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.”
