Conference Call Tuesday, November 13, 2018 at
4:30 pm ET
Interpace Diagnostics Group, Inc. (NASDAQ: IDXG), a fully
integrated commercial and bioinformatics 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 quarter ended
September 30, 2018, as well as recent accomplishments.
Topline highlights include:
- Expanded Guidance of Revenues for the Year to a Range between
$21 and $22 Million
- Revenue Grew to $5.8 Million in the Third Quarter 2018 or 37%
over the Third Quarter 2017
- Year to Date Revenue of $16.1 Million Increased 39% over the
Same Period of 2017
- Cash & Cash Equivalents of $8.0 Million; No Long-Term
Debt
- Added $4.0 Million Line of Credit Availability
- Now Covered by 30 Regional Blue Cross/Blue Shield Plans for
ThyGenX® and ThyraMIR®
Jack Stover, President
and CEO of Interpace Diagnostics, said, “I am very pleased to
report the third quarter of 2018 continues our track record
of revenue growth with seven straight quarters of gains in
both volume and reimbursement.” Mr. Stover continued, “Our thyroid
and pancreatic franchises more than met our expectations. The
expansion of our thyroid franchise with the launch of our new and
expanded mutational panel, ThyGeNEXTTM, the addition of thyroid
coverage by new 30 Blue Cross/Blue Shield plans including the BCBS
Federal Employee Health Benefit Program with 5.3 million covered
lives, as well as concurrent growth in evaluating thyroid slide
biopsies, supported by the recent transition of former Rosetta
Genomics customers, has provided us with the experience and
confidence to expand our guidance for 2018 Revenues to range
between $21 and $22 million.”
Q3 2018 Financial Performance
- Revenue for the three-month period ended September 30, 2018,
was $5.8 million, an increase of 37% over the second quarter 2017.
Revenue year-to-date was $16.1 million, an increase of 39% over the
comparable period in 2017. Quarter over quarter revenue growth for
the third quarter was 5% over the second quarter.
- Gross Profit percentage for the quarter was 52%, up from 51%
for the third quarter of 2017 and gross profit year-to-date was 53%
as compared to 50% for the prior comparable year-to-date
period.
- Operating Loss was $(2.5) million for the quarter ended
September 30, 2018, compared to an Operating Loss of $(3.1) million
for the third quarter of 2017. Year-to-date Operating Loss was
$(7.6) million as compared to an Operating Loss of $(3.0) million
for the same period of 2017. The 2017 Operating Loss included $5.8
million of non-cash reduction of expenses related to a change in
fair value of contingent consideration.
- Net Cash Used in Operating Activities year-to-date was
approximately $6.8 million as compared to $12.9 million year to
date in 2017. A significant portion of the 2017 net cash used was
related to discontinued operations and transaction costs.
- Net Loss for the third quarter of 2018 was $(3.0) million, as
compared to ($3.3) million for the third quarter of 2017, a 10%
improvement. Our year-to-date Net Loss of $(8.2) million compared
to a $(7.2) million Net Loss for the comparable year-to-date period
ended September 30, 2017, which included, as previously
stated, an offset to expenses of $5.8 million related to a non-cash
change in fair value of contingent consideration in 2017.
- Basic and Diluted Net Loss per Common Share for the third
quarter of 2018 was $(0.11) versus $(0.15) for the prior year
quarter, and $(0.29) versus $(0.60) for the year-to-date comparable
quarters.
- 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, stock based
compensation, interest and taxes, mark to market on warrant
liabilities, loss on extinguishment of debt, and the change in fair
value of contingent consideration, for the three-month periods
ended September 30, 2018 and 2017 was $(1.0) million and
$(1.9) million, respectively. Year-to-date Adjusted EBITDA for the
nine-month period ended September 30, 2018 was $(3.4) million as
compared to $(5.5) million for the comparable period of 2017. The
improvement in Adjusted EBITDA was principally due to our increased
Revenues in 2018.
- Cash and Cash Equivalents were $8.0 million at September 30,
2018; there was no long-term debt and Stockholders’ Equity amounted
to $36.0 million at September 30, 2018. Additionally, an up to $4
million line of credit is now available to assist in funding our
working capital needs as well as anticipated lab expansions.
Third Quarter 2018 and Recent Business
Highlights
Our most important progress for the quarter and year-to-date
includes the following:
- Expanding our PancraGEN® assay beyond just pancreatic cysts to
include both biliary strictures and solid pancreatic lesions,
- Adding year to date 30 Blue Cross/Blue Shield plans to cover
our thyroid assays as well as CIGNA now covering ThyraMIR® (in
addition to its previously approved policy to cover
ThyGeNEXT™).
- Most recently announcing new insurance BC/BS coverage by the
Federal Employee Health Benefit Program of 5.3 million covered
lives to utilize our thyroid assays,
- Announcing at the American Thyroid Association (ATA) release of
interim results of our registry data study supporting the use of
ThyGeNEXT™ and ThyraMIR®,
- Receiving approval from Piedmont General Hospital, Georgia’s
largest healthcare system, to cover PancraGEN®,
- Completing the transition of the Rosetta business to our
commercial team utilizing slides to assess the potential
progression of indeterminate thyroid biopsies. Also acquiring most
of the equipment of Rosetta’s Philadelphia lab to assist us in the
expansion of our own clinical labs, and
- As mentioned in the previous quarter, successfully launching
ThyGeNEXTTM our proprietary new expanded mutational panel for
indeterminate thyroid nodules, at the (AACE) Annual Meeting.
Pipeline Progress
Our pipeline progress is principally focused in the following
areas:
- Expansion of new product extensions from existing products,
following a similar strategy like we did for ThyGeNEXT™.
- Acquiring or developing new products similar to what we did by
seeking approval to evaluate slide biopsies for our thyroid assays
and expanding this opportunity as we did with the assumption of
much of the former Rosetta Genomics business, and,
- Developing new products on an existing platform like we are
doing with BarreGEN® for Barrett’s Esophagus.
We are also focused on offering and potentially partnering our
data and capabilities in bioinformatics and continuing to expand
our product offerings by utilizing and leveraging our commercial
team, who have access to many high-level physicians in
Gastrointestinal and Endocrine practices and, therefore, in
acquiring or licensing in products while also seeking expansion of
our product offerings outside of the U.S.
BarreGEN® Franchise
- BarreGEN® is our major pipeline product focus. Our CEP or
Clinical Evaluation Program continues to build as we gather
additional data and results of sophisticated users.
- We are working on our second clinical validity study to support
the ability of BarreGEN® to identify patients at risk of
progression to esophageal cancer years prior to any visible signs
of cancer.
- We are also in discussions with the Centers for Medicare &
Medicaid Services about coverage of BarreGEN®.
- Additionally, we are now performing clinical assessment
evaluations of BarreGEN® in use with devices commonly used in
Barrett’s Esophagus procedures. We will be keeping you advised of
our assessment and progress.
We continue to believe that we have the opportunity to be a
leader in this important disease state and provide critical
information to potentially improve the standard of care in managing
the progression of Barrett's Esophagus.
Conference Call
Interpace will hold a conference call on
Tuesday, November 13, 2018 at 4:30 p.m. to discuss financial and
operational results for the third quarter and year-to-date ended
September 30, 2018 and answer questions. Details are as follow:
Date and Time: Tuesday, November 13, 2018 at 4:30
p.m.
ET
Dial-in Number (Domestic): (877) 407 -
0312
Dial-in Number (International): +1 (201) 389 -
0899
U.K. Dial-in Number: +1 (800) 756 -
3429
Confirmation Number: 136 849 48
Webcast Access:
https://webcasts.eqs.com/interpace20181113
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, Inc.
Interpace is a fully integrated commercial and bioinformatics
company that 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. 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® (now
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 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. The Company’s data base includes data from over 45,000
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 2017 edition of CIO
Applications as one of the top 20 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.
About ThyGeNEXT™ and ThyraMIR® 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
ThyGeNEXT™ and ThyraMIR®.
ThyGeNEXT™ 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.
ThyGeNEXT™ utilizes state-of-the-art next-generation sequencing
(NGS) to identify more than 100 genetic alterations associated with
papillary and follicular and medullary 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,
and through a proprietary algorithm, provides insight of cancer
risk. Both ThyGeNEXT™ and ThyraMIR® are covered by both
Medicare and Commercial insurers.
ThyGeNEXT™ is a proprietary newly expanded mutational panel for
indeterminate thyroid nodules. ThyGeNEXT™ includes numerous
additional molecular markers, gene mutations, and RNA fusions
compared to ThyGenX®. The new product represents a more
comprehensive set of indicators to not only identity malignant or
benign nodules, but also ascertain aggressiveness and other
characteristics.
About PancraGEN®
PancraGEN® is a molecular test for pancreatic
cysts and pancreaticobiliary solid lesions that, by using a small
sample of pancreatic cyst fluid or biopsy, can aid in pancreatic
cancer risk assessment. PancraGEN® is 90% accurate
in pancreatic cysts 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, pancreatic cancer is a
leading cause of cancer deaths.
About RespriDxÔ
RespriDx™ is a molecular test that differentiates between new
primary lung tumors and metastasis by identifying the unique
molecular fingerprint of a tumor using a series of tumor markers
and loss of heterozygosity (LOH). Discerning whether a lung
neoplasm is the result of a newly formed tumor or metastasis is of
critical importance when determining appropriate and effective
patient management, e.g. surgery, chemotherapy, neoadjuvant
treatment, etc.
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, its ability to restructure its liabilities and other
obligations, 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.
CONTACTS:
Investor Relations - Edison GroupJoseph Green(646)
653-7030jgreen@edisongroup.com
Non-GAAP Financial Measures
In addition to the United States generally
accepted accounting principles, or GAAP, results provided
throughout this press release, 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, mark to market on warrant
liability, and other non-cash expenses including loss on
extinguishment of debt, 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.
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, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
Revenue, net |
$ |
5,753 |
|
|
$ |
4,202 |
|
|
$ |
16,062 |
|
|
$ |
11,527 |
|
Cost of revenue |
|
2,763 |
|
|
|
2,069 |
|
|
|
7,590 |
|
|
|
5,719 |
|
Gross
Profit |
|
2,990 |
|
|
|
2,133 |
|
|
|
8,472 |
|
|
|
5,808 |
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
2,048 |
|
|
|
1,816 |
|
|
|
6,135 |
|
|
|
4,507 |
|
Research and
development |
|
510 |
|
|
|
483 |
|
|
|
1,528 |
|
|
|
1,202 |
|
General and
administrative |
|
2,084 |
|
|
|
2,116 |
|
|
|
5,981 |
|
|
|
6,431 |
|
Amortization
expense |
|
813 |
|
|
|
813 |
|
|
|
2,439 |
|
|
|
2,439 |
|
Change in fair value of
contingent consideration |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,776 |
) |
Total
operating expenses |
|
5,455 |
|
|
|
5,228 |
|
|
|
16,083 |
|
|
|
8,803 |
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(2,465 |
) |
|
|
(3,095 |
) |
|
|
(7,611 |
) |
|
|
(2,995 |
) |
Interest expense |
|
(248 |
) |
|
|
(40 |
) |
|
|
(248 |
) |
|
|
(433 |
) |
Loss on extinguishment
of debt |
|
- # |
|
|
|
- |
|
|
|
- |
|
|
|
(4,278 |
) |
Other expense, net |
|
(288 |
) |
|
|
(294 |
) |
|
|
(143 |
) |
|
|
(414 |
) |
Loss from
continuing operations before tax |
|
(3,001 |
) |
|
|
(3,429 |
) |
|
|
(8,002 |
) |
|
|
(8,120 |
) |
Provision (benefit) for
income taxes |
|
7 |
|
|
|
(42 |
) |
|
|
21 |
|
|
|
(340 |
) |
Loss from
continuing operations |
|
(3,008 |
) |
|
|
(3,387 |
) |
|
|
(8,023 |
) |
|
|
(7,780 |
) |
|
|
|
|
|
|
|
|
(Loss)
income from discontinued operations, net of tax |
$ |
(34 |
) |
|
$ |
71 |
|
|
$ |
(129 |
) |
|
$ |
572 |
|
|
|
|
|
|
|
|
|
Net
loss |
$ |
(3,042 |
) |
|
$ |
(3,316 |
) |
|
$ |
(8,152 |
) |
|
$ |
(7,208 |
) |
|
|
|
|
|
|
|
|
Basic (loss) income per
share of common stock: |
|
|
|
|
|
|
|
From
continuing operations |
$ |
(0.11 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.65 |
) |
From
discontinued operations |
|
(0.00 |
) |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
0.05 |
|
Net loss
per basic share of common stock |
$ |
(0.11 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.60 |
) |
|
|
|
|
|
|
|
|
Diluted (loss) income
per share of common stock: |
|
|
|
|
|
|
|
From
continuing operations |
$ |
(0.11 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.65 |
) |
From
discontinued operations |
|
(0.00 |
) |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
0.05 |
|
Net loss
per diluted share of common stock |
$ |
(0.11 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.60 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common shares and |
|
|
|
|
|
|
|
common
share equivalents outstanding: |
|
|
|
|
|
|
|
Basic |
|
28,215 |
|
|
|
22,028 |
|
|
|
28,002 |
|
|
|
12,022 |
|
Diluted |
|
28,215 |
|
|
|
22,028 |
|
|
|
28,002 |
|
|
|
12,022 |
|
Selected Balance Sheet Data
(Unaudited) |
($ in thousands) |
|
|
|
|
|
September 30, |
|
December 31, |
|
|
2018 |
|
|
|
2017 |
|
Cash and cash
equivalents |
$ |
8,002 |
|
|
$ |
15,199 |
|
|
|
|
|
Total current
assets |
|
18,245 |
|
|
|
19,808 |
|
Total current
liabilities |
|
7,762 |
|
|
|
8,091 |
|
|
|
|
|
Total assets |
|
49,801 |
|
|
|
53,598 |
|
Total liabilities |
|
13,772 |
|
|
|
13,729 |
|
Total stockholders
equity |
|
36,029 |
|
|
|
39,869 |
|
|
|
|
|
|
|
|
|
Selected Cash Flow Data
(Unaudited) |
($ in thousands) |
|
|
|
For the Nine Months Ended |
|
September 30, |
|
|
2018 |
|
|
|
2017 |
|
Net loss |
$ |
(8,152 |
) |
|
$ |
(7,208 |
) |
|
|
|
|
Net cash used in
operations |
$ |
(6,800 |
) |
|
$ |
(12,884 |
) |
Net cash used in
investing activities |
|
(388 |
) |
|
|
(29 |
) |
Net cash (used in)
provided by financing activities |
|
(9 |
) |
|
|
24,014 |
|
Change in cash and cash
equivalents |
|
(7,197 |
) |
|
|
11,101 |
|
Cash and equivalents,
Beginning |
|
15,199 |
|
|
|
602 |
|
Cash and equivalents,
Ending |
$ |
8,002 |
|
|
$ |
11,703 |
|
Reconciliation of Adjusted EBITDA
(Unaudited) |
($ in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Loss from
continuing operations |
|
$ |
(3,008 |
) |
|
$ |
(3,387 |
) |
|
$ |
(8,023 |
) |
|
$ |
(7,780 |
) |
Depreciation and amortization |
|
|
870 |
|
|
|
876 |
|
|
|
2,580 |
|
|
|
2,813 |
|
Stock-based
compensation |
|
|
525 |
|
|
|
271 |
|
|
|
1,564 |
|
|
|
477 |
|
Taxes |
|
|
|
7 |
|
# |
|
(42 |
) |
|
|
21 |
|
# |
|
(340 |
) |
Interest expense |
|
|
|
248 |
|
|
|
40 |
|
|
|
248 |
|
|
|
433 |
|
Mark to
market on warrant liability |
|
|
325 |
|
|
|
325 |
|
|
|
259 |
|
|
|
401 |
|
Loss on
extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,278 |
|
Change in
fair value of contingent consideration |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,776 |
) |
Adjusted EBITDA |
|
|
$ |
(1,033 |
) |
|
$ |
(1,917 |
) |
|
$ |
(3,351 |
) |
|
$ |
(5,494 |
) |
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