Nanosphere Announces Record First Quarter Revenues and Strengthens Balance Sheet With $27 Million Debt and Equity Financing

Nanosphere Announces Record First Quarter Revenues and Strengthens Balance 
Sheet With $27 Million Debt and Equity Financing 
NORTHBROOK, IL -- (Marketwired) -- 05/08/13 --  Nanosphere, Inc.
(NASDAQ: NSPH) 


 
--  Q1 2013 revenues were $2.4 million, an 82% increase over Q1 2012
--  2013 guidance re-affirmed at $13 million to $15 million in revenue and
    200 to 250 customer placements
--  $27 million of new capital from $22 million debt facility and $5
    million stock sale
--  William Blair Small Cap Growth Fund to purchase the $5 million of
    common shares through underwritten registered offering

  
Nanosphere, a leader in the development and commercialization of
advanced molecular diagnostics systems, today reported financial
results for the first quarter ended March 31, 2013. In addition, the
Company announced that it secured $27 million in new capital. 
Michael McGarrity, Chief Executive Officer of Nanosphere, stated, "We
are pleased to see our growing customer base confirm the value of our
gram positive blood culture test. We are extending our lead in
molecular-based infectious disease testing through sustained growth
in the number of customers utilizing our gram positive test and
continued development of our strong menu pipeline, including our gram
negative and enteric assays." 
Operational Results 
First quarter revenue was $2.4 million compared to $1.3 million in
the first quarter of 2012 and $1.6 million in the fourth quarter of
2012. The 82% year-over-year growth was driven primarily by
consumable sales that increased by 123%. Nanosphere re-affirms full
year 2013 revenue guidance of $13 million to $15 million. 
Placements in the first quarter of 2013 were 46 and full year 2013
guidance of 200-250 is also re-affirmed. 
Costs of product sales increased to $1.5 million in the first quarter
of 2013 from $0.9 million in the first quarter of 2012 due to
increased volume. Gross margins increased to 35% in the first quarter
of 2013 from 30% in the first quarter of 2012 driven by lower per
unit cartridge manufacturing costs attributable to both volume and
production cost reduction efforts.  
Selling, general and administrative expenses in the first quarter of
2013 increased to $5.3 million from $4.0 million in the first quarter
of 2012 due to field sales and customer support team expansion,
accrued severance expenses and clinical trial expenses supporting the
Company's expanding pipeline. 
Research and development expenses in the first quarter of 2013
decreased to $4.1 million from $4.4 million in the same period of
2012. The decrease was driven by reductions in assay development
materials spending and equipment depreciation. 
Net loss for the first quarter of 2013 was $8.5 million, compared
with $8.1 million in first quarter of 2012. 
Cash flow for the first quarter of 2013 was negative $8.8 million.
Cash at March 31, 2013 was $24.3 million. Pro forma cash as of March
31, 2013 including the first tranche of the loan agreement and the
sale of common stock is $40.8 million. The pro forma March 31, 2013
cash balance of $40.8 million is derived by adding the $11.8 million
in net proceeds from the first tranche of the May 6, 2013 debt
facility and $4.7 in net proceeds from the May 8, 2013 underwritten
registered offering to the reported March 31, 2013 cash balance of
$24.3 million. 
Financing 
Nanosphere has secured $27 million in financing through a $22 million
term loan agreement with Oxford Finance LLC and Silicon Valley Bank
and a sale of $5 million of common stock to William Blair Small Cap
Growth Fund through an underwritten registered offering. Proceeds
from the loan and stock sale will be used for general corporate
purposes including funding of working capital to support Nanosphere's
commercial scale-up. 
The term loan includes an initial gross tranche of $12 million to be
drawn immediately and a second tranche of $10 million that can be
drawn between December of 2013 and April of 2014 if certain
conditions are met. 
Nanosphere also raised $5 million through the sale of 1,923,077
shares in an underwritten registered offering at a price of $2.60 per
share that are to be purchased by William Blair Small Cap Growth
Fund. The offering is expected to close on or about May 13, 2013,
subject to satisfaction of customary closing conditions. The offering
was made pursuant to a prospectus supplement to the Company's base
prospectus, dated May 8, 2013, filed as part of the Company's
effective $100 million shelf registration statement. 
The prospectus supplement relating to the offering will be filed with
the SEC and can be obtained through the website of the SEC at
www.sec.gov. This press release does not constitute an offer to sell
or a solicitation of an offer to buy the securities in this offering,
nor shall there be any sale of these securities in any state or other
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such state or other jurisdiction.  
Conference Call Details 
Wednesday, May 8, 2013 at 11:00 A.M., Eastern Time
 Domestic:
888-680-0879
 International: 617-213-4856
 Passcode: 30587177 
Webcast: http://www.nanosphere.us/page/investor-overview 
Replay: Through May 15, 2013 on the Company's website or by dialing: 
Domestic: 888-286-8010
 International: 617-801-6888
 Passcode:
15031674 
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. Additional information is available at
http://www.nanosphere.us. 
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 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                          
          (dollars and shares in thousands except per share data)           
                                (Unaudited)                       
          
                                                                            
                                                  Three Month Periods Ended 
                                                          March 31,         
                                                 -------------------------- 
                                                     2013          2012     
                                                 ------------  ------------ 
                                                                            
                                                                            
REVENUE:                                                                    
  Product sales                                  $      2,369  $      1,286 
  Grant and contract revenue                               --            13 
                                                 ------------  ------------ 
    Total revenue                                       2,369         1,299 
COSTS AND EXPENSES:                                                         
  Cost of sales                                         1,537           913 
  Research and development                              4,062         4,435 
  Sales, general, and administrative                    5,309         4,025 
                                                 ------------  ------------ 
    Total costs and expenses                           10,908         9,373 
                                                 ------------  ------------ 
    Loss from operations                               (8,539)       (8,074)
OTHER INCOME (EXPENSE):                                                     
  Foreign exchange gain (loss)                             (2)           (1)
  Interest income                                           7            14 
                                                 ------------  ------------ 
    Total other income (expense)                            5            13 
                                                 ------------  ------------ 
NET LOSS                                         $     (8,534) $     (8,061)
                                                 ============  ============ 
                                                                            
Net loss per common share -- basic and diluted   $      (0.15) $      (0.18)
Weighted average number of common shares                                    
 outstanding -- basic and diluted                      55,802        43,716 
                                                                            
                                                                            
                              Nanosphere, Inc.                              
                          Condensed Balance Sheets                          
                           (dollars in thousands)                           
                                 (Unaudited)                                
                                                                            
                                                     March 31,  December 31,
                                                       2013         2012    
                                                   ------------ ------------
                                                                            
                                                                            
Cash and cash equivalents                          $     24,315 $     33,139
Other current assets                                     10,361        8,637
                                                   ------------ ------------
Total current assets                                     34,676       41,776
Net property and equipment                                3,096        2,872
Intangible assets - net of accumulated                                      
 amortization                                             2,652        2,733
Other assets                                                 75           76
                                                   ------------ ------------
Total assets                                       $     40,499 $     47,457
                                                   ============ ============
                                                                            
Total liabilities                                  $      6,402 $      5,225
Total stockholders' equity                               34,097       42,232
                                                   ------------ ------------
Total liabilities and stockholders' equity         $     40,499 $     47,457
                                                   ============ ============

  
Contact:
Nanosphere, Inc.
Roger Moody
847-400-9021
Chief Financial Officer
rmoody@nanosphere.us 
or 
LifeSci Advisors
Michael Rice
646-597-6979
Founding Partner
mrice@lifesciadvisors.com 
 
 
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