Lucira Health, Inc.

Net sales for Q3 2022 were $34.4 million, up 130% from Q3 2021 and 32% sequentially from Q2. GAAP gross loss was $99.6 million with gross margin of -289%, versus about $1.5 million and 10% in Q3 2021, mainly due to a $107.2 million one-time non-cash excess inventory charge. Non-GAAP gross profit was $9.5 million with a 28% margin, compared with $2.4 million and 16% a year ago. GAAP net loss was $126.9 million versus $27.5 million last year; non-GAAP net loss was $15.4 million versus $18.4 million. Cash and cash equivalents ended the quarter at $39.8 million, down from $106 million at year-end 2021. Management did not provide formal revenue or EPS guidance, but said the delay in obtaining OTC EUA for the combo test will significantly impact Q4 2022 sales and cash, and that the company expects to seek additional capital sooner than anticipated.

Erik Engelson said Q3 was solid because demand for the PCR-quality molecular COVID-19 test drove sales growth, and he highlighted new commercialization efforts around Lucira Connect, including a Pfizer marketing agreement and a free telehealth pathway through Sesame Care for positive users. His tone was optimistic about the public-health value of combining testing with immediate access to treatment information and a doctor visit, but it turned sharply more cautious when discussing FDA’s decision to allow only point-of-care approval for now. He emphasized that the product is designed for OTC use and that the delay would materially hurt near-term results, prompting workforce reductions and a strategic alternatives review.

Dan George focused on the financial impact of the inventory charge and the weakening near-term outlook. He said the $99.6 million GAAP gross loss reflected a $107.2 million non-cash excess inventory charge tied to a lower sales forecast after the FDA delay and declining COVID testing demand, while non-GAAP gross profit was $9.5 million at 28%. He also noted R&D fell to $9.1 million from $14.3 million, SG&A rose to $17.6 million from $11.8 million, and cash ended at $39.8 million after inventory and capital equipment purchases, partially offset by the first $30 million tranche of debt financing. He added that the sharp drop in near-term revenue expectations means the company needs additional capital sooner than previously expected.

There was no live analyst Q&A segment in the transcript. The most notable management disclosure was the explanation that FDA would grant only point-of-care approval for the combo COVID/flu test for now, despite Lucira’s OTC-focused submission. Management said FDA agreed to allow an amendment to move toward OTC use once additional prospective clinical data is gathered, but that the delay would significantly affect Q4 sales and cash.