Interpace Diagnostics Group, Inc. (NASDAQ: IDXG), a fully
integrated bioinformatics and commercial molecular diagnostic
company, today announced financial results for the first quarter
ended March 31, 2019, and reviewed recent business progress.
“We had a strong start to the year highlighted
by growth and driven by increasing volume in our gastrointestinal
(PancraGEN®) and endocrine (ThyGeNEXT®/ThyraMIR®) businesses,”
stated Jack Stover, President and CEO of Interpace Diagnostics.
“Based on our solid performance to date, we are pleased to provide
2019 Net Revenue guidance of approximately a 25% increase over the
prior year.”
FIRST QUARTER 2019 FINANCIAL PERFORMANCE
- Net Revenue was $6.01 million, an increase of 25% over the
first quarter of 2018;
- Gross Profit was 56%, an improvement compared to 46% in the
first quarter of 2018;
- Sales & marketing Expenses, were $2.4 million or 40% of Net
Revenues an improvement as compared to 41% of Net Revenues in
2018; G&A Expenses for the quarter were $2.9 million as
compared to $2.2 million for the prior year first quarter;
- Loss from Continuing Operations was $(3.4) million as compared
to $(3.1) million for 2018;
- Net Loss per basic and diluted share was $(.10) in 2019 versus
$(.11) in the prior year;
- Net cash used in operations was $3.0 million during the first
quarter of 2019 as compared to $2.5 million in the same period of
2018;
- Cash and cash equivalents were $9.1 million as of March 31,
2019;
- Adjusted EBITDA (in the attached schedule), which we believe is
a meaningful supplemental disclosure that may be indicative of how
management and our Board of Directors evaluate Company performance,
is defined as income or loss from continuing operations, plus
depreciation and amortization, non-cash stock based compensation,
interest and taxes, and other non-cash expenses including asset
impairment costs, loss on extinguishment of debt, goodwill
impairment and change in fair value of contingent consideration and
our warrant liability. Accordingly, our Adjusted EBITDA for
the three-month periods ended March 31, 2019 and 2018 was $(1.82)
million and $(1.76) million, respectively.
FULL-YEAR 2019 GUIDANCEThe company is providing
annual Net Revenue guidance of between $27 and $28 million,
representing an approximate 25% increase over 2018.
RECENT BUSINESS HIGHLIGHTS
Reimbursement Expansion
- Announced reimbursement expansion for our thyroid business with
Medica in the Midwest for its 1.3 million covered lives;
- Entered into an agreement with the University of Maryland
Medical System (UMMS) to provide Interpace’s molecular products to
the entire UMMS network, and
- Continued to transition the more than 30 Blue Cross/Blue Shield
plans we brought in for our thyroid products in 2018.
Clinical Validation Announcements
- Published data on Interpace’s thyroid registry in
Diagnostic Cytopathology, confirming the value of
complementary use of ThyGenX® and ThyraMIR® testing,
now representing the only test on the market that includes rule-in
properties of next-generation sequencing combined with rule-out
properties in a micro-RNA classifier, and
- Published new data on our key pipeline product, BarreGEN®,in
BMJ Open Gastroenterology, which provides the first independent
evidence of the clinical utility of BarreGEN®.
Commercial & Regulatory Progress
- Expanded our commercial team by eight new representatives;
- Expanded services of ThyGeNEXT® and ThyraMIR®, (now clinically
validated for use with RNARetain® to process specimens prepared in
FFPE samples);
- Received College of American Pathology Accreditation (CAP) for
Pittsburgh, Pennsylvania and New Haven, Connecticut clinical
laboratories, and
- Received New York State regulatory approval of ThyraMIR® for
formalin fixed paraffin-embedded (FFPE) tissue samples.
Pipeline and Development Advancements
- Organized Barrett’s development programs under our leadership
team member Dr. Tina Narick;
- Engaged Dr. Nick Shaheen of University of North Carolina (UNC)
to lead Interpace’s Barrett’s Key Opinion Leader (KOL) Group and
secured agreements with 11 prominent Barrett’s GI doctors (many
involved in various GI in guideline committees) to
participate;
- Progressed with our Clinical Evaluation Process (CEP) for
BarreGEN® exploring potential partnerships to expedite the further
validation and potential launch of this test, and
- Continued to evaluate, with third parties, the potential to
expand and utilize our bioinformatics data accumulated over
multiple years.
CONFERENCE CALL INFORMATION Interpace will hold
a conference call and Webcast on Monday, May 13, 2019, at 4:30 pm
ET to discuss financial and operational results for the first
quarter ended March 31, 2019. Details are as follow:
Date and Time: Monday, May 13,
2019 at 4:30 pm ET |
Dial-in Number (Domestic): (877)
407-0312 |
Dial-in Number
(International): +1 (201) 389-0899 |
Confirmation
Number: 13690534Webcast Access:
https://webcasts.eqs.com/interpacedia20190513/en |
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 Diagnostics Group
Interpace is a fully integrated commercial and
bioinformatics company that provides clinically useful molecular
diagnostic tests and pathology services for evaluating risk of
cancer by leveraging the latest technology in personalized medicine
for improved patient diagnosis and management.
Interpace’s mission is to provide personalized medicine
through molecular diagnostics, innovation and data to advance
patient care based on rigorous science. The Company currently
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. 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. Barrett's Esophagus is a
rapidly growing diagnosis that affects over three million people in
the US and over time can progress to esophageal cancer. The
Company’s data base includes data from over 50,000 patients who
have been tested using the Company’s current products, including
over 25,000 molecular tests for thyroid nodules. Interpace has been
designated by the 2018 edition of CIO Applications as one of the
top 10 companies for providing bioinformatics solutions.
Interpace’s mission is to provide personalized medicine through
molecular diagnostics, innovation and data to advance patient care
based on rigorous science. For more information, please visit
Interpace’s website at www.interpacediagnostics.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. Known and
unknown risks, uncertainties and other factors include, but are not
limited to, the Company’s history of losses, the Company’s ability
to adequately finance its business, the market’s acceptance of its
tests, its ability to retain or secure reimbursement, projections
of future revenue and growth, and its ability to maintain its
NASDAQ listing. 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, Quarterly
Reports on Form 10-Q and other SEC filings. 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 RelationsJoseph Green, Edison
Groupjgreen@edisongroup.com
Non-GAAP Financial Measures
In addition to the United States generally
accepted accounting principles, or GAAP, results provided
throughout this document, Interpace has provided certain non-GAAP
financial measures to help evaluate the results of its 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 the Company’s 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 the Company’s 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, non-cash stock based
compensation, interest and taxes, and other non-cash expenses
including asset impairment costs, loss on extinguishment of debt,
goodwill impairment and change in fair value of contingent
consideration and our warrant liability. The table below includes a
reconciliation of this non-GAAP financial measure to the most
directly comparable GAAP financial measure.
INTERPACE DIAGNOSTICS GROUP,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)(in thousands, except per
share data)
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
Revenue, net |
|
$ |
6,010 |
|
|
$ |
4,809 |
|
Cost of revenue |
|
|
2,622 |
|
|
|
2,580 |
|
Gross Profit |
|
|
3,388 |
|
|
|
2,229 |
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
2,411 |
|
|
|
1,991 |
|
Research and development |
|
|
528 |
|
|
|
501 |
|
General and
administrative |
|
|
2,912 |
|
|
|
2,172 |
|
Acquisition related
amortization expense |
|
|
813 |
|
|
|
813 |
|
Total operating expenses |
|
|
6,664 |
|
|
|
5,477 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(3,276 |
) |
|
|
(3,248 |
) |
Accretion expense |
|
|
(129 |
) |
|
|
- |
|
Other income (loss), net |
|
|
48 |
|
|
|
111 |
|
Loss from continuing operations before tax |
|
|
(3,357 |
) |
|
|
(3,137 |
) |
Provision for income
taxes |
|
|
5 |
|
|
|
6 |
|
Loss from continuing operations |
|
|
(3,362 |
) |
|
|
(3,143 |
) |
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
$ |
(57 |
) |
|
$ |
(50 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,419 |
) |
|
$ |
(3,193 |
) |
|
|
|
|
|
|
|
|
|
Basic (loss) income per share
of common stock: |
|
|
|
|
|
|
|
|
From continuing operations |
|
$ |
(0.10 |
) |
|
$ |
(0.11 |
) |
From discontinued operations |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
Net (loss) income per basic share of common stock |
|
$ |
(0.10 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
Diluted (loss) income per
share of common stock: |
|
|
|
|
|
|
|
|
From continuing operations |
|
$ |
(0.10 |
) |
|
$ |
(0.11 |
) |
From discontinued operations |
|
|
(0.00 |
) |
|
|
(0.00 |
) |
Net (loss) income per diluted share of common stock |
|
$ |
(0.10 |
) |
|
$ |
(0.11 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares and common share equivalents outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
35,147 |
|
|
|
27,855 |
|
Diluted |
|
|
35,147 |
|
|
|
27,855 |
|
Selected Balance Sheet Data
(Unaudited)($ in thousands)
|
|
March 31, |
|
|
December 31, |
|
|
|
2019 |
|
|
2018 |
|
Cash and cash equivalents |
|
$ |
9,124 |
|
|
$ |
6,068 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
22,233 |
|
|
|
17,721 |
|
Total current liabilities |
|
|
9,832 |
|
|
|
8,492 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
54,382 |
|
|
|
48,442 |
|
Total liabilities |
|
|
18,611 |
|
|
|
15,504 |
|
Total stockholders equity |
|
|
35,771 |
|
|
|
32,938 |
|
Selected Cash Flow Data
(Unaudited)($ in thousands)
|
|
For the Three Months Ended |
|
|
|
March 31, |
|
|
|
2019 |
|
|
2018 |
|
Net loss |
|
$ |
(3,419 |
) |
|
$ |
(3,193 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in
operations |
|
$ |
(2,960 |
) |
|
$ |
(2,494 |
) |
Net cash provided by (used in)
investing activities |
|
|
1 |
|
|
|
(60 |
) |
Net cash provided by financing
activities |
|
|
6,015 |
|
|
|
- |
|
Change in cash and cash
equivalents |
|
|
3,056 |
|
|
|
(2,554 |
) |
Cash and equivalents,
Beginning |
|
|
6,068 |
|
|
|
15,199 |
|
Cash and equivalents,
Ending |
|
$ |
9,124 |
|
|
$ |
12,645 |
|
Reconciliation of Adjusted EBITDA
(Unaudited)($ in thousands)
|
|
Quarters Ended |
|
|
|
March 31, |
|
|
|
2019 |
|
|
2018 |
|
Loss from continuing
operations |
|
$ |
(3,362 |
) |
|
$ |
(3,143 |
) |
Depreciation and
amortization |
|
|
873 |
|
|
|
854 |
|
Stock-based compensation |
|
|
538 |
|
|
|
597 |
|
Taxes |
|
|
5 |
|
|
|
6 |
|
Accretion expense |
|
|
129 |
|
|
|
- |
|
Mark to market on warrant
liability |
|
|
(3 |
) |
|
|
(70 |
) |
Adjusted EBITD |
|
$ |
(1,820 |
) |
|
$ |
(1,756 |
) |
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