NEW HAVEN, Conn. - Precipio, Inc. (NASDAQ: NASDAQ:PRPO), a specialty cancer diagnostics company, has announced a return to positive business trajectories after recent challenges. The company's pathology division, which faced a dip in revenue due to operational issues, is expected to surpass its breakeven point of $15 million in annualized revenue in the third quarter of 2024, following a successful Q4 in 2023 with less than $100K cash burn.
The products division of Precipio also encountered delays in releases attributed to technical and supply chain issues. However, with these challenges addressed, the division is set to resume revenue growth.
The addition of two major new customers, who are larger than the company's average client and have recently received state regulatory approvals, is projected to significantly boost product revenues and help achieve the $6 million annualized product revenue run rate necessary for profitability.
Precipio has also been affected by the Change Healthcare (NASDAQ:CHNG) hacking incident, which froze cash inflow from its pathology services. To mitigate this, the company secured short-term loans from Change Healthcare and independent sources, ensuring sufficient funds to maintain operations. Normal operations are anticipated to resume in Q3-2024, with a quick return of loans expected.
In light of the FDA's recent ruling on Laboratory Developed Tests (LDTs), Precipio has chosen to submit its products for FDA approval, which is expected to cost around $250,000 over the next four years. This strategy aims to alleviate the burden on Precipio's laboratory customers and provide the company with a competitive edge.
Precipio's CEO, Ilan Danieli, expressed confidence in the company's position to reach breakeven this year and to grow as a financially independent entity with high-margin proprietary products.
The company also reminded shareholders of the upcoming 2024 Annual Meeting of Stockholders, scheduled for Thursday, June 13th, 2024, to be held virtually.
This report is based on a press release statement from Precipio.
InvestingPro Insights
Amidst Precipio, Inc.'s (NASDAQ: PRPO) recent operational improvements and strategic initiatives, real-time financial metrics and expert analysis from InvestingPro provide a deeper look into the company's market position and future prospects. With a modest market capitalization of 8.26M USD, Precipio is navigating its turnaround efforts in a challenging market environment.
InvestingPro data highlights a significant revenue growth of 61.64% over the last twelve months as of Q1 2024, showcasing the company's ability to expand its sales despite prior setbacks. Furthermore, a notable quarterly revenue growth of 21.83% in Q1 2024 indicates a positive short-term trajectory for the company's financial performance.
However, an InvestingPro Tip points out that Precipio is quickly burning through cash, which could be a concern for investors considering the company's need for financial stability to support its growth initiatives. Additionally, the company is trading at a low revenue valuation multiple, suggesting that the market may currently undervalue Precipio's revenue-generating capabilities. This could represent an opportunity for investors who believe in the company's potential to achieve profitability, as analysts predict Precipio will be profitable this year.
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