Q3-2017 Net Revenues of Over $4 Million Growing
27% Over Prior Year Quarter Represents Fourth Straight
Quarter of Sequential Revenue GrowthNet Loss for the Quarter &
Year to Date a 56% and 51% Improvement Over Prior Year CMS Approved
40% Medicare Price Increase for ThyGenX®AMA Assigned New Dedicated
PLA Reimbursement Code for ThyraMIR®New Lung Cancer Test,
RespriDX™, Launched with Reimbursement
Interpace Diagnostics Group, Inc. (Nasdaq:IDXG) (“Interpace” or
“the Company”), a fully integrated commercial company that provides
clinically useful molecular diagnostic tests and pathology services
for improved patient diagnosis and management, today announced
financial results and business progress for the third quarter ended
September 30, 2017 and year-to-date, as well as recent
accomplishments.
Our revenue growth and cost controls continued in the third
quarter and year-to-date in 2017. Net sales of $4.2 million for the
third quarter of 2017 were a 27% improvement over the prior year
comparable quarter. Accordingly, on an annualized pro forma basis,
our current Net Revenue run rate is almost $17 million. Net sales
year-to-date were $11.5 million, a 16% improvement over the prior
year-to-date comparable period. Importantly, Q3 represents
our fourth straight quarter of sequential Net Revenue growth and
our first quarter of Net Revenues in excess of $4 million.
Our Net Loss for the third quarter of 2017 was $3.3 million as
compared to $7.5 million for the comparable quarter of the prior
year and the year-to-date Net Loss of $7.2 million was
significantly less than the $14.6 million Net Loss for the
comparable prior year-to-date period.
We also continued to improve our balance sheet and liquidity.
From the beginning of the year through September 30, 2017 we raised
gross proceeds of $27.9 million. Our cash position at September 30,
2017 was $11.7 million, our stockholders’ equity was $36.4 million,
and we no longer have long-term debt. As of November 9, 2017, our
cash balance was approximately $16.5 million.
In addition to our improved financial performance, we also made
significant operating progress during the third quarter, as
follows:
- In July we announced the renewal and extension of our exclusive
contract with LabCorp.
- In August we announced Oxford Health coverage of ThyraMIR.
- In September we announced that the AMA assigned a new PLA
(Proprietary Lab Assay) Code for reimbursement of ThyraMIR.
- In September we launched our new lung cancer test, RespriDX, to
differentiate local recurrence of lung cancer from new primary
cancer formation.
- In September we also announced the election of a new director,
Dr. Felice Schnoll-Sussman, Director of the Jay Monahan Center of
Gastrointestinal Health at Weill Cornell Medical Center in
NYC.
- In October CMS announced that ThyGenX, our molecular test for
indeterminate thyroid cysts, would increase our Medicare
reimbursement by 40% beginning January 1, 2018.
- In October we announced two publications that were presented at
the American College of Gastroenterology 2017 Conference related to
the benefits of PancraGEN® and BarreGEN® for favorably impacting
the diagnosis and treatment of patients.
- In October we announced the presentation of the initial results
of a study related to enhancements to ThyGenX at the American
Thyroid Association Conference.
- In October we also announced that Interpace was designated as
“Company of the Month” by G2 Intelligence magazine for September
2017.
“I am very pleased with our financial and operating performance
in Q3-2017 and for the year to date. Most importantly, Q3-2017
resulted in test volume growth in both our GI and Endocrine
franchises, and this is especially important considering the
hurricane damage seen in several of our major markets. Q3 also
represented the completion of our transition of operations to a
stand-alone molecular diagnostics company,” added Jack Stover,
Interpace’s President & CEO.
Q3 and Year-to-Date 2017 Financial
Performance
- Net Revenue for the three-month period ended September 30, 2017
and for the nine-month period was $4.2 million and $11.5 million,
respectively, an increase of 27% over the same prior year quarterly
period and 16% over the same prior year-to-date period due
principally to growth of units and reimbursement of our thyroid
assays.
- Total Operating Expenses for the third quarter of 2017 were
$5.2 million, a $2.7 million or 34% decrease from the same quarter
of 2016, due principally to Asset Impairment charges in the prior
year.
- Year-to-date Total Operating Expenses were $8.8 million, a
reduction of $9.5 million from the prior year, due primarily to a
Change in Fair Value of Contingent Consideration related to
conversion of our then outstanding long-term debt to equity and
termination of future related royalties and milestone
obligations.
- Operating Loss for the quarter of $3.1 million improved $3.4
million or 52% from the same quarter of 2016.
- Operating Loss year-to-date in 2017 was $ 3.0 million, a 77%
improvement compared to the prior year-to-date Operating Loss in
2016 of $13.2 million.
- Net Loss for the third quarter of 2017 of $3.3 million was $4.2
million or a 56% improvement from the third quarter Net Loss of
$7.5 million for the same period in 2016.
- Year-to-date Net Loss of $7.2 million was $7.4 million less or
a 51% improvement from the same year-to-date period of 2016.
- Our cash balance as of September 30, 2017 was $11.7
million.
- Net Cash Used in Operations for the third quarter of 2017
amounted to $4.3 million as compared to $1.3 million for the same
quarter in 2016. Included in Net Cash Used in Operations in the
third quarter of 2017 was approximately $2.0 million of
expenditures related to discontinued operations, transaction fees
and the remainder of payment obligations carried over from the
discontinued contract sales organization (CSO) sold by us in
2015.
- Net Cash Used in Operations year-to-date 2017 was $12.9 million
as compared to $6.7 million for the comparable period of 2016.
Included in Net Cash Used in Operations year-to-date 2017 was
approximately $4.7 million of expenditures related to discontinued
operations, transaction fees and the remainder of payment
obligations carried over from the CSO business we sold in 2015 as
well as a reduction in payables, that were previously extended, of
approximately $1.4 million.
- Total stockholders’ equity was $36.4 million as of September
30, 2017.
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,
adjusts Income or Loss from Continuing Operations for non-cash
charges such as depreciation & amortization, asset impairment,
loss on extinguishment, and the change in fair value of contingent
consideration. Accordingly, Adjusted EBITDA for the three-month
periods ended September 30, 2017 and 2016 was $(1.9) million and
$(3.2) million, respectively. Adjusted EBITDA for the nine months
ended September 30, 2017 and 2016 was $(5.5) million and $(7.4)
million, respectively, due primarily to the reduction in Loss from
Continuing Operations in 2017.
About Interpace Diagnostics Group,
Inc.
Interpace is a a fully integrated commercial 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. 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; ThyGenX®, 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 being “soft launched” with key opinion leaders as we
continue to gather data on this assay that will assist us in
seeking favorable reimbursement as well as important clinical
information. 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. Interpace’s mission is to
provide personalized medicine through molecular diagnostics and
innovation to advance patient care based on rigorous science. For
more information, please visit Interpace’s website at
www.interpacediagnostics.com
About Thyroid Nodules, ThyGenX and ThyraMIR
testing
According to the American Thyroid Association,
approximately 15% to 30% of the 525,000 thyroid fine needle
aspirations (FNAs) performed on an annual basis in the U.S. are
indeterminate for malignancy based on standard cytological
evaluation, and thus are candidates for ThyGenX and ThyraMIR.
ThyGenX and ThyraMIR reflex testing yields high predictive value
in determining the presence and absence of cancer in thyroid
nodules. The combination of both tests can improve risk
stratification and surgical decision-making when standard
cytopathology does not provide a clear diagnosis for the presence
of cancer.
ThyGenX utilizes state-of-the-art next-generation sequencing
(NGS) to identify more than 100 genetic alterations associated with
papillary and follicular thyroid carcinomas, the two most common
forms of thyroid cancer. ThyraMIR is the first microRNA gene
expression classifier. MicroRNAs are small, non-coding RNAs
that bind to messenger RNA and regulate expression of genes
involved in human cancers, including every subtype of thyroid
cancer. ThyraMIR measures the expression of 10 microRNAs.
Both ThyGenX and ThyraMIR are covered by both Medicare and multiple
Commercial insurers.
About Pancreatic Cysts and PancraGEN
PancraGEN is a pancreatic cyst molecular test that, by using a
small sample of pancreatic cyst fluid, can aid in pancreatic cancer
risk assessment. PancraGEN is 90% accurate, according to clinical
studies, enabling effective risk stratification of patients.
Pancreatic cancer is often difficult to diagnose in early stages
and typically spreads rapidly with signs and symptoms appearing
when the cancer is significantly advanced. Because of this, and
that complete surgical removal of the pancreas is not possible,
pancreatic cancer is considered a leading cause of cancer
deaths.
About RespriDX
RespriDX compares the genomic fingerprint of one lung tumor to
that of a second synchronous or metasynchronous lung tumor using a
robust panel of 25 DNA markers. The test is performed on standard
formalin fixed, paraffin embedded biopsy tissue. Use of
RespriDX to help stage the second lung tumor significantly
impacts cancer treatment of the patient.
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 ability to adequately finance the
business, the market's acceptance of its molecular diagnostic
tests, its ability to retain or secure reimbursement, its ability
to secure additional business and generate higher profit margins
through sales of its molecular diagnostic tests, in-licensing or
other means, projections of future revenues, growth, gross profit
and anticipated internal rate of return on investments 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 and 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:
Interpace DiagnosticsInvestor Relations:
Paul KuntzRedchipPaul@Redchip.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 and asset impairment, and change in fair value of
contingent consideration. The table below includes a reconciliation
of this non-GAAP financial measure to the most directly comparable
GAAP financial measure.
Conference Call
As previously announced, Interpace will hold a
conference call Monday, November 13, 2017 at 8:30 a.m. (ET) to
discuss financial and operational results for the third quarter and
year to date ended September 30, 2017. Details as
follows:
The live webcast and subsequent replay may be
accessed by visiting Interpace’s website
www.interpacediagnostics.com. Alternatively, please call
1-866-564-2842 (U.S.) or 1-323-794-2094 (international). The
conference ID number is 6169888. 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.
|
Interpace Diagnostics Group,
Inc. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(unaudited, in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, net |
$ |
4,202 |
|
|
$ |
3,316 |
|
|
$ |
11,527 |
|
|
$ |
9,963 |
|
Cost of revenue |
|
2,069 |
|
|
|
1,846 |
|
|
|
5,719 |
|
|
|
4,866 |
|
Gross
profit |
|
2,133 |
|
|
|
1,470 |
|
|
|
5,808 |
|
|
|
5,097 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Sales and
marketing |
|
1,816 |
|
|
|
1,282 |
|
|
|
4,507 |
|
|
|
4,186 |
|
Research
and development |
|
483 |
|
|
|
659 |
|
|
|
1,202 |
|
|
|
1,339 |
|
General
and administrative |
|
2,116 |
|
|
|
2,858 |
|
|
|
6,431 |
|
|
|
7,655 |
|
Acquisition related amortization expense |
|
813 |
|
|
|
970 |
|
|
|
2,439 |
|
|
|
2,909 |
|
Asset
impairment |
|
- |
|
|
|
3,363 |
|
|
|
- |
|
|
|
3,363 |
|
Change in
fair value of contingent consideration |
|
- |
|
|
|
(1,174 |
) |
|
|
(5,776 |
) |
|
|
(1,174 |
) |
Total
operating expenses |
|
5,228 |
|
|
|
7,958 |
|
|
|
8,803 |
|
|
|
18,278 |
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(3,095 |
) |
|
|
(6,488 |
) |
|
|
(2,995 |
) |
|
|
(13,181 |
) |
Interest expense |
|
(40 |
) |
|
|
(539 |
) |
|
|
(433 |
) |
|
|
(1,601 |
) |
Loss on extinguishment
of debt |
|
- |
|
|
|
- |
|
|
|
(4,278 |
) |
|
|
- |
|
Other (loss) income ,
net |
|
(294 |
) |
|
|
4 |
|
|
|
(414 |
) |
|
|
14 |
|
Loss from
continuing operations before tax |
|
(3,429 |
) |
|
|
(7,023 |
) |
|
|
(8,120 |
) |
|
|
(14,768 |
) |
(Benefit) provision for
income taxes |
|
(42 |
) |
|
|
173 |
|
|
|
(340 |
) |
|
|
(54 |
) |
Loss from
continuing operations |
|
(3,387 |
) |
|
|
(7,196 |
) |
|
|
(7,780 |
) |
|
|
(14,714 |
) |
Income
(loss) from discontinued operations, net of tax |
|
71 |
|
|
|
(297 |
) |
|
|
572 |
|
|
|
101 |
|
Net
loss |
$ |
(3,316 |
) |
|
$ |
(7,493 |
) |
|
$ |
(7,208 |
) |
|
$ |
(14,613 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) income per
share of common stock: |
|
|
|
|
|
|
|
From
continuing operations |
$ |
(0.15 |
) |
|
$ |
(3.96 |
) |
|
$ |
(0.65 |
) |
|
$ |
(8.16 |
) |
From
discontinued operations |
|
0.00 |
|
|
|
(0.16 |
) |
|
|
0.05 |
|
|
|
0.06 |
|
Net
(loss) income per basic share of common stock |
$ |
(0.15 |
) |
|
$ |
(4.13 |
) |
|
$ |
(0.60 |
) |
|
$ |
(8.10 |
) |
|
|
|
|
|
|
|
|
Diluted (loss) income
per share of common stock: |
|
|
|
|
|
|
|
From
continuing operations |
$ |
(0.15 |
) |
|
$ |
(3.96 |
) |
|
$ |
(0.65 |
) |
|
$ |
(8.16 |
) |
From
discontinued operations |
|
0.00 |
|
|
|
(0.16 |
) |
|
|
0.05 |
|
|
|
0.06 |
|
Net
(loss) income per diluted share of common stock |
$ |
(0.15 |
) |
|
$ |
(4.13 |
) |
|
$ |
(0.60 |
) |
|
$ |
(8.10 |
) |
Weighted
average number of common shares and |
|
|
|
|
|
|
|
common
share equivalents outstanding: |
|
|
|
|
|
|
|
Basic |
|
22,028 |
|
|
|
1,816 |
|
|
|
12,022 |
|
|
|
1,803 |
|
Diluted |
|
22,028 |
|
|
|
1,816 |
|
|
|
12,022 |
|
|
|
1,803 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet Data |
|
|
|
|
($ in thousands) unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December
31, |
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
Cash and cash
equivalents |
$ |
11,703 |
|
|
$ |
602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
assets |
|
15,773 |
|
|
|
4,240 |
|
|
|
|
|
Total current
liabilities |
|
8,302 |
|
|
|
16,241 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
50,391 |
|
|
|
41,778 |
|
|
|
|
|
Total liabilities |
|
14,013 |
|
|
|
35,247 |
|
|
|
|
|
Total stockholders'
equity |
|
36,378 |
|
|
|
6,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Cash Flow Data |
|
|
|
|
($ in thousands) unaudited |
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended |
|
|
|
|
|
September 30, |
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
Net loss |
$ |
(7,208 |
) |
|
$ |
(14,613 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operations |
$ |
(12,884 |
) |
|
$ |
(6,617 |
) |
|
|
|
|
Net cash used in
investing activities |
|
(29 |
) |
|
|
- |
|
|
|
|
|
Net cash provided by
financing activities |
|
24,014 |
|
|
|
- |
|
|
|
|
|
Change in cash and cash
equivalents |
|
11,101 |
|
|
|
(6,617 |
) |
|
|
|
|
Cash and equivalents,
Beginning |
|
602 |
|
|
|
8,310 |
|
|
|
|
|
Cash and equivalents,
Ending |
$ |
11,703 |
|
|
$ |
1,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA
(Unaudited) |
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Loss from continuing
operations |
|
|
$ |
(3,387 |
) |
|
$ |
(7,196 |
) |
|
$ |
(7,780 |
) |
|
$ |
(14,714 |
) |
Depreciation and amortization - continuing operations |
|
876 |
|
|
|
1,100 |
|
|
|
2,813 |
|
|
|
3,490 |
|
Stock-based
compensation - continuing operations |
|
271 |
|
|
|
21 |
|
|
|
477 |
|
|
|
109 |
|
Taxes |
|
|
|
(42 |
) |
|
|
173 |
|
|
|
(340 |
) |
|
|
(54 |
) |
Interest expense |
|
|
|
40 |
|
|
|
539 |
|
|
|
433 |
|
|
|
1,601 |
|
Mark to market on
warrant liability |
|
|
|
325 |
|
|
|
- |
|
|
|
401 |
|
|
|
- |
|
Loss on extinguishment
of debt |
|
|
|
- |
|
|
|
- |
|
|
|
4,278 |
|
|
|
- |
|
Asset impairment |
|
|
|
- |
|
|
|
3,363 |
|
|
|
- |
|
|
|
3,363 |
|
Change in
fair value of contingent consideration |
|
- |
|
|
|
(1,174 |
) |
|
|
(5,776 |
) |
|
|
(1,174 |
) |
Adjusted EBITDA |
|
|
$ |
(1,917 |
) |
|
$ |
(3,174 |
) |
|
$ |
(5,494 |
) |
|
$ |
(7,379 |
) |
|
|
|
|
|
|
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Interpace Biosciences (NASDAQ:IDXG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Interpace Biosciences (NASDAQ:IDXG)
Historical Stock Chart
From Apr 2023 to Apr 2024