Nanotechnology Now - Press Release: "Nanosphere Announces Third Quarter 2008 Results: Files FDA 510(k) Submissions for Two New Assays"

Home > Press > Nanosphere Announces Third Quarter 2008 Results: Files FDA 510(k) Submissions for Two New Assays

Abstract:
Nanosphere, Inc. (Nasdaq:NSPH), a leader in the development and commercialization of advanced molecular diagnostics systems, today reported financial results for the third quarter and nine months ended September 30, 2008 and announced the filing of FDA 510(k) submissions for two new assays.

Nanosphere Announces Third Quarter 2008 Results: Files FDA 510(k) Submissions for Two New Assays

Northbrook, IL | Posted on November 11th, 2008

"We are making good progress toward our 2008 objectives including system placements and product development programs. Although product revenue was up slightly on a sequential basis from the second quarter, we do not expect to see significant revenue growth until we expand our test menu. Toward that end, we have filed FDA 510(k) submissions for two new products, a cystic fibrosis assay and a respiratory assay panel that tests for viruses including influenza A/B and RSV A/B. Moreover, development of additional assays, including our cardiac troponin I test for earlier detection of cardiovascular disease, are on track," said William Moffitt, Nanosphere's president and chief executive officer.

During the third quarter of 2008, revenue from sales of the Verigene System and test cartridges was $210,000 compared to $195,000 in the second quarter and $6,000 for the third quarter of 2007. Revenue was primarily from cartridge sales and rental agreements. Revenue from contracts and government grants during the third quarter of 2008 was $73,000 compared to $193,000 a year ago.

For the nine months ended September 30, 2008, revenue was $1,054,000 compared with $979,000 recorded in the comparable period in 2007. Product revenue increased to $708,000 for the first nine months of 2008 from $60,000 in the same period in 2007. Revenue from contracts and government grants was $346,000 for the nine months ended September 30, 2008 and $919,000 for the nine months ended September 30, 2007.

Research and development expense of $5.7 million for the three months ended September 30, 2008, was essentially unchanged from $5.8 million for the same period in 2007. For the nine months ended September 30, 2008, R&D expense rose to $17.6 million from $16.3 million for the nine months ended September 30, 2007. This increase in spending reflects investment in new products such as our protein assay to detect cardiac troponin I, additional human genetic and infectious disease assays and our Verigene II platform.

Sales, general and administrative expense decreased to $3.4 million for the three months ended September 30, 2008, from $4.4 million for the three months ended September 30, 2007 due primarily to a non-recurring compensation expense of $1.7 million in the prior year. For the nine months ended September 30, 2008, SG&A expense increased to $10.6 million, from $9.7 million for the comparable period a year ago, primarily due to incremental investment in sales personnel and other marketing expenses to support the sales of the Verigene System.

Conference Call Details

The company will hold a live conference call and webcast for investors on Monday, November 10, 2008 at 5:00 P.M., Eastern Daylight Time. The teleconference can be accessed by dialing 888-680-0878 (U.S./Canada) or 617-213-4855 (international), participant code 99658916. The call will also be broadcast live over the Internet and can be accessed by interested parties at the Investor Relations tab on the Nanosphere website: www.nanosphere.us. For interested individuals unable to join the call or webcast, a replay will be available through November 24, 2008, by dialing 888-286-8010 or for international calls, 617-801-6888, pass code 64293975, or on the company's website.

####

About Nanosphere, Inc.
Nanosphere develops, manufactures and markets an advanced molecular diagnostics platform, the Verigene(r) System, for direct genomic and ultra-sensitive protein detection. This easy to use and cost effective platform enables simple, low cost and highly sensitive genomic and protein testing on a single platform. Nanosphere is based in Northbrook, IL.

Except for historical information, the matters discussed in this press release are "forward-looking statements" and are subject to risks and uncertainties. Actual results could differ materially from these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (i) Nanosphere's ability to develop commercially viable products; (ii) Nanosphere's ability to achieve profitability; (iii) Nanosphere's ability to produce and market its products; (iv) Nanosphere's ability to obtain regulatory approval of its products; (v) Nanosphere's ability to protect its intellectual property; (vi) competition and alternative technologies; and (vii) Nanosphere's ability to obtain additional financing, if and when necessary, to support its operations. Additional risks are discussed in the Company's current filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

                          Nanosphere, Inc.
                      Statements of Operations
                             (Unaudited)

                Three Month Periods Ended    Nine Month Periods Ended
                      September 30,               September 30,
                ------------------------------------------------------
                    2008          2007          2008          2007
                ------------  ------------  ------------  ------------
                              (As Adjusted)               (As Adjusted)

 REVENUE:
  Grant and
   contract
   revenue      $     73,459  $    192,880  $    346,071  $    919,383
  Product sales      209,772         6,125       707,891        59,795
                ------------  ------------  ------------  ------------
   Total revenue     283,231       199,005     1,053,962       979,178
 COSTS AND
  EXPENSES:
  Cost of
   product sales     246,128         2,844       821,733        21,211
  Research and
   development     5,683,346     5,778,946    17,631,003    16,287,056
  Sales,
   general, 
   and
   admini-
   strative        3,376,807     4,429,214    10,563,212     9,685,797
                ------------  ------------  ------------  ------------
   Total costs
    and expenses   9,306,281    10,211,004    29,015,948    25,994,064
                ------------  ------------  ------------  ------------
   Loss from
    operations    (9,023,050)  (10,011,999)  (27,961,986)  (25,014,886)
 OTHER INCOME
  (EXPENSE):
  Change in fair
   value of
   convertible
   derivative
   liability              --   (11,888,721)           --   (11,888,721)
  Change in fair
   value of
   preferred
   stock
   warrants               --    (4,858,974)           --    (5,135,586)
  Foreign
   exchange
   (gain) loss         1,347       (27,175)      (23,298)      (40,945)
  Interest
   expense          (499,836)     (572,772)   (1,630,464)   (1,396,520)
  Interest
   income            495,067       286,654     1,973,984     1,045,087
                ------------  ------------  ------------  ------------
   Total other
    income
    (expense)         (3,422)  (17,060,988)      320,222   (17,416,685)
                ------------  ------------  ------------  ------------
 NET LOSS         (9,026,472)  (27,072,987)  (27,641,764)  (42,431,571)
  Accumulated
   convertible
   preferred
   stock
   dividends              --    (1,652,493)           --    (4,832,822)
  Convertible
   preferred
   stock
   redemption
   value
   adjustment             --            --            --      (608,940)
                ------------  ------------  ------------  ------------
 NET LOSS
  ATTRIBUTABLE
  TO COMMON
  STOCK         $ (9,026,472) $(28,725,480) $(27,641,764) $(47,873,333)
                ============  ============  ============  ============
 Net loss per
  common share
  -- basic and
  diluted       $      (0.41) $     (30.80) $      (1.24) $     (51.33)
 Weighted
  average number
  of common
  shares
  outstanding --
  basic and
  diluted         22,228,539       932,646    22,207,843       932,646


                          Nanosphere, Inc.
                      Condensed Balance Sheets
                             (Unaudited)

                                            September 30, December 31,
                                                2008          2007
                                            ------------  ------------
                                                           As Adjusted

 Cash and cash equivalents                  $ 83,742,196  $114,312,573
 Other current assets                          2,738,028     2,674,205
                                            ------------  ------------
 Total current assets                         86,480,224   116,986,778
 Net property and equipment                    7,924,030     7,033,597
 Intangible assets - net of accumulated
  amortization                                 1,526,471     1,779,934
 Other assets                                    136,373       163,553
                                            ------------  ------------
 Total assets                               $ 96,067,098  $125,963,862
                                            ============  ============

 Current liabilities                           8,243,278     9,301,903
 Long term liabilities                         4,450,313     7,462,237
 Total stockholders' equity (deficit)         83,373,507   109,199,722
                                            ------------  ------------
 Total liabilities and stockholders'
  equity                                    $ 96,067,098  $125,963,862
                                            ============  ============

For more information, please click here

Contacts:
Nanosphere, Inc.
Investors:
Roger Moody, Chief Financial Officer
847-400-9021

The Torrenzano Group
Media:
Rick Anderson
212-681-1700, Ext. 115