for the quarter of $1.3 million, an increase of 64% from the prior year quarter. Worldwide, revenue-generating instruments combined with those under evaluation agreements grew to 458 instruments.

 

“We’re happy to report solid commercial growth this quarter, having enabled more hospitals than ever before to tailor antibiotic use specifically for individual patients much earlier,” said Lawrence Mehren, president and chief executive officer. “Despite a challenge for capital sales, we continue to drive clinical adoption through new acquisition options and a streamlined process. We believe the emerging clinical and economic outcome data, combined with strong customer advocacy, are compelling indicators of what is to come.”

 

During the third quarter, clinicians from the University of Arkansas for Medical Sciences presented independent clinical outcome data showing a 3-day reduction in hospital length of stay for patients with bacteremia after implementing the Accelerate Pheno™ system.1

 

The company also announced it recently engaged with the U.S. Food and Drug Administration (FDA) and proposed a plan to address variability in the quantitative reference method used to compare the performance of its new test for severe bacterial pneumonia. New pre-clinical data obtained by the company in preparation of the clinical trial showed high variability in quantitative culture methods commonly used in clinical laboratories.

 

“We have found that the way laboratories perform cultures on lower respiratory tract specimens varies significantly across institutions, informed by local epidemiology, patient mix and treatment models,” said Dr. Romney Humphries, chief scientific officer of Accelerate Diagnostics. “This variability, however, means the results are not translatable from one site to another, and there is no true gold standard result.” Based on the need for further collaboration with the Agency, additional development, and related trial preparation, the company now expects to start the clinical trial in Q1 of 2019.

 

Mr. Mehren, together with Steve Reichling, chief financial officer, will host a conference call to review the financial results, commercial progress, and development updates at 4:15 p.m. Eastern Time on November 6, 2018.

 

Third quarter 2018 results

 

·Revenue-generating placements in the U.S. increased by 40%.

 

·Net sales of $1.3 million for the third quarter and $3.8 million year to date, compared to $828 thousand and $2.0 million for the same respective periods in the prior year.

 

·Gross margin realized was 49.8% for the quarter and 50.9% year to date.

 

·Selling, general, and administrative expenses for the quarter were $12.2 million and $41.8 million year to date as compared to $11.6 million and $33.6 million from the respective same periods in the prior year. These year-over-year increases were driven by higher personnel and customer evaluation–related costs for evaluations in the U.S. and EMEA regions.

 

·Research and development costs for the quarter were $7.9 million and $20.7 million year to date as compared to $6.4 million and $16.2 million from the respective same periods in the prior year. These year-over-year increases are the result of additional investments in the preparation for respiratory clinical trials and expanded scientific affairs activity.

 

·Net loss of $22.1 million in the third quarter and $66.1 million year to date, or $0.41 and $1.21 per share on weighted average basic shares outstanding of 54.1 million and 54.6 million shares, respectively. This net loss includes $3.5 million in non-cash stock-based compensation expense in the third quarter and $12.5 million year to date.

 

·Net cash used in the quarter was $16.8 million and $50 million year to date, ending the quarter with total cash, investments, and cash equivalents from all activities of $181 million.

 

 

Full financial results for the quarter ending September 30, 2018 will be filed on Form 10-Q through the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov.

 

1Dare R, McCain K, Lusardi K et al. Impact of Accelerate Pheno™ Rapid Blood Culture Detection System on Laboratory and Clinical Outcomes in Bacteremic Patients. Presented as an oral presentation at ID Week™ 2018.

 

 

 

 

 

 

Audio Webcast and Conference Call

 

Listen to an audio webcast of the call by visiting the events section of the company’s investor relations website at ir.axdx.com. A replay of the audio webcast will be available until November 26, 2018.

 

To participate in the conference call, dial +1.877.883.0383 and enter the conference ID: 0396861

 

International participants may dial +1.412.902.6506. Please dial in 10-15 minutes prior to the start of the conference. A replay of the call will be available by telephone at +1.877.344.7529 (U.S.) or +1.412.317.0088 (international) using access code 10124532 until November 26, 2018.

 

About Accelerate Diagnostics, Inc.

 

Accelerate Diagnostics, Inc. (Nasdaq:AXDX), is an in vitro diagnostics company dedicated to providing solutions for the global challenges of antibiotic resistance and sepsis. The Accelerate Pheno™ system and Accelerate PhenoTest™ BC kit combine several technologies aimed at reducing the time clinicians must wait to determine the most optimal antibiotic therapy for deadly infections. The FDA cleared system and kit fully automate the sample preparation steps to report phenotypic antibiotic susceptibility results in about 7 hours direct from positive blood cultures. Recent external studies indicate the solution offers results 1-2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient days earlier.

 

The “ACCELERATE DIAGNOSTICS” and “ACCELERATE PHENO” and “ACCELERATE PHENOTEST” and diamond shaped logos and marks are trademarks or registered trademarks of Accelerate Diagnostics, Inc.

 

For more information about the company, its products and technology, or recent publications, visit axdx.com.

 

Forward-Looking Statements

 

Certain of the statements made in this press release are forward looking, such as those, among others, about our projections as to when certain key business milestones may be achieved, the potential of our products or technology, the growth of the market, our estimates as to the size of our market opportunity and potential pricing, our competitive position and estimates of time reduction to results, and our future development plans and growth strategy. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Information about the risks and uncertainties faced by Accelerate Diagnostics is contained in the section captioned "Risk Factors" in the company's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 1, 2018, and in any other reports that we file with the Securities and Exchange Commission from time to time. The company's forward-looking statements could be affected by general industry and market conditions. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies.

 

###

 

 

Investors May Contact:

Laura Pierson, Accelerate Diagnostics, +1 520 365-3100, investors@axdx.com

 

Reporters May Contact:

Andrew Chasteen, Accelerate Diagnostics, +1 520 365-3100, achasteen@axdx.com

 

Source: Accelerate Diagnostics, Inc.

 

 

 

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

BALANCE SHEET

(in thousands, except share data)

 

   September 30,   December 31, 
   2018   2017 
   Unaudited     
ASSETS
Current assets:          
Cash and cash equivalents  $61,622   $28,513 
Investments   118,982    80,648 
Trade accounts receivable   1,440    1,946 
Inventory   9,406    8,063 
Prepaid expenses   940    850 
Other current assets   494    468 
Total current assets   192,884    120,488 
Property and equipment, net   7,412    4,890 
Intellectual property, net   119    134 
Other non-current assets   241     
Total assets  $200,656   $125,512 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $1,559   $2,080 
Accrued liabilities   3,518    3,636 
Accrued interest   191     
Deferred revenue and income   202    1,071 
Total current liabilities   5,470    6,787 
Other long term liabilities   26    21 
Convertible notes   117,754     
Total liabilities  $123,250   $6,808 
           
Commitments and contingencies          
           
Stockholders’ equity:          
Preferred shares, $0.001 par value;          
5,000,000 preferred shares authorized and none outstanding as of September 30, 2018 and December 31, 2017        
Common stock, $0.001 par value;          
75,000,000 common shares authorized with 54,196,876 shares issued and outstanding on September 30, 2018 and 75,000,000 common shares authorized with 55,673,810 shares issued and outstanding on December 31, 2017   54    56 
Contributed capital   430,734    360,620 
Treasury Stock   (45,067)    
Accumulated deficit   (308,156)   (241,972)
Accumulated other comprehensive loss   (159)    
Total stockholders’ equity   77,406    118,704 
Total liabilities and stockholders’ equity  $200,656   $125,512 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Unaudited

(in thousands, except per share data)

 

   Three Months Ended   Nine Months Ended 
   September 30,   September 30,   September 30,   September 30, 
   2018   2017   2018   2017 
Net sales  $1,355   $828   $3,848   $2,058 
                     
Cost of sales   680    191    1,889    352 
Gross profit   675    637    1,959    1,706 
                     
Costs and expenses:                    
Research and development   7,891    6,351    20,734    16,166 
Sales, general and administrative   12,153    11,601    41,835    33,589 
Total costs and expenses   20,044    17,952    62,569    49,755 
                     
Loss from operations   (19,369)   (17,315)   (60,610)   (48,049)
                     
Other income (expense):                    
Interest expense   (3,357)       (6,720)    
Foreign currency exchange (loss)   (133)   (40)   (331)   (73)
Interest income   908    323    1,983    612 
Other income, (expense), net       2    (25)   (3)
Total other income (expense), net   (2,582)   285    (5,093)   536 
                     
Net loss before income taxes   (21,951)   (17,030)   (65,703)   (47,513)
Provision for income taxes   (147)   (45)   (432)   (220)
Net loss  $(22,098)  $(17,075)  $(66,135)  $(47,733)
                     
Basic and diluted net loss per share  $(0.41)  $(0.31)  $(1.21)  $(0.89)
Weighted average shares outstanding   54,145    55,316    54,591    53,603 
                     
Other comprehensive loss:                    
Net loss  $(22,098)  $(17,075)  $(66,135)  $(47,733)
Net unrealized (loss) gain on available-for-sale investments   1    (7)   (54)   (4)
Foreign currency translation adjustment   (26)   91    (105)   295 
Comprehensive loss  $(22,123)  $(16,991)  $(66,294)  $(47,442)

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

 

ACCELERATE DIAGNOSTICS, INC.

CONDENSED CONSOLIDATED

STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

   Nine Months Ended 
   September 30,   September 30, 
   2018   2017 
Cash flows from operating activities:          
Net loss  $(66,135)  $(47,733)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   1,734    1,595 
Amortization of intangible assets   15    9 
Amortization of investment discount   (413)   298 
Equity-based compensation   12,476    10,970 
Amortization of debt discount and issuance costs   4,529     
Loss on disposal of property and equipment   540    3 
(Increase) decrease in assets:          
Accounts receivable   506    (1,077)
Inventory   (5,206)   (7,079)
Prepaid expense and other   55    (392)
Other current assets   (26)   (277)
Other non-current assets   (241)    
Increase (decrease) in liabilities:          
Accounts payable   (524)   359 
Accrued liabilities   (18)   780 
Accrued Interest   191     
Deferred revenue and income   (918)   46 
Deferred compensation   5     
Net cash used in operating activities   (53,430)   (42,498)
Cash flows from investing activities:          
Purchases of equipment   (842)   (2,055)
Purchases of available-for-sale securities   (115,634)   (68,423)
Sales of available-for-sale securities   3,000    9,522 
Maturity of available-for-sale securities   74,496    30,049 
Net cash used in investing activities   (38,980)   (30,907)
Cash flows from financing activities:          
Issuance of common stock net of issuance costs   477    83,741 
Exercise of options and warrants   3,710    4,562 
Proceeds from issuance of convertible note   171,500     
Prepayment of forward stock repurchase transaction   (45,069)    
Payment of debt issuance costs   (4,992)    
Net cash provided by financing activities   125,596    88,303 
           
Effect of exchange rate on cash:   (77)   289 
           
Increase in cash and cash equivalents   33,109    15,187 
Cash and cash equivalents, beginning of period   28,513    19,244 
Cash and cash equivalents, end of period  $61,622   $34,431 
Non-cash investing activities:          
Transfer of instruments from inventory to property and equipment  $4,061   $ 
Supplemental cash flow information:          
Interest paid  $2,001   $ 
Income taxes paid  $435   $ 

 

See accompanying notes to consolidated financial statements.