NxStage Medical (NSDQ:NXTM) shares jumped nearly 8% today after the medical device company reported Wall-Street-beating results for the 4th quarter and 2012.
The Lawrence, Mass.-based medical device company said it pared its 4th-quarter losses by nearly 50%, to $2.4 million or 4¢ per share, on sales of $65.0 million for the 3 months ended Dec. 31, 2012. That amounts to top-line growth of 14.0% compared with Q4 2011.
For the full year, NxStage posted losses of $14.6 million, or 26¢ per share, down 32.2% on sales of $242.1 million, up 11.5% compared with 2011.
The home hemodialysis company beat The Street’s consensus earnings forecast by a penny during both Q4 and 2012 and topped analysts’ sales prediction of $63.5 million.
NXTM shares surged on the news, opening up $3.2% at $11.20 apiece, peaking at $11.68 (up 7.6%) before subsiding to $11.38 as of about 11:30 a.m. today, up 4.9%.
"It always feels good to bring it in where you told people you would bring it in," founder & CEO Jeff Burbank told MassDevice.com today.
The drivers for NxStage’s sales margin improvement fall into 3 categories, Burbank told us: International integration, "aligning the programs around sales execution;" growing returns from its direct-to-consumer marketing push; and the effect of new products in increasing NxStage’s market share. CFO Robert Brown added that NxStage’s gross margin gains are partly due to good execution on its long-term plan to reach the 50% mark and partly from the advantages of scale.
NxStage used insights gleaned from pilot direct-to-consumer programs to design a concerted push "to increase awareness about the benefits of home hemodialysis (HHD) and advocate for reimbursement policy changes with the Centers for Medicare and Medicaid Services," the company said 2 weeks ago. Burbank told us that some of the target markets in the pilot program showed 25% increases in patient training rates.
"We’ve spent a lot of time building the infrastructure on how to communicate with patients, piloted a lot of different technologies to deal with the demand now that we’ve generated it," he said. "What’s really impactful is the increase in patient training rates, because it means they’re actually getting on the therapy. We want to expand that, now that we’ve seen those kind of results."
The company is evidently confident in its ability to achieve its goals for growth. NxStage said it expects to post revenues of between $60.5 million and $62.0 million during the 1st quarter, excluding the 1-time impact of its planned transition to direct sales in the UK. That move is anticipated to cost between $500,000 and $1 million, according to the company. Net losses are slated to be between $4.5 million and $5.5 million during Q1, or -8¢ to -9¢ per share.
Fiscal 2013 sales are pegged at $265 million to $270 million, with net losses of $13 million to $17 million (or -22¢ to -28¢ per share).
