Chembio Diagnostics, Inc. (Nasdaq: CEMI), a leading point-of-care
diagnostics company focused on infectious diseases, today reported
financial results for the quarter ended September 30, 2020.
Recent Accomplishments & Highlights
- Achieved total revenue of $10.3
million and product revenue of $8.4 million for the third quarter
of 2020, representing growth of 6% and a decrease of 1%
respectively, compared to the prior year period
- Submitted an Emergency Use Authorization (EUA) application to
the U.S. Food and Drug Administration (FDA) for the DPP SARS-CoV-2
Antigen test system, which was funded with the support of the U.S.
Department of Health and Human Services, Office of the Assistant
Secretary for Preparedness and Response; Biomedical Advanced
Research and Development Authority (BARDA) under Contract No.
75A50120C00138
- Submitted an EUA application to the FDA for the DPP SARS-CoV-2
IgM/IgG test system
- Received FDA Pre-Market Approval (PMA) for the DPP HIV-Syphilis
System, the first rapid test approved in the U.S. to aid in
diagnosis of both HIV and Syphilis from single patient sample
“Over the past months we have executed our COVID-19 product
development and regulatory strategy ahead of our expectations. The
potential launch of antigen and antibody test systems that leverage
the DPP platform will provide much needed and expanded access to
decentralized COVID-19 testing amid the resurgance of cases across
the U.S. Running both types of tests on the same Micro Reader
analyzer will enable clinicians to address the needs of a broader
patient population throughout all phases of the pandemic,” said
Richard Eberly, Chembio’s President and Chief Executive Officer.
“Our third quarter results demonstrate improvement in total
revenues, which include revenue from DPP COVID-19 IgM/IgG systems
shipped outside the U.S. in the second quarter.”
“We have significantly expanded our U.S commercial team with
experienced industry professionals and are continuing to do so. We
are also actively launching the DPP HIV-Syphilis System,” Mr.
Eberly continued. “Looking forward, we are excited about Chembio’s
future, serving multiple end markets that combined represent the
most significant opportunity in the company’s history.”
Third Quarter 2020 Financial ResultsTotal
revenue for the third quarter of 2020 was $10.3 million, an
increase of 6% compared to the prior year period. Net product sales
for the third quarter of 2020 were $8.4 million, a decrease of 1%
compared to the prior year period. License and royalty revenue and
R&D and grant revenue for the third quarter of 2020 totaled
$1.9 million, an increase of 54% compared to the prior year
period.
Gross product margin for the third quarter of 2020 was $0.9
million, compared to $1.9 million for the prior year period. Gross
product margin percentage for the third quarter of 2020 was 11.2%,
compared to 21.9% for the prior year period. Gross product margin
in the third quarter of 2020 was impacted by a high concentration
of sales outside the U.S. where average selling prices are lower,
and operational inefficiencies, including those triggered by the
recall of products starting at the end of the second quarter of
2020 together with activities related to qualifying automated
manufacturing lines.
Research and development expenses increased by $0.1 million, or
6%, in the third quarter of 2020 compared to the prior year period.
Selling, general and administrative expenses increased by $0.9
million, or 20%, in the third quarter of 2020 compared to the prior
year period.
Net loss for the third quarter of 2020 was $5.5 million, or
$0.28 per diluted share, compared to a net loss of $3.8 million, or
$0.22 per diluted share, for the prior year period.
Cash and cash equivalents as of September 30, 2020 totaled $28.7
million.
Conference CallChembio will host a conference
call today beginning at 4:30 pm ET to discuss its financial results
and recent business highlights. Investors interested in listening
to the call may do so by dialing 844-602-0380 from the United
States or 862-298-0970 from outside the United States. To listen to
a live webcast of the call, please visit the Investor Relations
section of Chembio's website at www.chembio.com. Following the
call, a replay will be available on the Investor Relations section
of Chembio’s website for 90 days. A telephone replay will be
available until 4:30 pm ET on November 19, 2020 by dialing
877-481-4010 from the United States or 919-882-2331 from outside
the United States and using the conference ID: 38202.
About the DPP Rapid Test
PlatformChembio’s proprietary DPP technology platform
provides high-quality, rapid diagnostic results in 15 to 20 minutes
using a small drop of blood from the fingertip or alternative
samples. Through advanced multiplexing, the DPP platform can detect
up to eight, distinct test results from a single patient sample,
delivering greater clinical value than other rapid tests. For
certain applications, Chembio’s easy-to-use, highly portable,
battery-operated DPP Micro Reader optical analyzer then reports
accurate results in approximately 15 seconds, making it well-suited
for decentralized testing where real-time results enable patients
to be clinically assessed while they are still on-site. Objective
results produced by the DPP Micro Reader reduce the possibility of
the types of human error that can be experienced in the visual
interpretations required by many rapid tests.
Chembio’s portfolio of DPP-based point-of-care
tests with FDA regulatory approvals include the DPP HIV-Syphilis
System (PMA approved), DPP HIV 1/2 Assay (PMA approved and CLIA
waived), DPP Zika IgM System (510(k)), and DPP Ebola Antigen System
(EUA). Additionally, DPP-based tests have received regulatory
approvals from the World Health Organization, CE-Mark, Agência
Nacional de Vigilância Sanitária (ANVISA), and other global
organizations, where they aid in the detection and diagnosis of
several other critical diseases and conditions.
All DPP tests are developed and manufactured in the
United States and are the subject of a range of domestic and global
patents and patents pending.
About Chembio DiagnosticsChembio
is a leading point-of-care diagnostics company focused on detecting
and diagnosing infectious diseases, including COVID-19, sexually
transmitted disease, and fever and tropical disease. Coupled with
Chembio’s extensive scientific expertise, its novel DPP technology
offers broad market applications beyond infectious disease.
Chembio’s products are sold globally, directly and through
distributors, to hospitals and clinics, physician offices, clinical
laboratories, public health organizations, government agencies, and
consumers. Learn more at www.chembio.com.
Forward-Looking StatementsCertain statements
contained in the first paragraph following the bulleted items under
“Recent Accomplishments & Highlights: above are not historical
facts and may be forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding the intent,
belief or current expectations with respect to the availability and
functionality of COVID-19 tests. Such statements, which are
expectations only, reflect management's current views, are based on
certain assumptions, and involve risks and uncertainties. Actual
results, events or performance may differ materially from
forward-looking statements due to a number of important factors,
and will be dependent upon a variety of factors, including, but not
limited to, the following, any of which could be exacerbated even
further by the continuing COVID-19 outbreak in the United States
and globally: the ability of Chembio to maintain existing, and
timely obtain additional, regulatory approvals, particularly for
its proposed DPP COVID-19 diagnostic tests; Chembio’s dependence
upon, and limited experience with, COVID-19 diagnostic tests; the
highly competitive and rapidly developing market for testing
solutions for COVID-19, which includes a number of competing
companies with strong relationships with current and potential
customers, including governmental authorities, and with
significantly greater financial and other resources that are
available to Chembio; and the risks of doing business with foreign
governmental entities, including geopolitical, international and
other challenges as well as potential material adverse effects of
tariffs and other changes in U.S. trade policy. Chembio undertakes
no obligation to publicly update forward-looking statements in this
release to reflect events or circumstances that occur after the
date hereof or to reflect any change in Chembio's expectations with
regard to the forward-looking statements or the occurrence of
unanticipated events. Factors that may impact Chembio's success are
more fully disclosed in Chembio's public filings with the U.S.
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the fiscal year ended December 31, 2019 and its
subsequent Quarterly Reports on Form 10-Q, particularly under the
heading “Risk Factors.”
DPP is Chembio’s registered trademark. For convenience, this
trademark appears in this release without ® symbols, but that
practice does not mean that Chembio will not assert, to the fullest
extent under applicable law, its rights to the trademark.
Investor Relations ContactPhilip
TaylorGilmartin Group(415) 937-5406investor@chembio.com
CHEMBIO DIAGNOSTICS, INC.
AND SUBSIDIARIESCONDENSED CONSOLIDATED
STATEMENTS OF
OPERATIONS(Unaudited) |
|
|
|
|
|
|
|
|
|
For the three months ended |
|
For the nine months ended |
|
September 30, 2020 |
|
September 30, 2019 |
|
September 30, 2020 |
|
September 30, 2019 |
REVENUES: |
|
|
|
|
|
|
|
Net product sales |
$ |
8,406,457 |
|
|
$ |
8,510,629 |
|
|
$ |
17,914,623 |
|
|
$ |
23,381,906 |
|
R&D and grant revenue |
|
1,654,500 |
|
|
|
971,980 |
|
|
|
3,756,161 |
|
|
|
3,528,033 |
|
License and royalty
revenue |
|
211,521 |
|
|
|
238,330 |
|
|
|
572,450 |
|
|
|
703,352 |
|
TOTAL
REVENUES |
|
10,272,478 |
|
|
|
9,720,939 |
|
|
|
22,243,234 |
|
|
|
27,613,291 |
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
Cost of product sales |
|
7,467,746 |
|
|
|
6,649,114 |
|
|
|
17,512,925 |
|
|
|
18,112,676 |
|
Research and development
expenses |
|
2,351,880 |
|
|
|
2,223,939 |
|
|
|
6,233,040 |
|
|
|
6,542,591 |
|
Selling, general and
administrative expenses |
|
5,348,958 |
|
|
|
4,455,588 |
|
|
|
13,903,192 |
|
|
|
12,565,601 |
|
Severance, restructuring and
other related costs |
|
11,651 |
|
|
|
- |
|
|
|
1,122,310 |
|
|
|
- |
|
Acquisition Costs |
|
- |
|
|
|
- |
|
|
|
63,497 |
|
|
|
395,612 |
|
|
|
15,180,235 |
|
|
|
13,328,641 |
|
|
|
38,834,964 |
|
|
|
37,616,480 |
|
LOSS FROM
OPERATIONS |
|
(4,907,757 |
) |
|
|
(3,607,702 |
) |
|
|
(16,591,730 |
) |
|
|
(10,003,189 |
) |
|
|
|
|
|
|
|
|
OTHER
INCOME: |
|
|
|
|
|
|
|
Interest Expense, net |
|
(735,819 |
) |
|
|
(195,970 |
) |
|
|
(2,110,011 |
) |
|
|
(183,368 |
) |
|
|
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES |
|
(5,643,576 |
) |
|
|
(3,803,672 |
) |
|
|
(18,701,741 |
) |
|
|
(10,186,557 |
) |
|
|
|
|
|
|
|
|
Income tax benefit |
|
104,778 |
|
|
|
20,667 |
|
|
|
319,597 |
|
|
|
400,339 |
|
|
|
|
|
|
|
|
|
NET LOSS |
$ |
(5,538,798 |
) |
|
$ |
(3,783,005 |
) |
|
$ |
(18,382,144 |
) |
|
$ |
(9,786,218 |
) |
|
|
|
|
|
|
|
|
Basic and diluted loss
per share |
$ |
(0.28 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.98 |
) |
|
$ |
(0.58 |
) |
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding, basic
and diluted |
|
20,104,547 |
|
|
|
16,923,695 |
|
|
|
18,728,372 |
|
|
|
16,912,583 |
|
|
CHEMBIO DIAGNOSTICS, INC.
AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
AS OF |
|
|
|
|
|
(Unaudited) |
|
|
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
- ASSETS - |
|
|
|
CURRENT
ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
28,687,453 |
|
|
$ |
18,271,352 |
|
Accounts receivable, net of
allowance for doubtful accounts of $276,210 and $62,000 as of
September 30, 2020 and December 31, 2019, respectively |
|
3,522,498 |
|
|
|
3,661,325 |
|
Inventories, net |
|
12,363,486 |
|
|
|
9,598,030 |
|
Prepaid expenses and other
current assets |
|
1,007,473 |
|
|
|
693,013 |
|
TOTAL CURRENT
ASSETS |
|
45,580,910 |
|
|
|
32,223,720 |
|
|
|
|
|
FIXED
ASSETS: |
|
|
|
Property, Plant and Equipment,
net |
|
8,033,112 |
|
|
|
5,933,569 |
|
Finance lease right-of-use
asset, net |
|
248,892 |
|
|
|
210,350 |
|
TOTAL FIXED ASSETS,
net |
|
8,282,004 |
|
|
|
6,143,919 |
|
|
|
|
|
OTHER
ASSETS: |
|
|
|
Operating lease right-of-use
assets, net |
|
6,316,221 |
|
|
|
7,030,744 |
|
Intangible assets, net |
|
3,648,495 |
|
|
|
3,914,352 |
|
Goodwill |
|
5,696,679 |
|
|
|
5,872,690 |
|
Deposits and other assets |
|
462,664 |
|
|
|
543,539 |
|
|
|
|
|
TOTAL
ASSETS |
$ |
69,986,973 |
|
|
$ |
55,728,964 |
|
|
|
|
|
- LIABILITIES AND STOCKHOLDERS’ EQUITY - |
|
|
|
CURRENT
LIABILITIES: |
|
|
|
Accounts payable and accrued
liabilities |
$ |
6,558,782 |
|
|
$ |
5,526,243 |
|
Deferred revenue |
|
3,865,754 |
|
|
|
125,000 |
|
Finance lease liabilities |
|
57,715 |
|
|
|
41,894 |
|
Operating lease
liabilities |
|
710,535 |
|
|
|
568,294 |
|
Note payable |
|
- |
|
|
|
180,249 |
|
TOTAL CURRENT
LIABILITIES |
|
11,192,786 |
|
|
|
6,441,680 |
|
|
|
|
|
OTHER
LIABILITIES: |
|
|
|
Long-term operating lease
liabilities |
|
6,448,515 |
|
|
|
6,969,603 |
|
Long-term finance lease
liabilities |
|
200,397 |
|
|
|
171,953 |
|
Long-term debt, less current
portion, net |
|
18,040,427 |
|
|
|
17,644,149 |
|
Deferred tax liability |
|
165,326 |
|
|
|
466,326 |
|
TOTAL
LIABILITIES |
|
36,047,451 |
|
|
|
25,252,031 |
|
|
|
|
|
STOCKHOLDERS’
EQUITY: |
|
|
|
Preferred stock – 10,000,000
shares authorized, none outstanding |
|
- |
|
|
|
- |
|
Common stock - $0.01 par
value; 100,000,000 shares authorized; 20,213,956 shares and
17,733,617 shares issued at September 30, 2020 and December 31,
2019, respectively |
|
202,139 |
|
|
|
177,335 |
|
Additional paid-in
capital |
|
124,622,252 |
|
|
|
95,433,077 |
|
Accumulated deficit |
|
(89,967,147 |
) |
|
|
(71,585,003 |
) |
Treasury stock 33,290 and 0
shares at cost as of September 30, 2020 and December 31, 2019,
respectively |
|
(150,919 |
) |
|
|
- |
|
Accumulated other
comprehensive (loss) income |
|
(766,803 |
) |
|
|
9,844 |
|
TOTAL STOCKHOLDERS’
EQUITY |
|
33,939,522 |
|
|
|
24,035,253 |
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
69,986,973 |
|
|
$ |
55,728,964 |
|
|
CHEMBIO DIAGNOSTICS, INC.
AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
For the nine months ended |
|
September 30, 2020 |
|
September 30, 2019 |
|
|
|
|
Net cash used in operating
activities |
$ |
(14,146,887 |
) |
|
$ |
(6,398,207 |
) |
Net cash used in
investing activities |
|
(3,182,180 |
) |
|
|
(2,769,147 |
) |
Net cash provided by
financing activities |
|
27,870,382 |
|
|
|
18,517,604 |
|
Effect of exchange
rate changes on cash |
|
(125,214 |
) |
|
|
(6,909 |
) |
INCREASE IN CASH AND
CASH EQUIVALENTS |
|
10,416,101 |
|
|
|
9,343,341 |
|
Cash and cash equivalents -
beginning of the period |
|
18,271,352 |
|
|
|
12,524,551 |
|
Cash and cash
equivalents - end of the period |
$ |
28,687,453 |
|
|
$ |
21,867,892 |
|
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