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What Are Accelerate Diagnostics’ Key Strengths?

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Strong cash position

In June 2017, Accelerate Diagnostics (AXDX) raised net proceeds of $83.2 million from a public offering of 2.8 million shares of common stock. The company has hinted it could use the funds for commercialization activities and possibly for acquiring complementary businesses or product candidates.

As a result of the offering, the cash position of the company increased to $121.3 million at the end of 3Q17 as compared with $77.8 million at the end of 3Q16. This cash level is sufficient for the company’s current cash burn levels and supporting its product commercialization efforts.

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Differentiated products

Pheno system is the first test approved by the FDA for quantitative antibiotic susceptibility testing done directly from positive blood cultures. At the end of October 2017, the company had signed 295 customer agreements for instruments. Of the total customer agreements, 239 agreements have been signed under customer evaluation and 56 have been converted into placements.

While conventional ID and AST results take between two to three days, the accelerate Pheno system completes ID in ~90 minutes and AST five hours later.

Product pipeline

The company is also focusing on developing its Accelerate PhenoTest HAP/VAP Kit. This product has the potential to improve patient outcomes with ID/AST results by two to three days earlier and is designed to identify more than 80% of causative organisms within five hours of laboratory receipt. The company is targeting CE mark for IVD use by the end of fiscal 2017. The company also plans to expand new tests for complicated urinary tract infections, intra-abdominal infections, and infection involving sterile body fluids.

For fiscal 2017, Accelerate Diagnostics is expected to incur R&D expenses of $22.2 million, while peer Becton Dickinson (BDX) is expected to incur R&D expenses of $1 billion for fiscal 2018. Meanwhile, Bruker (BRKR) and Thermo Fisher Scientific (TMO) are expected to incur R&D expenses of $159 million and $889 million, respectively, for fiscal 2017.

Accelerate Diagnostics makes up about 0.07% of the Vanguard Russell 2000 Growth ETF’s (VTWG) total portfolio holding.

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