Reports third quarter 2022 commercial revenue of $4.7 million
Delivered year-over-year recurring revenue growth of 34%
Reaffirms full year 2022 commercial revenue guidance of at least $17.0 million
LOWELL, Mass., Nov. 10, 2022 (GLOBE NEWSWIRE) -- Rapid Micro Biosystems, Inc. (Nasdaq: RPID) (the “Company”), an innovative life sciences technology company providing mission critical automation solutions to facilitate the efficient manufacturing and fast, safe release of healthcare products, today announced its financial results for the third quarter ended September 30, 2022.
Recent Highlights
- Third quarter commercial revenue (combined product and service revenue) of $4.7 million
- Third quarter recurring revenue of $2.9 million
- Placed three new systems and completed validation of four new customer systems in the third quarter
- Announced RMBNucleus™ Mold Alarm for the Growth Direct® system
- Cash, cash equivalents and investments of $150.1 million at September 30, 2022
“We placed three systems in the third quarter, which was ahead of our expectations," said Robert Spignesi, President and CEO. "We also announced our innovative RMBNucleus Mold Alarm software product at the recent PDA Conference, which generated significant customer interest and excitement. Mold Alarm provides even more differentiation and value that we can deliver to customers with the Growth Direct platform. We are improving our commercial execution as we continue to expand in-person customer interactions and are confident that we are on the right path to drive future sales growth.”
Third Quarter Financial Results
Total (commercial) revenue for the third quarter of 2022 was $4.7 million, compared to commercial revenue of $6.3 million in the third quarter of 2021. The decrease was largely attributable to placing three Growth Direct systems in the quarter compared to 10 system placements in the prior-year period. This was partially offset by higher recurring consumables and service contract revenue, which increased 34% to $2.9 million, compared to $2.2 million in the third quarter last year. The Company completed validation of four new customer systems in the third quarter of 2022 compared to five in the prior-year period.
In the third quarter of 2022, the Company did not recognize any revenue from its contract with the U.S. Biomedical Advanced Research and Development Authority (“BARDA”), which was completed in the fourth quarter 2021. In the third quarter of 2021, the Company recognized $0.6 million of non-commercial revenue related to its BARDA contract.
Total cost of commercial revenue was $7.5 million in the third quarter of 2022, compared to $7.8 million in the third quarter of 2021, representing a decrease of 4%. The decrease was due to lower sales volume in systems and increased manufacturing efficiencies in consumables, partially offset by higher sales volume and one-time charges in consumables, lower overhead volume leverage in systems, and higher service costs associated with higher headcount, travel and materials to support increasing field service activity.
Total operating expenses were $14.1 million in the third quarter of 2022, compared to $10.8 million in the third quarter of 2021. The increase was mainly due to expenses related to the unsolicited offer in late June from Kennedy Lewis Investment Management to acquire all of the outstanding shares of the Company and the strategic review process announced in August. In addition, the Company recorded a charge of approximately $1.1 million in the third quarter of 2022 primarily related to severance, employee benefits and outplacement related costs under the restructuring plan also announced in August. The Company expects this plan to result in approximately $8.0 - $9.0 million in annualized cost savings by the first quarter of 2023.
Net loss for the third quarter of 2022 was $16.3 million, compared to $25.0 million in the third quarter of 2021. The decline was largely due to one-time charges incurred in the prior-year period related to an adjustment in the fair value of the Company's outstanding preferred stock warrants following the initial public offering and the repayment of the Company's term loan in September 2021, as well as higher net interest income in the current-year period, partially offset by higher operating expenses in the current-year period. Net loss per share attributable to common shareholders for the third quarter of 2022 was $0.38, compared to $0.71 in the third quarter of 2021.
Cash, cash equivalents and investments were $150.1 million, and the Company had no debt outstanding, as of September 30, 2022.
Full Year 2022 Outlook
The Company is reaffirming its prior full year 2022 revenue outlook of at least $17.0 million, which assumes the placement of at least two systems in the fourth quarter of the year.
Ongoing Review of Strategic Alternatives
As previously announced on August 12, 2022, the Company's Board of Directors is conducting a review of strategic alternatives to determine the best path to maximize shareholder value. The Board is progressing through its review, and the Company does not intend to provide further updates on the Board’s process unless and until it determines that further disclosure is appropriate or necessary. There can be no assurance that the strategic alternative process will result in the Company pursuing a particular transaction or any other strategic outcome.
Webcast Details
The Company will host a conference call before the market opens today, November 10, 2022, at 8:30 a.m. EST to discuss its third quarter 2022 financial results. The live call is accessible on the Company’s website at investors.rapidmicrobio.com and will be archived and available for replay for one year.
About Rapid Micro Biosystems
Rapid Micro Biosystems is an innovative life sciences technology company providing mission critical automation solutions to facilitate the efficient manufacturing and fast, safe release of healthcare products such as biologics, vaccines, cell and gene therapies, and sterile injectables. The Company’s flagship Growth Direct system automates and modernizes the antiquated, manual microbial quality control (“MQC”) testing workflows used in the largest and most complex pharmaceutical manufacturing operations across the globe. The Growth Direct system brings the quality control lab to the manufacturing floor, unlocking the power of in-line/at-the-line MQC automation to deliver faster results, greater accuracy, increased operational efficiency, better compliance with data integrity regulations, and quicker decision making, that customers rely on to ensure safe and consistent supply of important healthcare products. The Company is headquartered and has U.S. manufacturing in Lowell, Massachusetts, with global locations in Lexington, Massachusetts, Switzerland, Germany, and the Netherlands. For more information, please visit www.rapidmicrobio.com or follow the Company on Twitter at @rapidmicrobio or on LinkedIn.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, but not limited to, statements regarding the Company’s full year 2022 revenue outlook range and expected future revenue and growth; expected placements of Growth Direct systems, anticipated timing of such placements and the impact on the Company’s commercial revenue; its expectations regarding customers capital purchasing decisions and the Company’s sales opportunities; expectations for the RMBNucleus Mold Alarm; the projected cost savings resulting from the Company’s organizational restructuring action; expectations regarding the Company’s improvements in commercial execution and enhanced sales and marketing processes; its Board of Directors’ review of strategic alternatives; and customer interest in and adoption of the Company's Growth Direct microbial quality control platform.
In some cases, you can identify forward-looking statements by terminology such as “outlook,” “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements involve known and unknown risks, uncertainties and assumptions which may cause actual results to differ materially from any results expressed or implied by any forward-looking statement, including, but not limited to, the impact of macroeconomic volatility and COVID-19 and its variants on the Company’s business and operations, including further delays in placements and validation of new systems; the Company’s organizational restructuring plan, including a reduction in workforce, may not result in the anticipated savings, could result in total costs and expenses that are greater than expected and could disrupt the Company’s business; the Company’s significant losses since inception; the Company’s ability to meet its publicly announced guidance and other expectations about its business and operating results; the Company’s limited experience in marketing and sales and the effectiveness of its sales processes; the Company’s need to develop new products and adapt to technological changes; the Company’s ability to establish and maintain its position as a leading provider of automated microbial quality control testing; the Company’s ability to maintain its manufacturing facility; risks related to third-parties; its ability to retain key management and other employees; risks related to regulatory and intellectual property matters; risks related to supply chain disruptions and the impact of inflation; risks relation to the exploration of strategic alternatives; and the other important factors outlined under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 24, 2022, as such factors may be updated from time to time in its other filings with the SEC, which are available on the SEC's website at www.sec.gov and the Investor Relations page of its website at investors.rapidmicrobio.com. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, it cannot guarantee future results. The Company has no obligation, and does not undertake any obligation, to update or revise any forward-looking statement made in this press release to reflect changes since the date of this press release, except as may be required by law.
RAPID MICRO BIOSYSTEMS, INC.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Revenue: | |||||||||||||||
| Product revenue | $ | 3,209 | $ | 4,824 | $ | 8,212 | $ | 12,630 | |||||||
| Service revenue | 1,530 | 1,479 | 4,547 | 4,152 | |||||||||||
| Non-commercial revenue | — | 596 | — | 1,242 | |||||||||||
| Total revenue | 4,739 | 6,899 | 12,759 | 18,024 | |||||||||||
| Costs and operating expenses: | |||||||||||||||
| Cost of product revenue | 5,627 | 6,298 | 13,220 | 17,900 | |||||||||||
| Cost of service revenue | 1,906 | 1,516 | 5,478 | 3,997 | |||||||||||
| Cost of non-commercial revenue | — | 396 | — | 1,282 | |||||||||||
| Research and development | 2,973 | 2,441 | 9,463 | 6,926 | |||||||||||
| Sales and marketing | 3,930 | 3,063 | 10,870 | 8,460 | |||||||||||
| General and administrative | 7,189 | 5,308 | 19,687 | 12,135 | |||||||||||
| Total costs and operating expenses | 21,625 | 19,022 | 58,718 | 50,700 | |||||||||||
| Loss from operations | (16,886 | ) | (12,123 | ) | (45,959 | ) | (32,676 | ) | |||||||
| Other income (expense): | |||||||||||||||
| Interest income (expense), net | 575 | (761 | ) | 947 | (2,603 | ) | |||||||||
| Change in fair value of preferred stock warrant liability | — | (8,160 | ) | — | (19,643 | ) | |||||||||
| Loss on extinguishment of debt | — | (3,100 | ) | — | (3,100 | ) | |||||||||
| Other income (expense), net | (21 | ) | (823 | ) | 70 | (840 | ) | ||||||||
| Total other income (expense), net | 554 | (12,844 | ) | 1,017 | (26,186 | ) | |||||||||
| Loss before income taxes | (16,332 | ) | (24,967 | ) | (44,942 | ) | (58,862 | ) | |||||||
| Income tax expense (benefit) | 7 | 20 | (583 | ) | 57 | ||||||||||
| Net loss | (16,339 | ) | (24,987 | ) | (44,359 | ) | (58,919 | ) | |||||||
| Accretion of redeemable convertible preferred stock to redemption value | — | 210 | — | (1,761 | ) | ||||||||||
| Cumulative redeemable convertible preferred stock dividends | — | (451 | ) | — | (2,747 | ) | |||||||||
| Net loss attributable to common stockholders — basic and diluted | $ | (16,339 | ) | $ | (25,228 | ) | $ | (44,359 | ) | $ | (63,427 | ) | |||
| Net loss per share attributable to Class A and Class B common stockholders — basic and diluted | $ | (0.38 | ) | $ | (0.71 | ) | $ | (1.05 | ) | $ | (5.14 | ) | |||
| Weighted average common shares outstanding — basic and diluted | 42,517,992 | 35,316,099 | 42,404,243 | 12,344,619 | |||||||||||
RAPID MICRO BIOSYSTEMS, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
| September 30, 2022 | December 31, 2021 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 25,832 | $ | 178,387 | |||
| Short-term investments | 89,062 | 15,110 | |||||
| Accounts receivable | 4,658 | 5,005 | |||||
| Inventory | 20,924 | 15,671 | |||||
| Prepaid expenses and other current assets | 4,101 | 3,951 | |||||
| Total current assets | 144,577 | 218,124 | |||||
| Property and equipment, net | 13,230 | 11,304 | |||||
| Right-of-use assets, net | 7,298 | — | |||||
| Long-term investments | 35,214 | 9,966 | |||||
| Other long-term assets | 1,313 | 1,491 | |||||
| Restricted cash | 284 | 284 | |||||
| Total assets | $ | 201,916 | $ | 241,169 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 3,670 | $ | 3,944 | |||
| Accrued expenses and other current liabilities | 7,391 | 10,917 | |||||
| Deferred revenue | 3,404 | 3,305 | |||||
| Lease liabilities, short-term | 747 | — | |||||
| Total current liabilities | 15,212 | 18,166 | |||||
| Deferred rent, long term | — | 813 | |||||
| Lease liabilities, long-term | 7,467 | — | |||||
| Other long-term liabilities | 221 | 1,210 | |||||
| Total liabilities | 22,900 | 20,189 | |||||
| Total stockholders’ equity | 179,016 | 220,980 | |||||
| Total liabilities and stockholders’ equity | $ | 201,916 | $ | 241,169 | |||
RAPID MICRO BIOSYSTEMS, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
| Nine Months Ended September 30, | |||||||
| 2022 | 2021 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (44,359 | ) | $ | (58,919 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization expense | 1,977 | 1,079 | |||||
| Stock-based compensation expense | 2,914 | 1,165 | |||||
| Change in fair value of preferred stock warrant liability | — | 19,643 | |||||
| Provision recorded for inventory | 219 | 44 | |||||
| Noncash lease expense | 846 | — | |||||
| Noncash interest expense | — | 390 | |||||
| Loss (gain) on disposal of property and equipment | 19 | (18 | ) | ||||
| Accretion on investments | (237 | ) | (4 | ) | |||
| Loss on extinguishment of debt | — | 3,100 | |||||
| Other | (116 | ) | — | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 346 | (18 | ) | ||||
| Inventory | (5,472 | ) | (5,247 | ) | |||
| Prepaid expenses and other current assets | (152 | ) | (2,552 | ) | |||
| Other long-term assets | 69 | (653 | ) | ||||
| Accounts payable | (275 | ) | (2,216 | ) | |||
| Accrued expenses and other current liabilities | (2,770 | ) | 2,646 | ||||
| Deferred revenue | 99 | (520 | ) | ||||
| Other long-term liabilities | — | 3 | |||||
| Net cash used in operating activities | (46,892 | ) | (42,077 | ) | |||
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment | (5,929 | ) | (1,251 | ) | |||
| Proceeds from sale of property and equipment | — | 20 | |||||
| Purchases of investments | (155,340 | ) | — | ||||
| Maturity of investments | 55,000 | 15,000 | |||||
| Net cash (used) provided by investing activities | (106,269 | ) | 13,769 | ||||
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs | — | 79,743 | |||||
| Proceeds from issuance of Class A common stock - stock option exercise | 471 | 294 | |||||
| Proceeds from issuance of Class A common stock - employee stock purchase plan | 159 | — | |||||
| Proceeds from issuance of restricted Class A stock award | — | 523 | |||||
| Payments on finance lease obligations | (24 | ) | — | ||||
| Proceeds from initial public offering of Class A common stock, net of issuance costs | — | 165,453 | |||||
| Proceeds from exercise of common stock warrants | — | 13 | |||||
| Repayment of term loans | — | (26,159 | ) | ||||
| Payment of debt extinguishment fees | — | (1,866 | ) | ||||
| Net cash provided by financing activities | 606 | 218,001 | |||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (152,555 | ) | 189,693 | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 178,671 | 30,179 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 26,116 | $ | 219,872 | |||
