Business
Precipio’s Operational Efficiency Measures Continue To Reduce Cash Burn And Move The Company Towards Breakeven
These efficiencies plus revenue growth expected to continue the positive momentum NEW HAVEN, Conn., Aug. 03, 2023 (GLOBE NEWSWIRE) -- Specialty cancer
About this update from Precipio, Inc.
[{"type":"text","content":"These efficiencies plus revenue growth expected to continue the positive momentum\nNEW HAVEN, Conn., Aug. 03, 2023 (GLOBE NEWSWIRE) -- Specialty cancer diagnostics company Precipio, Inc. (NASDAQ: PRPO), announces significant reductions in its cash-burn. For the six months ended June 30, 2023, Precipio is projected to report cash burn (excluding financing proceeds) of $3.1M, a reduction of $1.1M from $4.2M for the same period in 2022, or 26% reduction YoY. Q2-2023 cash burn has declined to $1.4M from $1.7M in Q1-2023, a decrease of 20% QoQ. In Q2 we identified opportunities for operational efficiency throughout the Company that will be realized throughout the remainder of 2023. We expect further reductions in reported cash burn in both Q3 and Q4 in both lab services and new products.The following are a few of the operational efficiency and cost-cutting initiatives that will contribute to the Company’s reduction in cash burn: Lab Services Economies of Scale. In our lab diagnostic services business, we have reduced costs and added capacity with very low incremental costs. As a result, we expect any sales increases to require increased reagent costs but not labor or overhead. This can create an estimated margin increase of approximately 8-10 points on our current annual run-rate of $10.5M, and materially reduce our cash burn.Bringing NGS testing in house. Until Q2 we have been sending approximately $1.0M of NGS cases to outside labs. The launch of NGS testing in-house will enable the Company to capture $1.0M in additional net revenues, generating $300k in additional gross profits and available cash.In-house billing. As mentioned in a prior press release, we have terminated our outside billing contractor and found experienced personnel to perform the same job in-house with higher collection rates and lower costs.Prior to completing this move, the Company’s costs to process, bill and collect exceeded 7.5% of reported sales. Our goal is to reduce billing costs to under 4% of net sales and realize at least an additional $100,000 per year through better collection efforts. Together these initiatives are expected to generate over $400,000 of cash savings on an annual basis.Pathology interpretation restructuring. As a result of the implementation of the new system, this initiative will lead to an immediate reduction of approximately $180K ...