Chembio Diagnostics Stock Falls As Q2 Earnings Lag Consensus, Doubt On Ability To Continue As Going Concern

Chembio Diagnostics Inc's CEMI Q2 sales increased 26% Y/Y to $6.5 million, missing the consensus of $8.5 million.
Net product sales increased 4% to $3.9 million. Government grant, license, and royalty, and R&D revenue totaled $2.5 million, almost double from Q2 FY20.
Chembio posted a wider operating loss of $8.3 million, compared to $7.3 million a year ago.
R&D expenses increased 46% to $2.8 million, primarily associated with clinical and regulatory work related to pursuing a EUA and 510(k) from FDA for the DPP SARS-CoV-2 Antigen test system and a EUA for the DPP Respiratory Panel.
EPS loss was $(0.45), wider than $(0.42) a year ago and missing the consensus of $(0.27).
During the quarter, Chembio recognized $1.3 million of non-cash impairment loss from the write-off of the intangible assets and $0.7 million of restructuring costs related to professional fees.
Cash and cash equivalents totaled $5.6 million.
After Q2, $36.9 million of gross proceeds were raised through the ATM offering.
Revenues during the June quarter did not meet the Company's expectations, and the shortfall in revenues was a principal cause of the Company's limited cash and cash equivalents position, according to the press release.
It undertook measures to increase revenues and liquidity, with a $28.3 million purchase order from Bio-Manguinhos to purchase DPP SARS-CoV-2 Antigen tests for delivery during 2021 in Brazil.
A $4 million purchase order from the Partnership for Supply Chain Management, supported by The Global Fund for its HIV 1/2 STAT-PAK Assay for shipment to Ethiopia into early 2022.
Earlier this week, Chembio's partner LumiraDx's COVID-19 antibody test received an FDA emergency use nod.
Price Action: CEMI shares are down 15.1% at $2.99 during the premarket session on the last check Friday.

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Chembio Diagnostics Stock Falls As Q2 Earnings Lag Consensus, Doubt On Ability To Continue As Going Concern