- GPS Adoption:
- GPS Cancer Test to Be Complementary
Diagnostic for FDA Authorized Nant Cancer Vaccine Clinical Trials,
the First Novel Combination of Innate and Adaptive Immunotherapy in
Patients with Pancreatic Cancer
- 365 GPS Commercial Tests Ordered in
Q1, Up from 326 in Q4 ‘16
- 266 GPS Commercial Tests Delivered
in Q1, Up from 233 in Q4 ‘16
- GPS Payer Coverage:
- Added Two New Payers for a Total of
10 Payer Contracts with Self-Employed and Health Plan Payers Now
Covering GPS Cancer
- Added New International
Payer/Reseller, Now Have Four International Resellers of GPS; In
Advanced Discussions with Others
- Detailed Discussions Ongoing with
CMS
- Value Based Care Software and
Services:
- Significant Momentum with New
Customers in Europe and the US
- Expanded License Sale to Strategic
International Customer
- 2017 First Quarter Revenue Increased
16% to $22.5 Million
NantHealth, Inc. (NASDAQ-GS: NH), a next-generation,
evidence-based, personalized healthcare company, today reported
financial results for its first quarter ended March 31, 2017.
GPS Cancer – Highlights
- GPS Cancer Test to Be Complementary
Diagnostic for FDA Authorized Nant Cancer Vaccine Clinical
Trials. The NANT Cancer Vaccine is the first combination
immunotherapy protocol to orchestrate the delivery of metronomic
low-dose radiation and chemotherapy with molecularly-informed,
tumor-associated antigen vaccines and natural killer cells, to
activate the innate and adaptive immune system and to induce
immunogenic cell death. By inducing immunogenic cell death and
protecting as well as enhancing the innate and adaptive immune
system, the NANT Cancer Vaccine seeks to attain long-term
sustainable remission of multiple tumor types with lower toxicity
and higher efficacy than current standards of care.
- Number of covered cancer lives:
at March 31, 2017, the estimated number of patients with cancer
covered by a payer for GPS testing was approximately 327,000
including lives anticipated upon completion of a pilot project with
Horizon Blue Cross Blue Shield.
- Number of GPS Cancer payers: at
March 31, 2017, the number of payers covering GPS Cancer was
10.
- Local Coverage Determination (LCD)
& National Coverage by CMS: Discussions are underway for
both local and national coverage with CMS and FDA regarding GPS
Cancer coverage by Medicare. The company is encouraged following
multiple detailed meetings with CMS in which the accuracy and
comprehensiveness of the GPS Cancer test, as well as its clinical
utility, were presented.
- Number of GPS Cancer Tests: 365
commercial tests ordered and 266 delivered in Q1.
- Expanded adoption of GPS Cancer
with addition of new international payer/reseller for a total of
four.
- Expanded field sales and clinical
team: doubled field sales team that call on oncologists,
expanding our footprint; and increased clinical support for
oncologists engaged with our GPS Cancer team, ensuring full
clinical utility is recognized and reorder is supported.
“We continue to focus on extending coverage for our GPS Cancer
Test in the commercial health insurance and self-employed payer
markets,” said Patrick Soon-Shiong, M.D., Chief Executive Officer
and Chairman of NantHealth. “During the recently completed quarter,
we successfully completed and executed two payer agreements and
added one new international reseller. In addition, we have recently
introduced pilot programs to accelerate adoption. As part of these
programs, commercial insurance payers agree to pay for a certain
number of GPS profiles as part of the pilot project. We have also
developed a GPS Cancer benefit option that can be purchased as a
supplement to existing benefits through aggregators. Our first
group is expected to come on board in late Q3. Last, we are ramping
up our efforts to educate the oncology community and CMS about the
benefits and value of GPS Cancer. We have made significant
additional investments in experienced sales and account management
staff. Dr. Bobby Reddy, former chief medical officer at Caris, has
joined NantHealth as chief medical officer to lead the clinical GPS
Cancer initiatives. In addition, Ron Louks, former president of
devices and emerging solutions at Blackberry, former chief strategy
officer of HTC and former chief technology officer at Sony
Ericsson, has joined in the capacity of chief operating
officer.”
Value Based Care Software and Services – Highlights
During the first quarter, the company:
- Completed 28 go-live projects across
NantOS (Provider and Patient Engagement), Device Connects
(Connected Care) and NaviNet (Payer Engagement)
- Increased, renewed or expanded 59
contractual commitments
- Eviti (Clinical Decision Support)
covered lives increased to approximately 22.5 million at the end of
Q1 from 19.2 million at the end of Q4
- Expanded license sale to strategic
international customer
Ron Louks, Chief Operating Officer of NantHealth, stated,
“Growth from our SaaS business was the key driver to our first
quarter total net revenue increase. We continued to add Device
Connect licenses, client sites and Eviti covered lives. In the
month of April, we recorded significant new customer wins in Europe
and the US.”
Financial Highlights
For the 2017 first quarter, total net revenue increased 16% to
$22.5 million from $19.5 million in 2016 first quarter. Gross
profit was $3.5 million compared with $6.4 million. Selling,
general and administrative (SG&A) expenses declined 24% to
$20.9 million from $27.4 million for the prior year first quarter.
Research and development (R&D) expenses increased to $13.4
million from $10.7 million. For the first quarter of 2017, the
company recorded loss from related party equity method investment
of $4.5 million, which compares to $2.9 million in last year’s
first quarter. Net loss was $41.1 million, or $0.34 per share,
compared with $33.1 million, or $0.36 per share, for 2016 first
quarter.
Financial results for the 2017 first quarter included
approximately $4.5 million loss from related party equity method
investment, $0.8 million of net non-cash expense related to
convertible notes and $5.2 million of intangible amortization,
equal to $0.09 per share in total. On a non-GAAP basis, adjusted
net loss was $29.2 million, or $0.24 per share, for the 2017 first
quarter, compared with $20.4 million, or $0.18 per share, in the
prior year first quarter.
Conference Call Information and Forward-Looking
Statements
Later today, the company will host a conference call at 1:30
p.m. PT (4:30 p.m. ET) to review its results of operations for the
first quarter ended March 31, 2017. The conference call will be
available to interested parties by dialing 844-309-3709 from the
U.S. or Canada, or 281-962-4864 from international locations,
passcode 20821504. The call will be broadcast via the Internet at
www.nanthealth.com. Listeners are encouraged to visit the website
at least 10 minutes prior to the start of the scheduled
presentation to register, download and install any necessary audio
software. A playback of the call will be archived and accessible on
the same website for at least three months.
Discussion during the conference call may include
forward-looking statements regarding such topics as, but not
limited to, the company’s financial status and performance,
regulatory and operational developments, and any comments the
company may make about its future plans or prospects in response to
questions from participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial
measures, including adjusted net loss and adjusted net loss per
share, which are financial measures that are not prepared in
conformity with United States generally accepted accounting
principles (U.S. GAAP). The Company’s management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor’s overall understanding of the
financial results for the Company’s core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company’s core business between current, past and future
periods. Other companies may define these measures in different
ways. Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S. GAAP.
Non-GAAP per share numbers are calculated based on one class of
common stock and do not incorporate the effects, if any, of using
the two-class method.
About NantHealth, Inc.
NantHealth, Inc., a member of the NantWorks ecosystem of
companies, is a next-generation, evidence-based, personalized
healthcare company enabling improved patient outcomes and more
effective treatment decisions for critical illnesses. NantHealth's
unique systems-based approach to personalized healthcare applies
novel diagnostics tailored to the specific molecular profiles of
patient tissues and integrates this molecular data in a clinical
setting with large-scale, real-time biometric signal and phenotypic
data to track patient outcomes and deliver precision medicine. For
nearly a decade, NantHealth has developed an adaptive learning
system, which includes its unique software, middleware and hardware
systems infrastructure that collects, indexes, analyzes and
interprets billions of molecular, clinical, operational and
financial data points derived from novel and traditional sources,
continuously improves decision-making and further optimizes our
clinical pathways and decision algorithms over time. For more
information please visit www.nanthealth.com.
About GPS Cancer™
GPS Cancer™ is a unique, comprehensive test available through
NantHealth. GPS Cancer integrates whole genome (DNA) sequencing,
whole transcriptome (RNA) sequencing, and quantitative proteomics
through mass spectrometry, providing oncologists with a
comprehensive molecular profile of a patient’s cancer to inform
personalized treatment strategies. GPS Cancer testing is conducted
in CLIA-certified and CAP-accredited laboratories, and is a key
enabler for Cancer Breakthroughs 2020, the world’s most
comprehensive cancer collaborative initiative seeking to accelerate
the potential of combination immunotherapy as the next generation
standard of care in cancer patients. For more information,
visit www.gpscancer.com and
www.cancerbreakthroughs2020.org.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Forward-looking statements can be identified by the
words “expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. Risks and uncertainties include, but are not limited to: our
ability to successfully integrate a complex learning system to
address a wide range of healthcare issues; our ability to
successfully amass the requisite data to achieve maximum network
effects; appropriately allocating financial and human resources
across a broad array of product and service offerings; raising
additional capital as necessary to fund our operations; achieving
significant commercial market acceptance for our sequencing and
molecular analysis solutions; establish relationships with, key
thought leaders or payors’ key decision makers in order to
establish GPS Cancer as a standard of care for patients with
cancer; our ability to grow the market for our Systems
Infrastructure, NantOS and NantOS apps; successfully enhancing our
Systems Infrastructure, NantOS or NantOS apps to achieve market
acceptance and keep pace with technological developments; customer
concentration; competition; security breaches; bandwidth
limitations; our ability to continue our relationship with
NantOmics; our ability to obtain regulatory approvals; dependence
upon senior management; the need to comply with and meet applicable
laws and regulations; and unexpected adverse events. We undertake
no obligation to update any forward-looking statement in light of
new information or future events, except as otherwise required by
law. Forward-looking statements involve inherent risks and
uncertainties, most of which are difficult to predict and are
generally beyond our control. Actual results or outcomes may differ
materially from those implied by the forward-looking statements as
a result of the impact of a number of factors, many of which are
discussed in more detail in our reports filed with the Securities
and Exchange Commission.
NantHealth, Inc. Condensed Consolidated Balance
Sheets
(Dollars in thousands, except per share
amounts)
March 31, December 31,
2017 2016 (Unaudited) Assets Current
assets Cash and cash equivalents $ 124,894 $ 160,353 Accounts
receivable, net 8,924 13,728 Inventories 2,175 2,217 Deferred
implementation costs 3,469 3,336 Related party receivables, net 910
899 Prepaid expenses and other current assets 5,760
5,046 Total current assets 146,132 185,579 Property,
plant, and equipment, net 33,072 29,139 Deferred implementation
costs, net of current 8,470 7,910 Goodwill 131,068 131,068
Intangible assets, net 113,906 119,126 Investment in related party
202,671 207,197 Related party receivable, net of current 1,964
1,971 Other assets 2,259 2,317 Total
assets $ 639,542 $ 684,307
Liabilities and
Stockholders' Equity Current liabilities Accounts payable $
3,729 $ 6,720 Accrued and other current liabilities 21,277 25,231
Deferred revenue 16,537 17,216 Related party payables, net
9,451 8,082 Total current liabilities 50,994
57,249 Deferred revenue, net of current 18,279 17,238 Related party
liabilities 7,048 5,612 Related party promissory note 112,666
112,666 Related party convertible note, net 7,655 7,564 Convertible
notes, net 71,770 70,810 Other liabilities 1,611
1,574 Total liabilities 270,023
272,713 Stockholders' equity Common stock, $0.0001
par value per share, 750,000,000 shares authorized; 121,626,567 and
121,250,437 shares issued and outstanding at March 31, 2017 and
December 31, 2016, respectively (Including 6,976 shares of
restricted stock) 12 12 Additional paid-in capital 885,355 886,334
Accumulated deficit (516,388 ) (475,273 ) Accumulated other
comprehensive income 540 521 Total
stockholders' equity 369,519 411,594
Total liabilities and stockholders' equity $ 639,542 $
684,307
NantHealth, Inc. Condensed
Consolidated Statements of Operations (Dollars in thousands,
except per share amounts) (Unaudited)
Three
Months Ended March 31, 2017 2016
Total Net Revenue $ 22,509 $ 19,451
Total Cost of
Revenue 19,029 13,038 Gross profit
3,480 6,413
Operating
Expenses: Selling, general and administrative 20,878 27,373
Research and development 13,399 10,694 Amortization of software
license and acquisition-related assets 1,814
1,815 Total operating expenses 36,091
39,882 Loss from operations (32,611 ) (33,469 ) Interest
expense, net (3,969 ) (1,498 ) Other income, net 273 338 Loss from
related party equity method investment (4,526 )
(2,914 ) Loss before income taxes (40,833 ) (37,543 ) Provision for
(benefit from) income taxes 282 (4,398 ) Net
loss $ (41,115 ) $ (33,145 )
Net income (loss) per share
(1): Basic and diluted - common stock $ (0.34 ) $ (0.36 ) Basic
and diluted - redeemable common stock N/A $ 0.25
Weighted average shares outstanding (1): Basic
and diluted - common stock 121,618,039
99,651,444 Basic and diluted - redeemable common stock
N/A 10,714,285
Footnote:
1) The net income (loss) per share and weighted average shares
outstanding for the three months ended March 31, 2016, have been
computed to give effect to the LLC Conversion that occurred on June
1, 2016, prior to the Company’s initial public offering ("IPO"). In
conjunction with the LLC Conversion, (a) all of the Company’s
outstanding units automatically converted into shares of common
stock, based on the relative rights of the Company's pre-IPO
equityholders as set forth in the Company's limited liability
company agreement and (b) the Company adopted and filed a
certificate of incorporation with the Secretary of State of the
state of Delaware and adopted bylaws. The Company adopted and filed
an amendment to its certificate of incorporation with the Secretary
of State of the state of Delaware to effect a 1-for-5.5 reverse
stock split of its common stock on June 1, 2016. The net
loss per share for the common stock for the three months ended
March 31, 2016 reflects $2,625 in accretion value allocated to the
redeemable common stock. The redeemable common stock contained a
put right, which expired unexercised on June 20, 2016. As a result
of and as of that date, the shares were no longer redeemable and
were included in common stock.
NantHealth, Inc.
Supplemental Revenue Schedule (Dollars in thousands)
(Unaudited)
Three Months Ended March
31, 2017 2016 Revenue: Software and
hardware $ 645 $ 674 Software-as-a-service 15,231
13,701 Total software-related revenue 15,876 14,375 Maintenance
3,162 3,138 Sequencing and molecular analysis 510 - Other services
2,961 1,938 Total net revenue $ 22,509 $ 19,451
Cost of Revenue: Software and hardware $ 312 $ 239
Software-as-a-service 7,233 4,423 Total
software-related cost of revenue 7,545 4,662 Maintenance 862 530
Sequencing and molecular analysis 1,538 - Other services 5,678
3,565 Amortization of developed technologies 3,406
4,281 Total cost of revenue $ 19,029 $ 13,038
NantHealth,
Inc. Non-GAAP Net Loss and Non-GAAP Net Loss Per Share
(Dollars in thousands, except per share amounts) (Unaudited)
Three Months Ended March 31,
2017 2016 Net loss $ (41,115 ) $ (33,145 )
Adjustments to GAAP net loss: Loss from related party equity method
investment 4,526 2,914 Stock-based compensation expense 250 98
Corporate restructuring 220 1,966 Acquisition related compensation
expense - 4,814 Acquisition related sales incentive 662 1,420
Change in fair value of derivatives liability (215 ) - Non-cash
interest expense related to convertible notes 1,051 - Intangible
amortization 5,220 6,096 Impact of intangibles amortization on
provision for (benefit from) income taxes 233
(4,528 ) Total adjustments to GAAP net loss 11,947
12,780 Net loss - Non-GAAP $ (29,168 ) $ (20,365 )
Weighted average shares outstanding (1) 121,618,039
99,651,444 Weighted average Series F/redeemable common stock (1)(2)
- 10,714,285 Shares outstanding -
Non-GAAP (1) 121,618,039 110,365,729
Net loss per share - Non-GAAP (1) $
(0.24 ) $ (0.18 )
Reconciliation of Net Loss per Common Share to Non-GAAP Net Loss
per Common Share: Net loss per common share - GAAP $ (0.34 ) $
(0.36 ) Adjustments to GAAP net loss per common share Loss from
related party equity method investment 0.04 0.03 Stock-based
compensation expense - - Corporate restructuring - 0.02 Acquisition
related compensation expense - 0.05 Acquisition related sales
incentive 0.01 0.01 Change in fair value of derivatives liability -
- Non-cash interest expense related to convertible notes 0.01 -
Intangible amortization 0.04 0.07 Impact of intangibles
amortization on provision for (benefit from) income taxes - (0.05 )
Accretion to redemption value of Series F/redeemable common stock -
0.03 Dilution from Series F/redeemable common stock -
0.02 Total adjustments to GAAP net loss per common
share 0.10 0.18
Net loss per
share - Non-GAAP (1) $ (0.24 ) $
(0.18 ) 1) The net loss per share - non-GAAP,
weighted average shares outstanding, weighted average Series F
units/redeemable stock and shares outstanding - non-GAAP have been
computed to give effect to the LLC conversion that occurred June 1,
2016 prior to our IPO. In conjunction with the LLC Conversion, (a)
all of our outstanding units automatically converted into shares of
common stock, based on the relative rights of our pre-IPO
equityholders as set forth in the limited liability company
agreement and (b) we adopted and filed a certificate of
incorporation with the Secretary of State of the state of Delaware
and adopted bylaws. We filed an amended certificate of
incorporation to effect a 1-for-5.5 reverse stock split of our
common stock on June 1, 2016. 2) The weighted average shares
outstanding have been further adjusted to account for the
redeemable Series F units (converted to common stock in conjunction
with the LLC conversion), whose Put Right expired on June 20, 2016.
Prior to June 20, 2016, these units/shares of common stock were
classified as redeemable members’/stockholders’ equity in the
balance sheet, and as such, were not included in the
weighted-average shares outstanding prior to June 20, 2016. The Put
Right expired June 20, 2016, and the shares were no longer
redeemable and are included in stockholders’ equity following that
day. The weighted-average shares are adjusted to include the
redeemable common stock in the weighted average shares outstanding
for the entire period.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170510006569/en/
For NantHealth, Inc.Investor Contact:Robert
Jafferjaffe@rjaffeco.com424.288.4098
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