Developer of rapid health information technologies, Akers Biosciences, Inc. (NASDAQ:AKER), releases reports of its third quarter earnings, ending September 30th, 2016.
THOROFARE, NJ–(Marketwired – Nov 14, 2016) – Akers Biosciences, Inc. ( NASDAQ : AKER ) ( AIM : AKR ), (“Akers Bio” or the “Company”), a developer of rapid health information technologies, reports its financial results for the third quarter ended September 30, 2016.
Q3 Financial Highlights:
Total Revenue — all from product sales — up 262% to $613,198 (Q3 2015: $169,473)
Sales of flagship PIFA Heparin/PF4 Rapid Assay products up 341% to $514,839 (Q3 2015: $116,783) — entirely from US-based customers
Significant improvement in gross margin to 61% (Q3 2015: (5)%) as a result of higher selling prices, improved volumes and different component mix on core products
Gross profit of $376,498 (Q3 2015: $(8,479))
Major reductions in costs in all key areas of the business: General and Administrative costs (27)%, Sales and Marketing costs (28)%, Research and Development costs (23)%
Profit before tax in the quarter of $310,155 (Q3 2015: $(2,326,893)) following the reversal of an allowance for bad debts of $1,299,609
Loss before income tax (excluding the reversal of bad debt allowance) more than halved to $(989,454) (Q3 2015: $(2,326,893))
Cash and marketable securities at September 30, 2016 of $795,802 (December 31, 2015: $4,472,163)
The Company believes that Q4 will continue to show growth with continuing improvements in domestic product sales, the remaining $2,000,000 due under the Novotek order for PIFA Heparin/PF4 Rapid Assay products in China and growing interest in a number of Akers Wellness products
Q3 Operational Highlights
Experienced strong growth from flagship PIFA Heparin/PF4 Rapid Assay product sales without any contribution from China in Q3 2016
Revenues from breath test product sales improved by 256% derived from alcohol breathalyzer sales and initial stocking orders for BreathScan OxiCheck™
Completed highly successful clinical study on BreathScan OxiCheck™ — the first disposable breath test to rapidly determine levels of oxidative stress in the body. Demonstrated 99.5% correlation with standard blood testing method. Initial stocking orders placed during the period
Commentary from Raymond F. Akers, Jr. PhD, Co-founder and Chief Scientific Director and John J. Gormally, Chief Executive Officer:
Sales of the Company’s flagship rapid test for heparin-induced thrombocytopenia (HIT) are continuing on an upward trajectory. The Company recorded an increase in sales of this product of 341% compared to the same period in 2015 — this is as a result of both the implementation of a significant price increase for the product line and higher customer demand. Given previous evidence of lower stock depletion during the summer months — as a result of fewer surgeries — and therefore lighter demand for this product during the third quarter, we are particularly encouraged by this year’s third quarter sales which lead us to believe the fourth quarter may be even stronger.
Importantly, these robust revenues for PIFA Heparin/PF4 Rapid Assay products in the third quarter were entirely derived from domestic sales and did not benefit from any contribution from China. The Company has product shipments scheduled for China in the fourth quarter which are expected to result in the receipt of the remaining $2,000,000 of payments under the $2,500,000 order placed by the Company’s Chinese distributor, Novotek, earlier in the year. We believe that this, coupled with the continuing momentum in domestic sales for this product, is an encouraging sign for the potential of a strong fourth quarter.
Akers Bio is not merely making progress with its flagship rapid HIT test, but also with other commercialized products. Sales of our breath-based rapid assays improved in the third quarter by 256% as demand slowly returns for the Company’s rapid alcohol breathalyzer and, more significantly, initial stocking orders were placed for BreathScan OxiCheck™ (“OxiChek™”), the first disposable breath test to rapidly determine levels of oxidative stress in the body — an indicator of the overall health and wellbeing of a person. This follows our appointment, in June, of Aero-Med as the distributor for this product targeting the large specific markets in the United States of anti-aging, functional and integrative health and wellness treatment practitioners.
The Company’s marketing efforts for OxiChek™ were given a boost in August following the completion of a clinical study which demonstrated a correlation between OxiChek™ and the standard reference laboratory blood testing method of 99.5%.
OxiChek™ is a general wellness product from Akers Wellness™, intended to measure indicators of oxidative stress in exhaled breath. Unlike current laboratory testing methods that test only a few free radicals using an invasive blood draw — and have a turnaround time of 7 to 10 days — Akers Bio’s rapid OxiChek™ test detects a broad spectrum of free radicals contained in a person’s exhaled breath in just a few minutes.
Not only did this clinical study demonstrate the effectiveness of our test for oxidative stress, but the comparison to the standard reference laboratory test — blood vs breath — was remarkable. We believe that we have a powerful tool for the expansive health and wellness and anti-aging industry and are delighted to be seeing initial stocking orders from paying customers.
At the same time as growing revenues, Akers Bio is also shrinking costs. The evidence of this in the third quarter is very clear. The Company recorded reductions in all key areas of cost. General and Administrative expenses were reduced by 27% in the quarter as a result of lower legal and other professional service costs; Sales and Marketing expenses were reduced by 28% in the quarter as a result of a reduction in the number of sales and marketing staff from 11 to 5 as of September 30, 2016 as our new sales model requires fewer – but more senior – sales personnel; and Research and Development expenses were reduced by 23% in the quarter principally as a result of lower professional service costs.
Akers Bio moves into the final quarter of 2016 with excellent momentum in domestic sales of our flagship rapid test for HIT and with the remaining $2,000,000 due under the Novotek order for products in China which we expect to be fulfilled in the fourth quarter. There is also evidence of further demand for Akers Wellness™ products which are expected to produce additional sales in the remaining months of the year. The combination of these growing product sales and a leaner cost base is expected to enable Akers Bio to trade profitably both in the final quarter and, more significantly, in 2017.
Conference call information:
Monday, November 14, 2016 at 9:00 a.m. Eastern Time
Conference ID: 4526875
About Akers Biosciences, Inc.
Akers Bio develops, manufactures, and supplies rapid screening and testing products designed to deliver quicker and more cost-effective healthcare information to healthcare providers and consumers. The Company has advanced the science of diagnostics while responding to major shifts in healthcare through the development of several proprietary platform technologies. The Company’s state-of-the-art rapid diagnostic assays can be performed virtually anywhere in minutes when time is of the essence. The Company has aligned with major healthcare companies and high volume medical product distributors to maximize product offerings, and to be a major worldwide competitor in diagnostics.
Akers Biosciences, Inc. (NASDAQ:AKER) shares are trading -23.500% on the news and in the range of $2.250 – 3.045 during the current trading session. When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock. Sell-side research firms on Wall Street currently have a consensus one-year price target of $11.000 on the stock. This is according to brokerage analysts polled by Thomson Reuters First Call.
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Sell-side analysts are projecting earnings per share of $0.000 for the next fiscal quarter. For the current year, analysts are predicting earnings of $-1.240 per share according to First Call.
In looking at where the stock is trading on a technical level, the stock is trading -29.807% away from its 50-day moving average of $3.270. Based on the most recent available data, the equity is -37.973% off of its 52-week high of $3.700 and +112.500% away from its 52-week low which is $1.080.
Today, the stock opened at $3.000 and the last bid at the time of writing stood at $2.295. During the session thus far, the equity dipped down to $2.250 and touched $3.045 as the high point. Akers Biosciences, Inc. (NASDAQ:AKER) has a market cap of $12.51M and has seen an average daily volume of 23,574 over the past three months.
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