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Ahead of its presentation at
the JP Morgan Healthcare Conference in San Francisco later today, Cepheid
this morning shared an update on Xpert test availability,
highlighting that significant progress towards a return to normal
manufacturing operations was achieved despite higher than anticipated demand
for a number of Xpert test products during the fourth quarter.
"With respect to our manufacturing operations, the underlying causes of our
2012 second half challenges have been resolved," said John Bishop, Cepheid's
Chief Executive Officer. "Additionally, we brought up a second Reagents on
Board Automation Line, or ROBAL, here in Sunnyvale slightly ahead of schedule
which expands our capacity significantly. Further, we are accelerating the
completion of a second ROBAL line in our Swedish facility by one year and
expect to have the line functional in the second half of this year."
Continued Bishop, "While many of our Xpert tests came off allocation in the
fourth quarter as we expected, our operational remedies took several weeks
longer than we originally anticipated. Having taken the extra time, however,
we are confident that we are building a world-class manufacturing operation
capable of meeting increasing product demand and ensuring a consistent supply
of our growing menu of tests for all Xpert customers."
"That said, due to stronger than anticipated demand, certain Xpert products
remain on allocation at this time, namely Xpert MRSA and Xpert Flu," concluded
Bishop. "As we move through these final weeks of allocations, I'd like to
thank our customers for their patience and reassure them that we are doing
everything we can to ensure this experience is not repeated."
Preliminary 2012 Fourth Quarter Results
Based on preliminary analysis, the Company currently expects 2012 Fourth
Quarter revenue results to include:
Preliminary Results Previous Company Guidance
(8 January 2013) (18 October 2012)
Total Revenue Approximately $92 million Approximately $94 million
Commercial Clinical Approximately $72 million Approximately $69 million
HBDC Clinical Approximately $10 million Approximately $16 million
Commercial Clinical revenue was higher than expected due to strength in Xpert
Flu, Xpert MRSA and Xpert C. difficile, which contributed to year-over-year
normalized growth in Commercial Clinical reagents of approximately 30%.
Commercial Clinical systems revenue was solid, as expected, and the Company
expects to confirm more than 59 GeneXpert system placements in North America.
HBDC was impacted by variability in systems placements in addition to
supply-related delays in our international manufacturing operation, which we
expect to be fully resolved during the first quarter of 2013.
As a reminder, Cepheid's Commercial Clinical revenue contributes a higher
gross margin than the Company's HBDC revenue. Based on preliminary analysis,
and given the revenue mix in the fourth quarter, the Company currently expects
to report bottom line results just above the upper end of its
previously-announced guidance ranges. These were:
Fourth Quarter Guidance – As of 18 October 2012
GAAP EPS $(0.03) to $(0.01)
Non-GAAP EPS $0.10 to $0.12
Full year non-GAAP net income per share excludes the effect of approximately
$26 million related to stock-based compensation expense, approximately $15
million related to a litigation settlement, approximately $2.8 million related
to the amortization of acquired intangibles, and a $1.8 million tax benefit
related to an intercompany intellectual property transaction.
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