Precipio Completes the Transaction with Poplar Healthcare’s Oncometrix Hematopathology Division
March 16 2020 - 9:30AM
Specialty diagnostics company Precipio, Inc. (NASDAQ: PRPO),
announced today that it has completed the non-cash transaction of
the transition of Oncometrix’s customer base, as discussed in
Precipio’s recent announcement.
As stated previously, the transaction with
Poplar involves no exchange of cash or equity in consideration,
providing non-dilutive impact to shareholders. Assuming a continued
successful implementation of the transition and no disproportionate
impact from COVID-19, management anticipates that the transaction
will impact revenue growth, gross margin and cash flow:
- Projected
Revenues more than Double. Combining Precipio’s current
run-rate revenues with Oncometrix’s 2019 revenues (both unaudited),
annualized Hemepath diagnostic business is expected to increase to
an estimated $6.0M. This represents more than 140% increase (or
2.4x) when compared to the Precipio-only 2019 unaudited pathology
services revenues of $2.5M.
- Projected Gross
Margin more than Doubles. Hemepath product line gross
margins are expected to improve from the current level of 16% to
34%. Furthermore we project incremental Hemepath business above
$6.0M to reach estimated margins of 50%. As a highly scalable,
volume-driven business, this will have a material impact on
Precipio’s gross profits, as minimal capital equipment expenditures
are required to process the increased volume.
- Projected Cash
Burn Reduced by more than $700K. While Precipio has
absorbed the three additional sales representatives from
Oncometrix, as well as several additional hires in laboratory
operations to handle the volume increase, it is anticipated that
the net cash impact due to this transaction will be an estimated
reduction of $700,000 in cash burn on an annualized basis.
“We are delighted to complete this transaction
and partner with Precipio for the hematopathology business,
enabling us to focus on our other core businesses”, said James
Sweeney, CEO of Poplar Healthcare. “We look forward to continued
collaboration with Precipio in other areas of our partnership”.
“While every absorption of a business is
challenging, this transaction is an exact fit with current Precipio
operations. I am confident in our team’s quick execution of this
strategic initiative, and believe it will have a substantial impact
on the company”, said Ilan Danieli, Precipio CEO. “We are excited
to work with the Oncometrix team and continue to provide their
customers and patients with outstanding quality and service. We too
look forward to a continued fruitful partnership with the Poplar
team”.
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. Through its collaborations with world-class
academic institutions specializing in cancer research, diagnostics
and treatment such as the Yale School of Medicine, Harvard’s
Dana-Farber Cancer Institute and the University of Pennsylvania,
Precipio offers a new standard of diagnostic accuracy enabling the
highest level of patient care. For more information, please visit
www.precipiodx.com.
Forward-Looking Statements
Certain statements in this press release
constitute “forward-looking statements,” within the meaning of
federal securities laws, including statements related to ICP
technology, including financial projections related thereto and
potential market opportunity, plans and prospects and other
statements containing the words “anticipate,” “intend,” “may,”
“plan,” “predict,” “will,” “would,” “could,” “should,” and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
The Company’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of
various factors. Factors that could cause future results to
materially differ from the recent results or those projected in
forward-looking statements include the known risks, uncertainties
and other factors described in the Company’s definitive proxy
statement filed on May 29, 2018, the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2019 and on the
Annual Report on Form 10-K for the year ended December 31, 2018 as
well as the Company’s prior filings and from time to time in the
Company’s subsequent filings with the Securities and Exchange
Commission. Any change in such factors, risks and uncertainties may
cause the actual results, events and performance to differ
materially from those referred to in such statements. All
information in this press release is as of the date of the release
and the Company does not undertake any duty to update this
information, including any forward-looking statements, unless
required by law.
Inquiries:
investors@precipiodx.com
+1-203-787-7888 Ext. 523
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