Interpace Biosciences, Inc. (“Interpace” or the “Company”) (Nasdaq:
IDXG) today announced financial results for the fiscal quarter
ended September 30, 2020 and provided a business and financial
update.
Thomas Burnell, President and CEO of Interpace
commented, “We were pleased to see improvement in clinical volumes
in Q3 as the Company continued to recover from the effects of the
pandemic. We exceeded the net revenue guidance previously provided,
driven by higher molecular test volume, higher reimbursement rates
and realization of our ThyraMIR® price increase in the third
quarter. In January, we began to realize reimbursement on the
Medicare ThyGeNEXT® price increase. We experienced improved
business trends through the third quarter and into the fourth
quarter; we currently expect Fourth Quarter Net Revenue to be in
the range of $9 million to $10 million, subject to review and
audit. However, in December and January we are seeing lower testing
volume due to increased COVID cases.”
Mr. Burnell continued, “Additionally, we are
pleased to announce that on January 7th we successfully closed on a
$5 million secured bridge loan with our existing equity investors,
Ampersand Capital Partners and 1315 Capital Partners, which further
demonstrates their commitment as a strategic partner to the
Company. Concurrently, we terminated our credit facility with
Silicon Valley Bank, which had no borrowing availability. As of
January 15th we had a cash balance of $6.1 million, net of
restricted cash.”
Fred Knechtel, CFO of Interpace added, “It is
also important to note that we have successfully transitioned the
testing capabilities from our Rutherford, New Jersey facility to
our Morrisville, North Carolina facility. The North Carolina
facility offers an end to end solution, all under one roof,
allowing for optimization and efficiency in supporting our pharma
and CRO partners. We will vacate the Rutherford facility by the end
of March.”
Third Quarter 2020 Financial Performance
as Compared to the Third Quarter of 2019
|
● |
Net Revenue was $8.2 million, an increase of 7% versus third
quarter 2019. |
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|
|
|
● |
Gross Profit was 37% for both the third quarter 2020 and 2019. |
|
|
|
|
● |
Loss from Continuing Operations was $(6.2) million vs $(7.4)
million in the third quarter 2019. |
|
|
|
|
● |
Adjusted EBITDA was $(2.9) million vs $(4.2) million in the third
quarter 2019. |
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|
● |
September 30, 2020 cash balance was $5.3 million. |
Year to Date Third Quarter 2020
Financial Performance as Compared to Year to Date Third Quarter
2019
|
● |
Net Revenue was $22.8 million, an increase of 14% versus prior year
and included pharma services revenue starting third quarter
2019. |
|
|
|
|
● |
Gross Profit was 33% as compared to 48% for the first nine months
of 2019 due principally to lower margins associated with pharma
services in 2020. |
|
|
|
|
● |
Loss from Continuing Operations was approximately $(18.1) million
as compared to $(16.0) million for the prior year to date
period. |
|
|
|
|
● |
Adjusted EBITDA was $(11.3) million as compared to $(7.4) million
for the prior year to date period. |
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
services through 2020 is as follows:
|
● |
In December 2020, we executed an agreement with Regence Blue Cross
Blue Shield of Washington State, Utah, Oregon, and Idaho. |
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|
● |
In December 2020, we executed an agreement with HealthNow New York,
parent company of Blue Cross Blue Shield of Western New York, and
Blue Cross Blue Shield of Northeastern New York. |
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|
● |
In December, 2020, we executed an agreement with Florida Blue/Blue
Cross Blue Shield of Florida, which was effective January 1,
2021. |
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|
|
|
● |
In December 2020, Medicare increased pricing for our ThyGeNEXT®
test from $600 to $2,900. We began realizing reimbursement at the
higher rate starting in January 2021. |
Form 10-K/A and Form 10-Q/A
Restatements
On January 19th, the Company filed an amended
Form 10-K for the fiscal year ended December 31, 2019 and two
amended Form 10-Q’s for the quarters ended March 31, 2020 and June
30, 2020, which reflected restated financial statements in
connection with our previously announced non-cash impairment charge
of approximately $11.6 million and amortization expenses of
approximately $6 million recorded for an intangible asset which
impacted Fiscal Years 2014 through 2019 and the first two quarters
of 2020.
Nasdaq Update
We submitted a remediation plan to Nasdaq in
December as a result of our failure to meet the Nasdaq minimum
stockholder’s equity requirement of $2.5 million as of June 30,
2020; however, there can be no assurances that our remediation plan
will be approved or that we will be successful in remediating the
deficiency particularly in light of our increased stockholder’s
equity deficit resulting from the impairment charge.
CONFERENCE CALL INFORMATION
Interpace will hold a conference call and
Webcast on Thursday, January 21, 2021, at 4:30 pm ET. Details are
as follow:
Date and Time: Thursday, January 21, 2021 at
4:30 pm ETDial-in Number (Domestic): +1 (877)
407-9716Dial-in Number (International): +1 (201)
493-6779Confirmation Number:
13714992Webcast Access:
http://public.viavid.com/index.php?id=143006
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 versus metastatic origin. In addition, BarreGEN®, a
molecular based assay that helps resolve the risk of progression of
Barrett’s Esophagus to esophageal cancer, is currently in a
clinical evaluation program (CEP) whereby we gather information
from physicians using BarreGEN® to assist us in gathering clinical
evidence relative to the safety and performance of the test and
also providing data that will potentially support payer
reimbursement.
Pharma services, through Interpace Pharma
Solutions, provides pharmacogenomics testing, genotyping,
biorepository and other customized services to the pharmaceutical
and biotech industries. Pharma services also advances 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,
while also 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 statements including,
but not limited to, the adverse impact of the COVID-19 pandemic on
the Company’s operations and revenues, the substantial doubt about
the Company’s ability to continue as a going concern, the
possibility that the Company’s estimates of future revenue may
prove to be materially inaccurate, the Company’s history of
operating losses, the Company’s ability to adequately finance its
business, the Company’s ability to repay its $5M secured bridge
loan, the Company’s ability to maintain its Nasdaq listing in light
of its failure to meet minimum stockholder equity requirements as
of June 30, 2020, as well as the increased difficulty in meeting
the minimum stockholders’ equity requirement as a result of the
impairment charge, the Company’s dependence on sales and
reimbursements from its clinical services, the Company’s ability to
retain or secure reimbursement including its reliance on third
parties to process and transmit claims to payers and the adverse
impact of any delay, data loss, or other disruption in processing
or transmitting such claims, the Company’s revenue recognition
being based in part on estimates for future collections which
estimates may prove to be incorrect, and the Company’s ability to
remediate material weaknesses in internal controls. 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/ Megan Paul(646)
653-7030/7034jgreen@edisongroup.com/mpaul@edisongroup.com
INTERPACE BIOSCIENCES,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)(in thousands, except per
share data)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, net |
|
$ |
8,248 |
|
|
$ |
7,725 |
|
|
$ |
22,752 |
|
|
$ |
20,005 |
|
Cost of revenue |
|
|
5,194 |
|
|
|
4,835 |
|
|
|
15,156 |
|
|
|
10,489 |
|
Gross Profit |
|
|
3,054 |
|
|
|
2,890 |
|
|
|
7,596 |
|
|
|
9,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
2,699 |
|
|
|
2,757 |
|
|
|
6,776 |
|
|
|
8,127 |
|
Research and development |
|
|
763 |
|
|
|
857 |
|
|
|
2,123 |
|
|
|
2,032 |
|
General and
administrative |
|
|
4,482 |
|
|
|
4,492 |
|
|
|
13,481 |
|
|
|
9,613 |
|
Acquisition related
expense |
|
|
- |
|
|
|
838 |
|
|
|
- |
|
|
|
2,534 |
|
Acquisition amortization
expense |
|
|
1,115 |
|
|
|
1,079 |
|
|
|
3,346 |
|
|
|
2,874 |
|
Total operating expenses |
|
|
9,059 |
|
|
|
10,023 |
|
|
|
25,726 |
|
|
|
25,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6,005 |
) |
|
|
(7,133 |
) |
|
|
(18,130 |
) |
|
|
(15,664 |
) |
Interest accretion |
|
|
(138 |
) |
|
|
(111 |
) |
|
|
(414 |
) |
|
|
(331 |
) |
Other income, net |
|
|
(12 |
) |
|
|
(135 |
) |
|
|
473 |
|
|
|
(12 |
) |
Loss from continuing operations before tax |
|
|
(6,155 |
) |
|
|
(7,379 |
) |
|
|
(18,071 |
) |
|
|
(16,007 |
) |
Provision for income
taxes |
|
|
14 |
|
|
|
9 |
|
|
|
43 |
|
|
|
19 |
|
Loss from continuing operations |
|
|
(6,169 |
) |
|
|
(7,388 |
) |
|
|
(18,114 |
) |
|
|
(16,026 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
(65 |
) |
|
|
(58 |
) |
|
|
(194 |
) |
|
|
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(6,234 |
) |
|
|
(7,446 |
) |
|
|
(18,308 |
) |
|
|
(16,077 |
) |
Less adjustment for preferred
stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
(3,033 |
) |
|
|
- |
|
Less dividends on preferred
stock |
|
|
- |
|
|
|
(75 |
) |
|
|
- |
|
|
|
(75 |
) |
Net loss attributable to common stockholders |
|
$ |
(6,234 |
) |
|
$ |
(7,521 |
) |
|
$ |
(21,341 |
) |
|
$ |
(16,152 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations |
|
$ |
(1.53 |
) |
|
$ |
(1.95 |
) |
|
$ |
(5.25 |
) |
|
$ |
(4.34 |
) |
From discontinued operations |
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.05 |
) |
|
|
(0.01 |
) |
Net loss per basic share of common stock |
|
$ |
(1.54 |
) |
|
$ |
(1.97 |
) |
|
$ |
(5.30 |
) |
|
$ |
(4.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares and common share equivalents outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
4,038 |
|
|
|
3,820 |
|
|
|
4,025 |
|
|
|
3,717 |
|
Diluted |
|
|
4,038 |
|
|
|
3,820 |
|
|
|
4,025 |
|
|
|
3,717 |
|
Selected Balance Sheet Data
(Unaudited)($ in thousands)
|
|
September 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Cash and cash equivalents |
|
$ |
5,308 |
|
|
$ |
2,321 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
17,632 |
|
|
|
16,510 |
|
Total current liabilities |
|
|
15,601 |
|
|
|
17,292 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
50,701 |
|
|
|
51,540 |
|
Total liabilities |
|
|
25,963 |
|
|
|
29,847 |
|
Total stockholders’
equity |
|
|
(21,798 |
) |
|
|
(4,479 |
) |
Selected Cash Flow Data
(Unaudited)($ in thousands)
|
|
For the Nine Months Ended |
|
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
Net loss |
|
$ |
(18,308 |
) |
|
$ |
(16,077 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in operating
activities |
|
$ |
(12,395 |
) |
|
$ |
(12,556 |
) |
Net cash used in investing
activities |
|
|
(1,275 |
) |
|
|
(13,921 |
) |
Net cash provided by financing
activities |
|
|
16,657 |
|
|
|
22,767 |
|
Change in cash and cash
equivalents |
|
|
2,987 |
|
|
|
(3,710 |
) |
Cash and equivalents,
Beginning |
|
|
2,321 |
|
|
|
6,068 |
|
Cash and equivalents,
Ending |
|
$ |
5,308 |
|
|
$ |
2,358 |
|
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 and ESPP
plans, interest and taxes, and other non-cash expenses including
asset impairment costs, bad debt expense, receipt of stimulus
grants, 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)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Loss from continuing
operations (GAAP Basis) |
|
$ |
(6,169 |
) |
|
$ |
(7,388 |
) |
|
$ |
(18,114 |
) |
|
$ |
(16,026 |
) |
Bad debt expense |
|
|
- |
|
|
|
- |
|
|
|
250 |
|
|
|
499 |
|
Acquisition related
expense |
|
|
- |
|
|
|
838 |
|
|
|
- |
|
|
|
2,534 |
|
Receipt of HHS stimulus
grant |
|
|
- |
|
|
|
- |
|
|
|
(650 |
) |
|
|
- |
|
Transition expenses |
|
|
687 |
|
|
|
836 |
|
|
|
798 |
|
|
|
836 |
|
Legal and professional
services |
|
|
495 |
|
|
|
- |
|
|
|
495 |
|
|
|
- |
|
Depreciation and
amortization |
|
|
1,394 |
|
|
|
1,158 |
|
|
|
4,102 |
|
|
|
3,164 |
|
Stock-based compensation |
|
|
563 |
|
|
|
211 |
|
|
|
1,381 |
|
|
|
1,247 |
|
Taxes |
|
|
14 |
|
|
|
9 |
|
|
|
43 |
|
|
|
19 |
|
Accretion expense |
|
|
138 |
|
|
|
111 |
|
|
|
414 |
|
|
|
331 |
|
Mark to market on warrant
liability |
|
|
(13 |
) |
|
|
10 |
|
|
|
(62 |
) |
|
|
(35 |
) |
Adjusted EBITDA |
|
$ |
(2,891 |
) |
|
$ |
(4,215 |
) |
|
$ |
(11,343 |
) |
|
$ |
(7,431 |
) |
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