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HTG Molecular Diagnostics Reports Second Quarter 2018 Results

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Revenue increased 179% and 190%, respectively, compared to the three and six-month periods in the prior year             

Call scheduled for today, August 7, at 4:30 pm ET

TUCSON, Ariz., Aug. 07, 2018 (GLOBE NEWSWIRE) -- HTG Molecular Diagnostics, Inc. (NASDAQ:HTGM) (HTG), a provider of instruments, reagents and services for molecular profiling applications, today reported financial results for the three and six-month periods ended June 30, 2018.

Recent Accomplishments & Highlights:

  • Achieved revenue of $4.9 million and $9.1 million for the three and six-month periods ended June 30, 2018, respectively, which represents a 179% and 190% increase over the respective periods in 2017.
     
  • Featured a new comprehensive Precision Immuno-Oncology panel quantifying expression of nearly 1,400 genes at the 2018 American Society of Clinical Oncology (ASCO) annual meeting, in preparation for an expected commercial launch this month. This panel is automated on the HTG EdgeSeq instrument and optimized for low sample input.
     
  • Executed a master agreement with Oncologie, Inc. ("Oncologie") to partner on the development of biomarkers associated with Oncologie's immuno-oncology drug development utilizing HTG's assay development and VERI/O service lab capabilities. Oncologie has several later stage drugs in their pipeline and is dedicated to biomarker-driven clinical development for immuno-oncology.
     
  • Entered into a non-exclusive license and supply agreement with Firalis S.A. ("Firalis") supporting potential commercialization of a theranostic test to predict rheumatoid arthritis patient response to anti-TNF α therapy. HTG will provide the instrumentation and reagent kits to support Firalis's commercialization plans, expected to include both a central lab and distributed business model.

"The company continues to execute well against our 2018 objectives and longer-term strategies", said TJ Johnson, Chief Executive Officer of HTG. "We are excited about the imminent launch of our new immuno-oncology panel, and other new panels planned for launch in Q4, and we believe we are gaining momentum from our recent investments into additional sales positions, which we expect to impact our results in the back half of the year."

Second Quarter 2018 Financial Results:

Total revenue for the second quarter of 2018 was $4.9 million, an increase of 179% over the same period in the prior year and 18% over the first quarter of 2018. The increase in current year revenue was primarily due to our BioPharma development programs and steady growth of our RUO profiling services.

Product and product-related services revenue for the second quarter of 2018 was $2.0 million, compared to $1.5 million for the same period in the prior year. Collaborative development services revenue for the second quarter of 2018 was approximately $2.9 million compared to $0.3 million for the same period in the prior year.

Net loss from operations for the second quarter of 2018 was $4.1 million compared to $5.5 million for the same period in the prior year. Net loss per share was $(0.14) for the second quarter of 2018 compared to $(0.60) for the same period in the prior year.

HTG ended the second quarter of 2018 with $40.7 million of cash, cash equivalents and short term, available-for-sale securities investments.

2018 Revenue Guidance:

The company reaffirms its full year revenue guidance of $21.0 to $25.0 million.

Conference Call and Webcast:

HTG will host an investment community conference call today beginning at 4:30 p.m. Eastern Time. Conference call and webcast details follow:

Date:                            Tuesday, August 7, 2018
Time:                            4:30 p.m. Eastern Time
Toll Free:                      (866) 575-6539
International:                (323) 794-2575
Conference ID:             5460628
Webcast:                      http://public.viavid.com/index.php?id=130330

About HTG:

HTG is focused on next generation sequencing (NGS) based molecular profiling. The company's proprietary HTG EdgeSeq technology automates complex, highly multiplexed molecular profiling from solid and liquid samples, even when limited in amount. HTG's customers use its technology to identify biomarkers important for precision medicine, to understand the clinical relevance of these discoveries, and ultimately to identify treatment options. Our mission is to empower precision medicine at the local level.

Safe Harbor Statement:

Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our planned Precision Immuno-Oncology panel, and our revenue and operational expectations. Words such as "believes," "anticipates," "plans," "expects," "intends," "will," "goal," "potential" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements necessarily contain these identifying words. These forward-looking statements are based upon management's current expectations, are subject to known and unknown risks, and involve assumptions that may never materialize or may prove to be incorrect. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of various risks and uncertainties, including, without limitation, the risk that the Precision Immuno-Oncology panel may not function or provide benefits to our customers as expected, the risk that we may not achieve our revenue expectations for 2018 (including, without limitation, due to variations from our expectations in the amount or timing of work we perform under one or more companion diagnostic development programs with large pharma customers, which development programs comprise an increasing portion of our business and therefore have the ability to significantly impact the timing and amount of revenue recognized in one or more fiscal periods), the risk that we may not realize the benefits expected under our collaboration agreements, risks associated with our ability to successfully commercialize our products; the risk that our products and services may not be adopted by biopharmaceutical companies or other customers as anticipated, or at all; our ability to manufacture our products to meet demand; the level and availability of first party payor reimbursement for our products; our ability to effectively manage our anticipated growth; our ability to protect our intellectual property rights and proprietary technologies; our ability to operate our business without infringing the intellectual property rights and proprietary technology of first parties; competition in our industry; additional capital and credit availability; our ability to attract and retain qualified personnel; and product liability claims. These and other factors are described in greater detail in our filings with the Securities and Exchange Commission, including without limitation our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018. All forward-looking statements contained in this press release speak only as of the date on which they were made, and we undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

-Financial tables follow-

                                   

   
HTG Molecular Diagnostics, Inc.  
Condensed Statements of Operations  
(Unaudited)  
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2018     2017     2018     2017  
Revenue:                                
Product and product-related services   $ 2,023,312     $ 1,458,345     $ 3,756,858     $ 2,829,514  
Collaborative development services     2,887,454       302,411       5,312,560       302,411  
Total revenue     4,910,766       1,760,756       9,069,418       3,131,925  
Cost of revenue     1,450,682       1,236,904       2,587,745       2,532,206  
Gross margin     3,460,084       523,852       6,481,673       599,719  
                                 
Operating expenses:                                
  Selling, general and administrative     4,764,751       4,413,437       10,422,583       8,651,904  
  Research and development     2,758,984       1,618,889       5,348,270       2,885,952  
Total operating expenses     7,523,735       6,032,326       15,770,853       11,537,856  
Operating loss     (4,063,651 )     (5,508,474 )     (9,289,180 )     (10,938,137 )
Loss on settlement of Growth Term Loan                 (105,064 )      
Other expense, net     (35,533 )     (332,428 )     (84,887 )     (718,759 )
Net loss before income taxes     (4,099,184 )     (5,840,902 )     (9,479,131 )     (11,656,896 )
Provision for income taxes     3,545             3,545       280  
Net loss   $ (4,102,729 )   $ (5,840,902 )   $ (9,482,676 )   $ (11,657,176 )
                                 
Net loss per share, basic and diluted   $ (0.14 )   $ (0.60 )   $ (0.36 )   $ (1.31 )
Shares used in computing net loss per share, basic and diluted     28,375,379       9,769,322       26,549,895       8,875,177  
                                 


   
HTG Molecular Diagnostics, Inc.  
Condensed Balance Sheets  
   
                 
    June 30,     December 31,  
    2018     2017  
Assets   (Unaudited)          
Current assets:                
Cash and cash equivalents   $ 5,774,356     $ 9,968,600  
Short-term investments available-for-sale, at fair value     34,955,936        
Accounts receivable     3,481,994       6,356,268  
Inventory, net of allowance of $62,329 at June 30, 2018 and $62,142
at December 31, 2017
    1,002,549       1,180,521  
Prepaid expenses and other     845,170       443,068  
Total current assets     46,060,005       17,948,457  
                 
Deferred offering costs           2,953  
Deferred MidCap revolving loan costs     75,184        
Property and equipment, net     2,888,995       3,304,890  
Total assets   $ 49,024,184     $ 21,256,300  
                 
Liabilities and stockholders' deficit                
Current liabilities:                
Accounts payable   $ 1,306,917     $ 2,438,798  
Accrued liabilities     2,427,776       3,746,786  
Contract liabilities - current     315,592       665,882  
NuvoGen obligation - current     605,979       496,442  
Growth Term Loan payable - net of discount and debt issuance costs           5,793,599  
Other current liabilities     199,164       200,460  
Total current liabilities     4,855,428       13,341,967  
NuvoGen obligation - non-current, net of discount     6,970,277       7,520,913  
Convertible note, related party - net of debt issuance costs     2,967,487       2,960,760  
MidCap Term Loan payable - net of discount and debt issuance costs     6,626,886        
Other non-current liabilities     389,490       492,197  
Total liabilities     21,809,568       24,315,837  
Commitments and Contingencies (Note 14)                
Stockholders' equity (deficit):                
Common stock, $0.001 par value; 200,000,000 shares authorized at
  June 30, 2018 and December 31, 2017, 28,414,524 shares issued
  and outstanding at June 30, 2018 and 13,929,763 shares issued and
  outstanding at December 31, 2017
    28,414       13,929  
Additional paid-in-capital     171,246,278       131,492,595  
Accumulated other comprehensive loss     (11,339 )      
Accumulated deficit     (144,048,737 )     (134,566,061 )
Total stockholders' equity (deficit)     27,214,616       (3,059,537 )
Total liabilities and stockholders' equity (deficit)   $ 49,024,184     $ 21,256,300  
                 

Contact:

Ashley Robinson
LifeSci Advisors, LLC
Phone: (617) 775-5956
Email: arr@lifesciadvisors.com

TJ Johnson
Chief Executive Officer
HTG Molecular Diagnostics
Phone: (520) 547-2827 x130
Email: tjjohnson@htgmolecular.com

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