Strong Pipeline Progress and Commercialization Priorities for Newly Authorized Products
London, UK (August 18, 2022), LumiraDx Limited (Nasdaq: LMDX), a next-generation point of care (POC) diagnostics company, today announced operational and financial results for the second quarter ended June 30, 2022.
“We have made significant progress on expanding our portfolio of newly authorized products and have exciting commercialization priorities,” said LumiraDx Chairman and CEO Ron Zwanziger. “We are moving to commercialize our product portfolio in Europe and other international markets while actively working on U.S. submissions and preparing clinical trials this fall. We believe that we have a compelling value proposition with products designed to disrupt the point of care market and enable customers to consolidate three to six different instruments they are currently using into a single LumiraDx Platform. With lab comparable results in minutes for diabetes, heart failure, and coagulation disorders, we see an opportunity to do more testing in emergency rooms and primary care offices. We’re also accelerating the development of our Troponin and molecular assays on the Platform. We are confident these actions and strategic priorities for the next 12 to 18 months will bridge us toward key revenue milestones and support our strategy to transform community-based care.”
2022 Second Quarter Financial Highlights
For the three months ended June 30, 2022, LumiraDx delivered revenue of $44.7 million compared to $87.2 million for the second quarter of 2021. Test strips on the LumiraDx Platform contributed revenues of $28 million and Fast Lab Solutions’ molecular reagents delivered $10 million, substantially all from COVID-19 products.
Revenues declined from the early months of this year at the height of the Omicron surge as COVID-19 moves from pandemic to endemic stage. At the same time, LumiraDx’s products continue to be recognized by customers for their significant performance and cost advantages over competing products. In response to lower COVID testing activity and to ensure efficient use of cash, the company initiated a global restructuring plan to resize the organization to the current requirements to meet market needs and to reduce costs. The company is targeting cost reductions to avoid impacts on pipeline delivery on its test menu for common health conditions to drive near-term revenue growth.
Total gross margins for the second quarter of 2022 were 11% compared to 17% for the same period last year. The decline is primarily due to under-absorbed manufacturing capacity costs as the company transitions from a higher cost base and resizes operations to deliver in a more stable post-pandemic market environment.
Research and development expenses were $47.5 million in the second quarter of 2022. Our non-IFRS R&D expenses increased 33% from $33.9 million in second quarter of 2021 to $45.1 million this year, driven by a heightened rate of regulatory submissions and product development activities during the second quarter of 2022.
The company announced a restructuring program to reduce overall operating costs and deprioritizing certain R&D activities for earlier stage programs.
Second quarter 2022 sales, marketing and administrative expenses were $37.8 million. Adjusted non-IFRS sales, marketing and administrative expenses, excluding amortization and share-based payment expenses, were $30.8 million in the second quarter of 2022, compared to $22.4 million in the first quarter of 2021. Non-IFRS SG&A expenses declined approximately $3 million from the first quarter of 2022, and we anticipate further reductions as part of our restructuring program.
Operating loss for the second quarter of 2022 was $81 million. The non-IFRS operating loss for second quarter of 2022 was $71 million representing a $29 million higher loss compared with the $42 million loss in the same period last year.
Our cash balance at the end of the second quarter was $106 million compared to $132 million at the end of 2021. After the quarter close, LumiraDx completed an underwritten public offering and a concurrent private placement with the Bill & Melinda Gates Foundation that raised aggregate net proceeds, after underwriting costs, of approximately $100 million. The pro forma cash balance after the recent public offering and concurrent private placement would have been $206 million.
LumiraDx’s senior management team will host a conference call today at 8:00 AM ET to discuss the company’s financial results and business updates. Call in details and a link to view the webcast may be found at investors.lumiradx.com/news-and-events/investor-calendar. A replay of the webcast will be available on the Investor's section of the company's website at investors.lumiradx.com shortly after the conclusion of the call. The webcast will be archived for one year.
LumiraDx Limited (Nasdaq: LMDX) is next-generation point of care diagnostics company that is transforming community-based healthcare. Its actively controlled microfluidic technology provides fast, high performance and accessible diagnostic solutions wherever the patient is for nearly any testing scenario, creating unique testing options at the point of need.
The company offers a broad menu of lab comparable tests on a single portable Platform, with more than 30 assays on the market or in development, covering infectious diseases, cardiovascular diseases, diabetes, and coagulation disorders. The company also supports high-complexity laboratory testing in an accessible high-throughput format to leverage current molecular laboratory operations.
Founded in 2014 and based in the UK, LumiraDx's diagnostic testing solutions are being deployed globally by governments and leading healthcare institutions across laboratories, urgent care, physician offices, pharmacies, schools, and workplaces to screen, diagnose, and monitor wellness as well as disease.
More information on LumiraDx is available at www.lumiradx.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding the effectiveness of our strategy, regulatory progress and the advancement of our pipeline of tests, the timing and results of our clinical trials, the benefits and performance of our tests, our ability to reach key revenue milestones and the expected timing and outcome of our restructuring activities. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements, including, among others, general economic, political and business conditions; the effect of COVID-19 on LumiraDx's business and financial results; obtaining or maintaining regulatory approval, authorization or clearance for our tests; and those factors discussed under the header "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2021,which was filed with the Securities and Exchange Commission, or SEC on April 13, 2022, in our report on Form 6-K that was filed with the SEC on August 16, 2022, and in other filings that we make with the SEC. Although LumiraDx believes that it has a reasonable basis for each forward-looking statement contained in this press release, LumiraDx cautions you that these statements are based on a combination of facts and factors currently known by it and its projections of the future, about which it cannot be certain. LumiraDx undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise.
Non-IFRS Financial Measures
We present non-IFRS financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance, as we believe that these non-IFRS financial measures depict the true performance of the business by encompassing only relevant and controllable events, enabling us to evaluate and plan more effectively for the future. The non-IFRS financial measures may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under IFRS as issued by the IASB. Non-IFRS financial measures and margins are not measurements of our performance, financial condition or liquidity under IFRS as issued by the IASB and should not be considered as alternatives to operating loss, gross margin or net income (loss) or any other performance measures, derived in accordance with IFRS as issued by the IASB or any other generally accepted accounting principles.
We define non-IFRS operating loss and non-IFRS net income (loss) as operating loss and net income (loss), respectively, excluding amortization, share-based payments, IFRS 2 listing expense, change in fair value of financial instruments, foreign exchange (gain)/loss, dividends on preferred shares and non-cash interest. We define non-IFRS expenses as expenses excluding amortization and share-based payments. We recommend that you review the reconciliation of the non-IFRS measure to the most directly comparable IFRS financial measure provided in the financial statement tables included below, and that you not rely on any single financial measure to evaluate our business.
Supporting healthier lives, for individuals, communities and wider society.
Enabling responsive, personal relationships between patients and care teams.
Controlling and reducing costs to help ease pressure on healthcare budgets.