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NEW HAVEN, Conn., June 07, 2023 (GLOBE NEWSWIRE) — Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces that several operational improvement initiatives which commenced at the start of the year have begun to impact the cash burn and bottom line profitability.
These operational efficiency improvements are independent of the contribution that the revenue continues to provide to the Company. While the minority part of these improvements include cost cutting in various areas, the majority of these are key improvements to the business operations, several of them described below:
Billing transition. Precipio’s team recently completed the transition from using an outside billing firm to bringing it in-house. This will translate into savings of approximately 4% of revenues, or $0.4M/year at current run rates. Pathologist fees. Precipio has restructured its arrangement with the pathologists, reducing cash burn by approximately $0.4M/year. NGS testing in-house. By the end of this quarter (Q2), Precipio expects to transition its next generation sequencing (NGS) testing to be run in-house instead of sending it out, generating an increase of approximately $1.7M/year in revenue and $0.7M/year in gross profit.
These examples represent an impact of over $1.5M cash annually to the bottom line, that is expected to materialize effective Q3-2023. The expected outcome will be a reduction in quarterly cash burn from approximately $1.5M per quarter in Q2-2023, to approximately $1.1M in Q3-2023, a reduction of 25%.
“The combination of continued top line growth along with improved operational efficiencies, are the key to the company’s continued cash burn reduction towards breakeven,” said Ilan Danieli CEO. “Our management team continues to implement additional opportunities to improve our business. We are progressing towards the goal of financial independence and a profitable company, and I’m excited to be in a position where we have this goal within our reach.”
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, as well as proprietary products that serve laboratories worldwide. Through its collaborations with world-class academic institutions specializing in cancer research, diagnostics and treatment, Precipio offers a new standard of diagnostic accuracy enabling the highest level of patient care. For more information, please visit www.precipiodx.com.
This press release contains “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, including, among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of the government, consumers, and the company, on our business, financial condition and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, growth, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management’s expectations, or could affect the company’s ability to achieve its strategic goals, include the uncertainties relating to the impact of COVID-19 on the company’s business, operations and employees and the other factors that are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis” in the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as updated from time to time in the company’s Securities and Exchange Commission filings.
The company’s forward-looking statements in this press release are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.