Interpace Biosciences, Inc. (Nasdaq: IDXG) today announced
financial results for the fiscal quarter ended March 31, 2020 and
provided a business and financial update.
“First quarter revenue was $9.2 million and near
the top end of our previously announced revenue range. During the
first quarter we continued to grow our Clinical and Pharma services
businesses, however, our Clinical services business was impacted by
the pandemic beginning in the second half of March. We also took
immediate action to protect our employees from exposure to the
coronavirus, reduced discretionary and non-essential costs and
accelerated operations integration,” stated Jack Stover, CEO of
Interpace Biosciences.
“While we were generally pleased with first
quarter progress, we did experience the business impact from the
coronavirus pandemic and while recovering, we do anticipate the
impact will continue through the remainder of 2020 and perhaps
beyond. Our focus for the rest of the year will be continuing to
respond to changing conditions while positioning ourselves for
growth and expansion, improving business processes and integrating
our service offerings. We believe that one of the important
positive global impacts of the coronavirus pandemic is an increased
awareness of the importance of the role diagnostics plays in all of
our lives. We are confident that we are well positioned to take
advantage of this opportunity with our diversification, focus on
improving diagnosis and customized assays solutions for patients,
physicians and pharma companies as well.”
First Quarter 2020 Financial
Performance
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Net Revenue for the first quarter of 2020 was $9.2 million, an
increase of 53% from the prior year first quarter, which did not
include Pharma services revenues. |
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Gross Profit was 34% as compared to 56% in the first quarter of
2019; this decrease was due principally to the lower margins
associated with Pharma services in 2020. |
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Loss from Continuing Operations was $(6.2) million as compared to
$(3.4) million for the prior year first quarter driven primarily by
added costs of Pharma services. |
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Adjusted EBITDA was $(4.1) million as compared to $(1.8) million
for the prior year first quarter driven primarily by added costs of
Pharma services. |
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Quarter-end March 31, 2020 cash position was approximately $13.4
million. |
“Our financial performance for the quarter was
impacted by lower than expected Clinical service volume in March,
which we believe has resulted from the required reduction in
non-essential testing procedures in connection with the COVID-19
pandemic. As of mid-June, our business is down approximately 30%
compared to our highs in February and early March and continues to
improve,” stated Fred Knechtel, CFO of Interpace Biosciences.
“In response to customer interest we are
developing serology antibody ELISA testing for COVID-19 at our CLIA
lab in Pittsburgh, PA. We have completed validation, acquired
acceptable kits and reference samples and are preparing to launch,”
stated Jack Stover.
“We anticipate second quarter revenue between
$5.6 million and $6.0 million, however, we cannot provide guidance
for the remainder of the year at this time,” added Stover.
Recent
Clinical and Reimbursement Highlights
We continue to generate and publish clinical
evidence related to our key products, including ThyGeNEXT® and
ThyraMIR® and PancraGEN® as well as our pipeline product,
BarreGEN®.
Reimbursement expansion for our
clinical diagnostics tests to date in 2020 is as follows:
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In April 2020, we executed an agreement with Avalon Healthcare
Solutions (Avalon), a laboratory benefit manager representing
numerous health plans. Our agreement with Avalon offers us
in-network status to approximately 5.8 million lives covered by the
following health plans: Blue Cross Blue Shield North Carolina,
South Carolina, Kansas City and Vermont, and Capital Blue Cross of
Central Pennsylvania. |
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In April 2020, we executed a contract with Blue Cross of Idaho
making ThyGeNEXT® and ThyraMIR® tests covered in-network services
for their more than 576 thousand members. |
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In May 2020, we executed a contract with Blue Cross Blue Shield of
Wyoming. |
CONFERENCE CALL
INFORMATION
Interpace will hold a conference call and
Webcast on Thursday June 25, 2020, at 4:30 pm ET. Details are as
follow:
Date and Time: Thursday June 25, 2020 at
4:30 pm ET
Dial-in Number (Domestic): +1 (877)
407-9716
Dial-in Number (International): +1 (201)
493-6779
Confirmation Number:
13706101
Webcast Access:
http://public.viavid.com/index.php?id=140471
The webcast replay will be available on the
Company’s website approximately two hours following completion of
the call and archived on the Company’s website for 90 days.
About Interpace
Biosciences
Interpace Biosciences is an emerging leader in
enabling personalized medicine, offering specialized services along
the therapeutic value chain from early diagnosis and prognostic
planning to targeted therapeutic applications.
Clinical services, through Interpace
Diagnostics, provides clinically useful molecular diagnostic tests,
bioinformatics and pathology services for evaluating risk of cancer
by leveraging the latest technology in personalized medicine for
improved patient diagnosis and management. Interpace has four
commercialized molecular tests and one test in a clinical
evaluation process (CEP): PancraGEN® for the diagnosis and
prognosis of pancreatic cancer from pancreatic cysts; ThyGeNEXT®
for the diagnosis of thyroid cancer from thyroid nodules utilizing
a next generation sequencing assay; ThyraMIR® for the diagnosis of
thyroid cancer from thyroid nodules utilizing a proprietary gene
expression assay; and RespriDX® that differentiates lung cancer of
primary vs. metastatic origin. In addition, BarreGEN® for Barrett’s
Esophagus, is currently in a clinical evaluation program whereby we
gather information from physicians using BarreGEN® to assist us in
positioning the product for full launch, partnering and potentially
supporting reimbursement with payers.
Pharma services, through Interpace Pharma
Solutions, provides pharmacogenomics testing, genotyping,
biorepository and other customized services to the pharmaceutical
and biotech industries. Pharma services also advance personalized
medicine by partnering with pharmaceutical, academic, and
technology leaders to effectively integrate pharmacogenomics into
their drug development and clinical trial programs with the goals
of delivering safer, more effective drugs to market more quickly,
and improving patient care.
For more information, please visit Interpace
Biosciences’ website at www.interpace.com.
Forward-looking
Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, Section 21E of the Securities Exchange Act of 1934 and the
Private Securities Litigation Reform Act of 1995, relating to the
Company’s future financial and operating performance. The Company
has attempted to identify forward looking statements by terminology
including “believes,” “estimates,” “anticipates,” “expects,”
“plans,” “projects,” “intends,” “potential,” “may,” “could,”
“might,” “will,” “should,” “approximately” or other words that
convey uncertainty of future events or outcomes to identify these
forward-looking statements. These statements are based on current
expectations, assumptions and uncertainties involving judgments
about, among other things, future economic, competitive and market
conditions and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are
beyond the Company’s control. These statements also involve known
and unknown risks, uncertainties and other factors that may cause
the Company’s actual results to be materially different from those
expressed or implied by any forward-looking statement, including
the adverse impact of the Coronavirus (COVID-19) pandemic, our
history of operating losses and the limited revenue generated by
our clinical and pharma services customers, our dependence on sales
and reimbursements from our clinical services, our reliance on
third parties to process and transmit claims to payers for our
clinical services, and any delay, data loss, or other disruption in
processing or transmitting such claims could have an adverse effect
on our revenue and financial condition, our revenue recognition
being based in part on our estimates for future collections which
estimates may prove to be incorrect, that we will be able to meet
our revenue projections and that there is no guarantee that we will
be successful in completing development or realize any revenue or
benefit from our efforts to launch a new product line of antibody
testing of the COVID-19 virus. Additionally, all forward-looking
statements are subject to the “Risk Factors” detailed from time to
time in the Company’s most recent Annual Report on Form 10-K filed
on April 22, 2020, Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q. Because of these and other risks,
uncertainties and assumptions, undue reliance should not be placed
on these forward-looking statements. In addition, these statements
speak only as of the date of this press release and, except as may
be required by law, the Company undertakes no obligation to revise
or update publicly any forward-looking statements for any
reason.
Contacts:
Investor RelationsEdison GroupJoseph Green(646)
653-7030jgreen@edisongroup.com
INTERPACE BIOSCIENCES,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(in thousands, except per share
data)
| |
|
Three Months Ended |
|
| |
|
March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| |
|
|
|
|
|
|
| Revenue, net |
|
$ |
9,200 |
|
|
$ |
6,010 |
|
| Cost of revenue |
|
|
6,113 |
|
|
|
2,622 |
|
|
Gross Profit |
|
|
3,087 |
|
|
|
3,388 |
|
|
|
|
|
|
|
|
|
|
|
| Sales and marketing |
|
|
2,481 |
|
|
|
2,411 |
|
| Research and development |
|
|
809 |
|
|
|
528 |
|
| General and
administrative |
|
|
4,887 |
|
|
|
2,912 |
|
| Acquisition related
amortization expense |
|
|
1,031 |
|
|
|
813 |
|
|
Total operating expenses |
|
|
9,208 |
|
|
|
6,664 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6,121 |
) |
|
|
(3,276 |
) |
| Interest accretion |
|
|
(109 |
) |
|
|
(129 |
) |
| Other income, net |
|
|
47 |
|
|
|
48 |
|
|
Loss from continuing operations before tax |
|
|
(6,183 |
) |
|
|
(3,357 |
) |
| Provision for income
taxes |
|
|
15 |
|
|
|
5 |
|
|
Loss from continuing operations |
|
|
(6,198 |
) |
|
|
(3,362 |
) |
|
Less adjustment for preferred stock deemed dividend |
|
|
(3,033 |
) |
|
|
- |
|
| Loss from continuing
operations attributable to common stockholders |
|
|
(9,231 |
) |
|
|
(3,362 |
) |
| |
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
(65 |
) |
|
|
(57 |
) |
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|
|
|
|
|
|
|
|
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Net loss attributable to common stockholders |
|
$ |
(9,296 |
) |
|
$ |
(3,419 |
) |
| |
|
|
|
|
|
|
|
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| Basic and diluted (loss)
income per share of common stock: |
|
|
|
|
|
|
|
|
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From continuing operations |
|
$ |
(2.31 |
) |
|
$ |
(0.96 |
) |
|
From discontinued operations |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
Net (loss) income per basic share of common stock |
|
$ |
(2.32 |
) |
|
$ |
(0.97 |
) |
|
|
|
|
|
|
|
|
|
|
| Weighted average number of
common shares and common share equivalents outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
4,004 |
|
|
|
3,515 |
|
|
Diluted |
|
|
4,004 |
|
|
|
3,515 |
|
Selected Balance Sheet Data
(Unaudited)
($ in thousands)
|
|
|
March 31, |
|
|
December 31, |
|
|
|
|
2020 |
|
|
2019 |
|
| Cash and cash
equivalents |
|
$ |
13,370 |
|
|
$ |
2,321 |
|
| |
|
|
|
|
|
|
|
|
| Total current assets |
|
|
28,145 |
|
|
|
16,369 |
|
| Total current liabilities |
|
|
15,726 |
|
|
|
17,298 |
|
| |
|
|
|
|
|
|
|
|
| Total assets |
|
|
78,511 |
|
|
|
69,051 |
|
| Total liabilities |
|
|
25,137 |
|
|
|
29,853 |
|
| Total stockholders’
equity |
|
|
6,838 |
|
|
|
13,026 |
|
Selected Cash Flow Data
(Unaudited)
($ in thousands)
|
|
|
For the Three Months Ended |
|
|
|
|
March 31, |
|
|
|
|
2020 |
|
|
2019 |
|
| Net loss |
|
$ |
(6,263 |
) |
|
$ |
(3,419 |
) |
| |
|
|
|
|
|
|
|
|
| Net cash used in
operations |
|
$ |
(7,122 |
) |
|
$ |
(2,960 |
) |
| Net cash provided by investing
activities |
|
|
- |
|
|
|
1 |
|
| Net cash provided by financing
activities |
|
|
18,171 |
|
|
|
6,015 |
|
| Change in cash and cash
equivalents |
|
|
11,049 |
|
|
|
3,056 |
|
| Cash and equivalents,
Beginning |
|
|
2,321 |
|
|
|
6,068 |
|
| Cash and equivalents,
Ending |
|
$ |
13,370 |
|
|
$ |
9,124 |
|
Non-GAAP Financial
Measures
In addition to the United States generally
accepted accounting principles, or GAAP, results provided
throughout this document, we have provided certain non-GAAP
financial measures to help evaluate the results of our performance.
We believe that these non-GAAP financial measures, when presented
in conjunction with comparable GAAP financial measures, are useful
to both management and investors in analyzing our ongoing business
and operating performance. We believe that providing the non-GAAP
information to investors, in addition to the GAAP presentation,
allows investors to view our financial results in the way that
management views financial results.
In this document, we discuss Adjusted EBITDA, a
non-GAAP financial measure. Adjusted EBITDA is a metric used by
management to measure cash flow of the ongoing business. Adjusted
EBITDA is defined as income or loss from continuing operations,
plus depreciation and amortization, acquisition related expenses,
transition expenses, non-cash stock based compensation, interest
and taxes, and other non-cash expenses including asset impairment
costs, bad debt expense, loss on extinguishment of debt, goodwill
impairment and change in fair value of contingent consideration,
and warrant liability. The table below includes a reconciliation of
this non-GAAP financial measure to the most directly comparable
GAAP financial measure.
Reconciliation of Adjusted
EBITDA (Unaudited)
($ in thousands)
|
|
|
Quarters Ended |
|
|
|
|
March 31, |
|
|
|
|
2020 |
|
|
2019 |
|
| Loss from
continuing operations (GAAP Basis) |
|
$ |
(6,198 |
) |
|
$ |
(3,362 |
) |
| Bad debt expense |
|
|
250 |
|
|
|
- |
|
| Transition expenses |
|
|
56 |
|
|
|
- |
|
| Depreciation and
amortization |
|
|
1,235 |
|
|
|
873 |
|
| Stock-based compensation |
|
|
418 |
|
|
|
538 |
|
| Taxes |
|
|
15 |
|
|
|
5 |
|
| Accretion expense |
|
|
109 |
|
|
|
129 |
|
| Mark to market on warrant
liability |
|
|
(26 |
) |
|
|
(3 |
) |
| Adjusted EBITDA |
|
$ |
(4,141 |
) |
|
$ |
(1,820 |
) |
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