- Q2 Financial Highlights 2020 vs 2019:
- SaaS revenue of $17.5 million vs $18.3 million
- Total gross margin of 58%, up from 56%
- In July 2020, acquired OpenNMS Group, the world’s premier
open source network management company
- Expands product and service offerings while opening
opportunities beyond healthcare
- Allows teams to leverage complementary AI technologies and
capabilities in Cloud and SaaS
NantHealth, Inc. (NASDAQ-GS: NH), a next-generation,
evidence-based, personalized healthcare company, today reported
financial results for its second quarter ended June 30, 2020.
“In July, we completed the strategic acquisition of the OpenNMS
Group, Inc., a company with the world’s premier open source network
management software platform,” said Ron Louks, Chief Operating
Officer, NantHealth. “This is an exciting transaction for
NantHealth because it expands and diversifies our software
portfolio and service offerings, enhances our AI, Cloud and SaaS
capabilities, and opens market opportunities beyond healthcare.
“In response to the COVID-19 crisis, we supported the healthcare
community by launching the NantHealth Cares initiative. As part of
this initiative, we made our NaviNet AllPayer platform available to
providers for free during the month of May. We believe it is
important to do our part during the pandemic to help reduce the
financial and capacity strain on hard-hit providers, even if it
temporarily impacted our revenue.
“In addition, NantHealth CEO, Dr. Patrick Soon-Shiong, presented
a video series exploring the science behind COVID-19. The
educational series was made accessible on the NantHealth.com
website and our NaviNet and Eviti platforms, which garnered more
than 10,000 views – over 1,300 hours watched. In addition,
NantHealth medical experts hosted two webinars designed to educate
our payers, providers and partners on COVID-19. Both webinars
generated considerable interest with over 900 registrants
each.”
Software and Services Highlights:
- Clinical Decision Support (Eviti®):
- Implemented, through a channel partnership, Eviti Advisor
clinical decision support platform with a leading non-profit
medical center in New York City
- In July, significantly expanded Eviti Connect across the
Medicaid population of a leading U.S. health insurance company with
the addition of two states
- Leveraged the Eviti platform to educate users on the
implications of COVID-19 for cancer care and the science behind
emerging treatments through videos and instruction. Also, added a
feature enabling payers to gain insights to COVID-19 testing
relative to oncology treatment plans
- Released enhancements to the Eviti platform, including:
- Return-on-Investment (ROI) reporting: implemented cost savings
dashboard enabling more robust and expedited validation of ROI for
our customers
- White blood cell growth factor deviation messaging: added
messaging to communicate unexpected use of white blood cell growth
factor when a treatment plan is entered, allowing users to make
real-time corrections for faster review and approval
- Payer Engagement (NaviNet®):
- Leveraged the NaviNet platform to enable payers to post updates
to their medical policies and other key information – assisting the
provider community directly impacted by the COVID-19 pandemic
-
Launched workflow enhancements that enable providers to update
prior authorizations already on file with our payer customers.
Payers that enable this option as part of their NaviNet Open
services can expect to receive more prior authorization requests
electronically, while streamlining the process of managing prior
authorizations for their providers
Precision Medicine and Artificial Intelligence -
Highlights:
- In May, received notice from Molecular Diagnostic Services
(MolDx) of a limited coverage determination for Omics CoreSM
- In June, announced the publication of four abstracts in the
developmental therapeutics session of the American Society of
Clinical Oncology (ASCO) 2020 Virtual Scientific Program. In
collaboration with ImmunityBio, LLC, the company presented data,
gathered from its database, which was used to advance findings in
molecularly targeted agents and tumor biology
- In June, announced the publication of a study in JCI Insight, a
peer reviewed journal dedicated to biomedical research. The study,
“Transcriptomic silencing as a potential mechanism of treatment
resistance,” explained the importance of using both transcriptomics
and genomics for patient tumor interrogation to gain actionable
insights into reducing the risk of tumor treatment resistance
Business and Financial Highlights
For the 2020 second quarter:
- Total net revenue was $17.6 million, which included $17.5
million of SaaS revenue. This compares with 2019 second quarter
total net revenue of $20.1 million, which included $18.3 million of
SaaS revenue and $1.3 million of home health care services revenue,
a business the Company divested on June 7, 2019
- Gross profit increased to $10.3 million, or 58% of total net
revenue, compared with $11.3 million, or 56% of total net revenue,
for the prior year period
- Selling, general and administrative (SG&A) expenses
declined to $12.0 million from $13.8 million in 2019 second
quarter
- Research and development (R&D) expenses increased to $4.2
million from $3.4 million, primarily due to investments in product
portfolio expansion and growth in data science, machine learning
and AI capabilities
- Net loss from continuing operations, net of tax, was $48.3
million, or $0.44 per share, which included a non-cash loss from
related party equity method investment of $29.9 million and a $6.9
million expense from our fair value bookings commitment liability.
This compares with the prior-year second quarter net loss from
continuing operations, net of tax, of $17.1 million, or $0.15 per
share, which included loss from related party equity method
investment of $2.2 million
- Non-GAAP net loss from continuing operations was $7.5 million,
or $0.07 per share, compared with $6.9 million, or $0.06 per share,
for the second quarter of last year
- At June 30, 2020, cash and cash equivalents totaled $37.5
million
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
second quarter ended June 30, 2020. The conference call will be
available to interested parties by dialing 800-708-4540 from the
U.S. or Canada, or 847-619-6397 from international locations,
passcode 49876109. 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 topics such as the company’s
financial status and performance, regulatory and operational
developments, and other 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, a member of the NantWorks ecosystem of companies,
provides leading solutions across the continuum of care for
physicians, payors, patients and biopharmaceutical organizations.
NantHealth enables the use of cutting-edge data and technology
toward the goals of empowering clinical decision support and
improving patient outcomes. NantHealth’s comprehensive product
portfolio combines the latest technology in payor/provider
platforms that exchange information in near-real time (NaviNet and
Eviti), and molecular profiling services that combine comprehensive
DNA & RNA tumor-normal profiling with pharmacogenomics analysis
(GPS Cancer®). For more information, please visit
www.nanthealth.com or follow us on Twitter, Facebook and
LinkedIn.
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 payers’ 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, and applications; successfully enhancing our
Systems Infrastructure and applications to achieve market
acceptance and keep pace with technological developments; customer
concentration; competition; security breaches; bandwidth
limitations; our ability to integrate OpenNMS into our operations;
our ability to obtain regulatory approvals; dependence upon senior
management; the need to comply with and meet applicable laws and
regulations; unexpected adverse events; clinical adoption and
market acceptance of GPS Cancer; and anticipated cost savings. 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. Consolidated Balance Sheets (Dollars
in thousands)
June 30,2020 December 31,2019
(Unaudited)
Assets Current assets Cash and cash equivalents
$
37,526
$
5,243
Accounts receivable, net
3,473
6,179
Related party receivables, net
1,146
823
Prepaid expenses and other current assets
3,359
19,341
Current assets of discontinued operation
—
6,327
Total current assets
45,504
37,913
Property, plant, and equipment, net
13,206
14,985
Goodwill
97,307
97,307
Intangible assets, net
47,829
51,848
Investment in related party
—
31,702
Related party receivable, net of current
848
1,108
Operating lease right-of-use assets
7,776
8,470
Other assets
2,038
1,818
Noncurrent assets of discontinued operation
—
21,336
Total assets
$
214,508
$
266,487
Liabilities and Stockholders' Equity Current
liabilities Accounts payable
$
3,159
$
3,377
Accrued and other current liabilities
11,852
31,988
Deferred revenue
4,454
7,098
Related party payables, net
3,852
4,120
Notes payable
—
238
Current liabilities of discontinued operation
—
10,680
Total current liabilities
23,317
57,501
Deferred revenue, net of current
687
1,129
Related party liabilities
27,644
24,227
Related party promissory note
112,666
112,666
Related party convertible note, net
9,129
8,864
Convertible notes, net
87,518
84,648
Operating lease liabilities
8,863
9,728
Other liabilities
26,905
23,211
Noncurrent liabilities of discontinued operation
—
1,649
Total liabilities
296,729
323,623
Stockholders' deficit Common stock, $0.0001 par value per
share, 750,000,000 shares authorized; 110,929,357 and 110,619,678
shares issued and outstanding at June 30, 2020 and December 31,
2019, respectively
11
11
Additional paid-in capital
890,292
889,955
Accumulated deficit
(972,108
)
(946,884
)
Accumulated other comprehensive loss
(416
)
(218
)
Total stockholders' deficit
(82,221
)
(57,136
)
Total liabilities and stockholders' deficit
$
214,508
$
266,487
NantHealth, Inc. Consolidated Statements of
Operations (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months EndedJune 30, Six Months
EndedJune 30,
2020
2019
2020
2019
Total net revenue
$
17,585
$
20,052
$
35,765
$
40,261
Total cost of revenue
7,318
8,723
14,514
18,984
Gross Profit
10,267
11,329
21,251
21,277
Operating Expenses Selling, general and
administrative
11,995
13,811
24,422
29,135
Research and development
4,215
3,391
7,765
7,241
Amortization of acquisition-related assets
866
1,054
1,733
2,108
Impairment of intangible asset
—
3,977
—
3,977
Total operating expenses
17,076
22,233
33,920
42,461
Loss from operations
(6,809
)
(10,904
)
(12,669
)
(21,184
)
Interest expense, net
(4,773
)
(4,473
)
(9,430
)
(8,887
)
Other (expense) income, net
(6,751
)
1,069
(3,297
)
(1,436
)
Loss from related party equity method investment
(29,918
)
(2,208
)
(31,702
)
(4,418
)
Loss from continuing operations before income taxes
(48,251
)
(16,516
)
(57,098
)
(35,925
)
Provision for income taxes
4
622
97
848
Net loss from continuing operations
(48,255
)
(17,138
)
(57,195
)
(36,773
)
(Loss) income from discontinued operations, net of tax
(34
)
2,425
31,971
2,137
Net loss
$
(48,289
)
$
(14,713
)
$
(25,224
)
$
(34,636
)
Basic and diluted net income (loss) per share
Continuing operations - common stock
$
(0.44
)
$
(0.15
)
$
(0.52
)
$
(0.33
)
Discontinued operations - common stock
$
—
$
0.02
$
0.29
$
0.02
Total net loss per share - common stock
$
(0.44
)
$
(0.13
)
$
(0.23
)
$
(0.31
)
Weighted average shares outstanding Basic and diluted
- common stock
110,831,456
110,209,510
110,731,925
110,057,981
NantHealth, Inc. Supplemental Revenue Schedule
(Dollars in thousands) (Unaudited)
Three Months
EndedJune 30, Six Months EndedJune 30,
2020
2019
2020
2019
Revenue: Software-as-a-service related
$
17,521
$
18,291
$
35,642
$
36,093
Total software-related revenue
17,521
18,291
35,642
36,093
Sequencing and molecular analysis
64
491
123
1,305
Home health care services
—
1,270
—
2,863
Total net revenue
$
17,585
$
20,052
$
35,765
$
40,261
Cost of Revenue: Software-as-a-service related
$
5,916
$
5,658
$
11,617
$
11,366
Maintenance
—
97
—
167
Amortization of developed technologies
1,143
1,143
2,286
2,376
Total software-related cost of revenue
7,059
6,898
13,903
13,909
Sequencing and molecular analysis
259
1,177
611
3,604
Home health care services
—
648
—
1,471
Total cost of revenue
$
7,318
$
8,723
$
14,514
$
18,984
NantHealth, Inc. Non-GAAP Net Loss from Continuing
Operations andNon-GAAP Net Loss Per Share from Continuing
Operations (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months EndedJune 30, Six Months
EndedJune 30,
2020
2019
2020
2019
Net loss from continuing operations
$
(48,255
)
$
(17,138
)
$
(57,195
)
$
(36,773
)
Adjustments to GAAP net loss from continuing operations: Loss from
related party equity method investment
29,918
2,208
31,702
4,418
Stock-based compensation expense from continuing operations
396
651
1,128
1,276
Change in fair value of derivatives liability
58
—
63
—
Change in fair value of Bookings Commitment
6,856
(989
)
3,727
1,505
Noncash interest expense related to convertible notes
1,593
1,403
3,135
2,760
Intangible amortization from continuing operations
2,009
2,197
4,019
4,484
Impairment of intangible asset
—
3,977
—
3,977
Loss on sale of business
—
582
—
582
Securities litigation costs
—
—
(103
)
—
Tax (benefit) provision resulting from certain noncash tax items
(36
)
255
(36
)
366
Total adjustments to GAAP net loss from continuing operations
40,794
10,284
43,635
19,368
Net loss from continuing operations - Non-GAAP
$
(7,461
)
$
(6,854
)
$
(13,560
)
$
(17,405
)
Weighted average shares outstanding
110,831,456
110,209,510
110,731,925
110,057,981
Net loss per share from continuing operations -
Non-GAAP
$
(0.07
)
$
(0.06
)
$
(0.12
)
$
(0.16
)
Reconciliation of Net Loss per Common Share from
Continuing Operations to Net Loss per Common Share from Continuing
Operations - Non-GAAP (Unaudited): Three Months
EndedJune 30, Six Months EndedJune 30,
2020
2019
2020
2019
Net loss per common share from continuing operations
$
(0.44
)
$
(0.15
)
$
(0.52
)
$
(0.33
)
Adjustments to GAAP net loss per common share from continuing
operations: Loss from related party equity method investment
0.28
0.01
0.29
0.03
Stock-based compensation expense from continuing operations
—
0.01
0.01
0.01
Change in fair value of derivatives liability
—
—
—
—
Change in fair value of Bookings Commitment
0.06
(0.01
)
0.03
0.01
Noncash interest expense related to convertible notes
0.01
0.01
0.03
0.03
Intangible amortization from continuing operations
0.02
0.02
0.04
0.04
Impairment of intangible asset
—
0.04
—
0.04
Loss on sale of business
—
0.01
—
0.01
Securities litigation costs
—
—
—
—
Tax (benefit) provision resulting from certain noncash tax items
—
—
—
—
Total adjustments to GAAP net loss per common share from continuing
operations
0.37
0.09
0.40
0.17
Net loss per common share from continuing operations -
Non-GAAP
$
(0.07
)
$
(0.06
)
$
(0.12
)
$
(0.16
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200806005970/en/
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com
424.288.4098
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