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) February 19, 2019

 

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. ¨

 

 

 

 

Item 2.02Results of Operations and Financial Condition.

 

On February 19, 2019, Accelerate Diagnostics, Inc. issued a press release announcing its financial results of operations for the quarter ending December 31, 2018 and full-year 2018. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference in its entirety.

 

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.

 

Exhibit    
Number   Description
     
99.1  

Press Release, dated February 19, 2019

 

 

 

 

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: February 19, 2019

ACCELERATE DIAGNOSTICS, INC.

(Registrant)

 

/s/ Steve Reichling

Steve Reichling

Chief Financial Officer

 

 

 

 

 

 

EXHIBIT INDEX 

 

Exhibit    
Number   Description
     
99.1  

Press Release, dated February 19, 2019

 

 

 

 

 

 

 

 

EXHIBIT 99.1

 

Accelerate Diagnostics Reports 2018 Fourth Quarter and Full-Year Financial Results

 

TUCSON, Ariz., February 19, 2019 -- Accelerate Diagnostics, Inc. (NASDAQ: AXDX) today announced financial results for the fourth quarter and fiscal year ended December 31, 2018.

 

“I am pleased to report an improvement in our commercial progress during the fourth quarter after a challenging start to 2018,” said Lawrence Mehren, President and CEO of Accelerate Diagnostics, Inc. “We worked diligently over the first three quarters of the year to implement significant changes to our commercial strategy in order to improve our access to the hospital market. These efforts began to bear meaningful fruit during the fourth quarter as we added 133 new commercial contracts, including 117 in the U.S., which more than doubles our number of U.S. commercially contracted instruments. We enter 2019 with renewed confidence and belief that careful and consistent execution will enable us to capitalize on the tremendous opportunity in front of us and bring our life-saving technology to an ever-expanding number of patients around the globe.”

 

Fourth Quarter 2018 Highlights

 

·Added 133 commercially contracted instruments, compared to 22 in the fourth quarter of 2017.

 

·Net sales of $1.8 million, compared to $2.1 million in the fourth quarter of 2017, a decrease attributable to lower capital sales mix as customers began adopting using reagent rental agreements, an option not available in the prior year period.

 

·Gross margin was 29%, which included an unfavorable 24 percentage point reduction due to increased costs arising from investments in service and manufacturing capacity ahead of production demand. Gross margin was 69% in the fourth quarter of 2017, which included a benefit of 16 percentage points due to the sale of pre-FDA manufactured instruments which had previously been written off to research and development.

 

·Selling, general, and administrative expenses were $13.4 million, compared to $11.5 million for the fourth quarter of 2017, driven by the expansion of our U.S. sales team and costs related to increased global sales and marketing activity.

 

·Research and development (R&D) expense was $6.9 million, compared to $6.1 million in the fourth quarter of 2017, due to continued investment in clinical outcomes studies and costs incurred in preparation for respiratory FDA registration and outcomes studies.

 

·Net loss was $22.2 million, or $0.41 per share, which included $2.2 million in non-cash stock-based compensation expense.

 

·Net cash used was $14.1 million.

 

Full Year 2018 Highlights

 

·Ended the year with 202 global commercially contracted instruments, compared to 78 at the end of 2017.

 

·Net sales of $5.7 million, compared to $4.2 million in 2017, driven by increased Accelerate Pheno instrument placements and the resulting sales of Accelerate PhenoTest™ BC test kits.

 

·Gross margin was 44%, which included an unfavorable 9 percentage point reduction due to costs arising from investments in service and manufacturing capacity ahead of production demand. Gross margin was 76% in 2017, which included a benefit of 21 percentage due to the sale of pre-FDA manufactured instruments which had previously been written off to R&D.

 

·Selling, general, and administrative expenses were $55.2 million, compared to $45.1 million in 2017, driven by expansion of the U.S. sales team and costs related to increased global sales and marketing activity.

 

·Research and development expenses for the year were $27.6 million, compared to $22.3 million in 2017, due to continued investment in clinical outcomes studies and costs incurred in preparation for respiratory FDA registration and outcomes studies.

 

·Net loss was $88.3 million, or $1.62 per share. Net loss included $14.7 million in non-cash stock-based compensation expense.

 

·Net cash used was $64.1 million. The Company ended the year with total cash, investments, and cash-equivalents from all activities of $166.5 million.

 

Full financial results for the fourth quarter and full-year 2018 will be filed on Form 10-K through the Securities and Exchange Commission’s (SEC) website at http://www.sec.gov. Investors are cautioned not to place undue reliance on these preliminary and unaudited estimates in the event of material changes.

 

 

 

 

Audio Webcast and Conference Call

  

The Company will host a conference call at 4:30 p.m. ET today to review its fourth quarter and full-year 2018 results.

 

To participate in this conference call, dial +1.877.883.0383 and enter the conference ID: 3234922. International participants may dial +1.412.902.6506. Please dial in 10-15 minutes before 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 the replay code 10128408 until May 21, 2019.

 

This conference call will also be webcast and can be accessed from the “Investors” section of the Company’s website at ir.axdx.com. A replay of the audio webcast will be available until May 21, 2019.

 

About Accelerate Diagnostics, Inc.

 

Accelerate Diagnostics, Inc. 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 serious infections. The FDA-cleared system and kit fully automate sample preparation steps, enabling phenotypic antibiotic susceptibility results in about 7 hours directly from positive blood cultures. Recent external studies indicate the solution offers results 1 to 2 days faster than existing methods, enabling clinicians to optimize antibiotic selection and dosage specific to the individual patient’s infection, 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 and the related conference call and webcast 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, Inc. 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 subsequent 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.

 

###

 

Investor Inquiries:

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

 

Media Contact:

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

 

Source: Accelerate Diagnostics, Inc.

 

 

 

  

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

BALANCE SHEETS

(Unaudited)

(in thousands, except share data)

 

  December 31, 
  2018   2017 
ASSETS 
Current assets:          
Cash and cash equivalents  $66,260   $28,513 
Investments   100,218    80,648 
Trade accounts receivable   1,860    1,946 
Inventory   7,746    8,063 
Prepaid expenses   980    850 
Other current assets   576    468 
Total current assets   177,640    120,488 
Property and equipment, net   7,303    4,890 
Intellectual property, net   114    134 
Other non-current assets  208     
Total assets  $185,265   $125,512 
  
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:          
Accounts payable  $1,322   $2,080 
Accrued liabilities   4,962    3,636 
Accrued Interest   1,262     
Deferred revenue and income   217    1,071 
Total current liabilities   7,763    6,787 
Other long term liabilities   53    21 
Convertible notes   120,074     
Total liabilities   127,890    6,808 
           
Commitments and contingencies          
           
Stockholders' equity:          
Preferred shares, $0.001 par value;          
5,000,000 preferred shares authorized and none outstanding as of December 31, 2018 and 2017        
Common stock, $0.001 par value;          
75,000,000 common shares authorized with 54,231,876 shares issued and outstanding on December 31, 2018 and 75,000,000 authorized with 55,673,810 shares issued and outstanding on December 31, 2017   54    56 
Contributed capital   432,885    360,620 
Treasury stock   (45,067)    
Accumulated deficit   (330,348)   (241,972)
Accumulated other comprehensive income (loss)   (149)    
Total stockholders' equity   57,375    118,704 
Total liabilities and stockholders' equity  $185,265   $125,512 

 

See accompanying notes to consolidated financial statements.

 

 

 

 

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(in thousands, except per share data)

 

  Years Ended December 31, 
   2018   2017   2016 
Net sales  $5,670   $4,177   $246 
                
Cost of sales   3,187    1,002     
Gross profit   2,483    3,175    246 
                
Costs and expenses:               
Research and development   27,638    22,301    29,564 
Sales, general and administrative   55,214    45,058    37,183 
Total costs and expenses   82,852    67,359    66,747 
                
Loss from operations   (80,369)   (64,184)   (66,501)
                
Other income (expense):               
Interest expense   (10,113)        
Foreign currency exchange loss   (450)   (75)   (77)
Interest and dividend income   2,845    908    494 
Other expense, net   (28)   (184)   (23)
Total other income (expense), net   (7,746)   649    394 
                
Net loss before income taxes   (88,115)   (63,535)   (66,107)
Provision for income taxes   (211)   (493)   (267)
Net loss  $(88,326)  $(64,028)  $(66,374)
                
Basic and diluted net loss per share  $(1.62)  $(1.18)  $(1.29)
Weighted average shares outstanding   54,494    54,073    51,276 
                
Other comprehensive loss:               
Net loss  $(88,326)  $(64,028)  $(66,374)
Net unrealized gain (loss) on available-for-sale investments   23    (117)   (64)
Foreign currency translation adjustment   (172)   321    (128)
Comprehensive loss  $(88,475)  $(63,824)  $(66,566)

 

See accompanying notes to consolidated financial statements.

 

 

 

 

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands)

 

  Shares   Common
Stock
Amount
   Contributed
Capital
   Accumulated
Deficit
   Treasury
stock
   Accumulated
Other
Comprehensive 
   Total
Stockholders’
Equity
 
Balances, January 1, 2016   51,191   $51   $243,894   $(110,915)  $   $(12  $133,018 
Net loss               (66,374           (66,374
Exercise of options and warrants   314    1    1,496                1,497 
Issuance of common stock under employee purchase plan   11        226                226 
Short swing profits (net of costs)           866                866 
Unrealized loss on available-for-sale securities                       (64   (64
Foreign currency translation adjustment                       (128   (128
Equity-based compensation           8,775                8,775 
Balances, December 31, 2016   51,516    52    255,257    (177,289       (204   77,816 
Net loss               (64,028)           (64,028
Issuance of common stock   3,085    3    83,221                83,224 
Exercise of options and warrants   1,045    1    6,605                6,606 
Issuance of common stock under employee purchase plan   28        597                597 
Unrealized loss on available-for-sale securities                       (117   (117
Foreign currency translation adjustment                       321    321 
Cumulative impact of accounting change               (655           (655
Equity-based compensation           14,940                14,940 
Balances, December 31, 2017   55,674    56    360,620    (241,972           118,704 
Net loss               (88,326           (88,326
Exercise of options and restricted stock awards issued   382        3,749                3,749 
Issuance of common stock under employee purchase plan   35        583                583 
Unrealized loss on available-for-sale securities                       23    23 
Foreign currency translation adjustment                       (172   (172
Repurchase of common stock under Prepaid Forward contract   (1,859   (2           (45,067       (45,069
Issuance of convertible note           53,283                53,283 
Cumulative impact of accounting change               (50           (50
Equity-based compensation           14,650                14,650 
Balances, December 31, 2018   54,232   $54   $432,885   $(330,348  $(45,067  $(149)    $57,375 

  

See accompanying notes to consolidated financial statements.

 

 

 

 

ACCELERATE DIAGNOSTICS, INC.

CONSOLIDATED

STATEMENT OF CASH FLOWS

(Unaudited)

(in thousands)

 

  Years Ended December 31, 
  2018   2017   2016 
Cash flows from operating activities:               
Net loss  $(88,326)  $(64,028)  $(66,374)
Adjustments to reconcile net loss to net cash used in operating activities:               
Depreciation and amortization   2,561    2,196    2,351 
Amortization of investment discount   (621)   326    374 
Equity-based compensation   14,650    13,933    8,775 
Amortization of debt discount and issuance costs   6,849         
Realized gain on available-for-sale securities           (6)
Loss on disposal of property and equipment   678    240    23 
(Increase) decrease in assets:               
Accounts receivable   86    (1,912)   43 
Inventory   (4,451)   (7,759)    
Prepaid expense and other assets   (250)   (459)   1,121 
Increase (decrease) in liabilities:               
Accounts payable   (748)   1,064    (1,242)
Accrued liabilities   1,426    596    1,619 
Accrued interest   1,262         
Deferred revenue and income   (904)   36    (92)
Deferred compensation   32    21     
Net cash used in operating activities   (67,756)   (55,746)   (53,408)
Cash flows from investing activities:               
Purchases of equipment   (998)   (2,966)   (2,409)
Purchase of marketable securities   (120,556)   (82,333)   (74,075)
Proceeds from sales of marketable securities   3,000    11,522    9,716 
Maturities of marketable securities   98,416    48,049    17,200 
Net cash used in investing activities   (20,138)   (25,728)   (49,568)
Cash flows from financing activities:               
Proceeds from exercise of warrants and options   3,749    6,606    1,497 
Common stock issuance cost           (814)
Proceeds from issuance of common stocks and warrants   583    83,821    226 
Recovery of related party short-swing profits           866 
Payments on capital lease obligations           (13)
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   125,771    90,427    1,762 
Effect of exchange rate on cash   (130)   316    (127)
Increase (decrease) in cash and cash equivalents   37,747    9,269    (101,341)

Cash and cash equivalents, beginning of period

   28,513    19,244    120,585 
Cash and cash equivalents, end of period  $66,260   $28,513   $19,244 

  

See accompanying notes to consolidated financial statements.