Management of specialty cancer diagnostics company Precipio,
Inc. (NASDAQ: PRPO) shares thoughts and reflections looking
back at 2023, and forward to 2024.
At the start of 2023,
management set three goals, all focused on achieving cash flow
breakeven going forward:
- Target #1: For the pathology
division, reaching estimated annualized revenues of $14M, which was
expected to enable the division to achieve cash flow breakeven
based on its cost structure.
- Target #2: For the products
division, reaching estimated annualized revenues of $8M, which was
expected to enable the division, and therefore the entire company,
to achieve cash flow breakeven based on the company cost structure
at the time.
- Target #3: Maintaining or improving
the company’s cost structure, to ensure that Target #1 and Target
#2 do not have to be increased.
On our last
shareholders call on November 20, 2023, management announced that
the company had achieved two of its three goals: it achieved Target
#1, surpassing $3.75M in pathology division revenues in Q3
(equivalent to estimated annualized revenues of $14M); it also
exceeded Target #3 through substantial cost reduction initiatives,
resulting in a significant reduction in the company’s cash burn
from $2.5M/quarter in Q3-2022, to $1M/quarter in Q3-2023.
As a direct outcome of
achieving Target #1 and #3, the company’s Target #2 for the
products division to enable the division, and therefore the entire
company to achieve cash flow breakeven based on the current cost
structure - is $6M instead of $8M. As disclosed in our recent 10Q
filing for Q3-2023, the company reached ~$0.85M in product revenue
for the third quarter.
In Q3-2023 the company
reported $4.5M in quarterly revenues for the pathology and products
divisions, a 50% YoY increase to approximately $18.5M in annualized
run-rate revenues. In 2024, if the company achieves a growth rate
of ~50% and maintains the current cost structure, the company could
reach ~$30M in annual run-rate revenue, which would likely result
in positive cash flow during the second half of 2024. Management
hopes that the market will reward such performance with a higher
revenue multiple than the current 0.5x revenue multiple implied in
the company market cap and share price.
We would like to
remind shareholders to expect more quarter-to-quarter volatility in
pathology division revenue than in product division revenue. The
pathology division revenues are more prone to fluctuations because
they are driven by individual physician behaviors, patient testing
frequency, and unique testing orders for their patient testing, as
opposed to laboratories using our products that have relatively
consistent testing volumes.
In addition, in the
products division, we are focusing on larger accounts to maximize
our selling effectiveness, and therefore, sales growth in that
division is likely to come in spurts rather than slow steady
increases as might be more likely to occur in the pathology
division. Therefore, we are more focused on meeting our product
division goals. We expect Q4-2023 revenues to be approximately
$3.2-$3.5M, and end 2023 with estimated revenues for the year of
approximately $14.5M, an increase of approximately 50% from $9.8M
year-end revenues of 2022.
“In 2023 we set
aggressive goals, and as of Q3, we have met two of the three goals.
In doing so, we have significantly altered the company’s cost
structure. The team’s primary focus is on reaching and exceeding
the product division revenue goals, and getting the company to
breakeven as quickly as possible,” said Ilan Danieli, CEO.
“Furthermore, as we continue to grow our share of this $400M+
HemeScreen market, and disrupt the diagnostic market by bringing
these (and other) tests to the point-of-care, we believe we are
facing a huge opportunity to build a significant business.”
About Precipio
Precipio has built a platform designed to
eradicate the problem of misdiagnosis by harnessing the intellect,
expertise and technology developed within academic institutions and
delivering quality diagnostic information to physicians and their
patients worldwide, as well as proprietary products that serve
laboratories worldwide. Through its collaborations with world-class
academic institutions specializing in cancer research, diagnostics
and treatment, Precipio offers a new standard of diagnostic
accuracy enabling the highest level of patient care. For more
information, please visit www.precipiodx.com.
Please follow us on LinkedIn, Twitter
@PrecipioDx and on Facebook.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including, without
limitation, statements regarding the targets set herein and related
timing.
Except for historical information, statements
about future volumes, sales, growth, costs, cost savings, margins,
earnings, earnings per share, diluted earnings per share, cash
flows, plans, objectives, expectations, growth or profitability are
forward-looking statements based on management’s estimates,
beliefs, assumptions and projections. Words such as “could,” “may,”
“expects,” “anticipates,” “will,” “targets,” “goals,” “projects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,”
and variations on such words, and similar expressions that reflect
our current views with respect to future events and operational,
economic and financial performance, are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions based on management’s current expectations. These
statements are neither promises nor guarantees, but involve known
and unknown risks, uncertainties and other important factors that
may cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements, including, but not limited to, the important factors
discussed under the caption “Risk Factors” in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2022, Quarterly
Report on Form 10-Q for the three months ended September 30, 2023,
and our other reports filed with the U.S. Securities and Exchange
Commission. Any such forward-looking statements represent
management’s estimates as of the date of this press release only.
While we may elect to update such forward-looking statements at
some point in the future, except as required by law, we disclaim
any obligation to do so, even if subsequent events cause our views
to change. These forward-looking statements should not be relied
upon as representing our views as of any date subsequent to the
date of this press release.
Inquiries:
investors@precipiodx.com
+1-203-787-7888 Ext. 523
Grafico Azioni Precipio (NASDAQ:PRPO)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni Precipio (NASDAQ:PRPO)
Storico
Da Mag 2023 a Mag 2024