PRPO - Precipio Provides Status Update on Current Business Matters | Benzinga
NEW HAVEN, Conn., June 12, 2024 (GLOBE NEWSWIRE) -- Management of specialty cancer diagnostics company Precipio, Inc. (NASDAQ:PRPO) provides the following update to its shareholders on various business matters looking towards mid-year.
1. Business growth
In September of 2023, Precipio's pathology division exceeded its breakeven point of $15M annualized revenue run rate, resulting in a Q4 cash burn of less than $100K for the quarter. In the following quarter, as previously discussed, due to several operational issues, revenue declined below that point.
We are pleased to report that the company has addressed the operational issues and as a result, pathology revenue is heading back towards its breakeven point. We anticipate that in the next quarter, Q3-2024, the pathology division will return to exceeding its breakeven point.
On the products side, the company had several delays in product releases due to several technical and supply chain issues which often occur in this line of business. These hurdles have been addressed, and revenue growth is resuming. Recently, two major new customers received state regulatory approval for implementing our technology in their practice and we anticipate them going live early next quarter.
These two customers are much larger than our average customer and we expect that they, along with several other customers in various onboarding stages, will provide a significant boost to product revenues and significantly advance us toward the necessary $6M annualized product revenue run rate goal that is part of our overall plan to reach profitability.
2. Change Healthcare hacking & cash impact
As we previously mentioned, like many healthcare companies, Precipio too was impacted by the Change Healthcare hacking and subsequent freeze on cash inflow from the pathology services division (this does not impact the products division). We appear to be at the tail-end of this situation, with Change Healthcare in the process of resuming normal operations. The company has taken measures to supplement its cash situation through short-term loans, both from Change Healthcare and independent sources, ensuring it has sufficient funds to continue operations.
We expect a return to normal operations in Q3-2024, and to a quick return of any Change Healthcare loans. Furthermore, with the expected revenue growth discussed in the previous point, we anticipate a gradual reduction in cash burn, heading towards anticipated breakeven later in the year.
3. FDA ruling on LDTs
The recent FDA ruling will ultimately transition Laboratory Developed Tests (LDT) that are currently under the regulation of other federal and private agencies such as CLIA and COLA, to fall under the FDA's jurisdiction as FDA-approved tests. This will require filings ...