Interpace Biosciences, Inc. (NASDAQ: IDXG) (“Interpace”), a leader
in enabling personalized medicine, issued the following
communication to shareholders:
Dear Shareholders,
As the newly appointed President and CEO of
Interpace I want to take a moment to formally introduce myself and
share the new vision and mission for this Company as it relates to
our core capabilities, growth prospects and directional outlook for
this year and beyond. I joined Interpace with significant
leadership experience, including with several specialty clinical
laboratories. This includes serving as President & CEO of
Boston Heart Diagnostics, Viracor-IBT Laboratories and Eurofins
Scientific, Inc. I bring to the table important experience in
developing and implementing successful commercial strategies, short
and long term financing options, improving reimbursement, overall
corporate efficiency, and employee effectiveness – all critical
assets as the Company and product pipeline continue to evolve here
at Interpace.
Over the past two months I have worked with the
executive management team, Board of Directors, and our independent
advisors to determine the best path forward to maximize growth and
profitability as we are undoubtedly at a critical inflection point
in our business. The Company has now put in place a restructuring
and reprioritization plan, following a comprehensive evaluation of
the Company's product portfolio, business model, capital allocation
strategy, customer base and future opportunities. It is rooted in
seeking to achieve high growth while leveraging operational
efficiencies and maintaining financial discipline to achieve our
vision – to be an irreplaceable segment in the continuum of quality
patient care, and our mission – to assist healthcare providers in
the diagnosis, triage, and treatment of patients through advanced
diagnostics and novel therapeutics.
To align with the Company’s new strategic vision
Interpace will immediately embark on several initiatives to further
strengthen its profile and enhance shareholder value. These
initiatives include further cost reduction events and corporate
reprioritization efforts, while investing in core capabilities to
ensure the Company maintains operational efficiencies and a growth
profile. This is intended to reduce the cash burn. Interpace will
seek to leverage opportunities to outsource functions that are not
core competencies of the Company while accessing opportunities to
align corporate resources with the Company’s laboratories and field
support teams. In total, the Company will seek to achieve
annualized savings of approximately $7.2 million from its cost
structure. We anticipate this will help the Company realize
$4.5-$4.9 million in cost savings by the end of 2021, net of
investments. Cost-savings initiatives will include reducing
infrastructure costs, streamlining management, consolidating
duplicative functions across both business units, and adapting to a
remote work environment for non-laboratory personnel, which reduces
the need for traditional office structures.
Additionally, as part of its growth plans, the
Company will prioritize the exploration of partnering opportunities
to acquire new technologies that fit the Interpace vision with a
commitment to excellence and delivering higher value at a lower
cost. Further the Company will seek to grow its revenue by
improving its reimbursement, entering new managed care contracts,
and capitalizing on the recent opportunities related to the pricing
of diagnostic testing. The Company’s operational initiatives to
invest in core capabilities include (1) Progressing towards new
automation technology to support testing capabilities across our
clinical services business in order to ensure first-in-class
testing capabilities; (2) Renovating and modernizing the Pittsburgh
clinical services laboratory to solidify the Company’s ability to
compete with top performing labs globally; (3) Improvements in
overall efficiency as new technologies are transferred from
development in the New Haven laboratory to commercialization in the
Pittsburgh laboratory; and (4) In pharma services, exploring new
clinical development capabilities with the Company’s new
state-of-the-art lab in Morrisville, North Carolina to maximize our
ability to meet customers’ needs.
In addition to our cost reduction, corporate
reprioritization, and growth plans, we face significant challenges
with respect to our Nasdaq listing. Nasdaq requires a minimum of
$2.5 million of stockholders’ equity to remain listed on the
exchange. The $47M preferred stock investments by our private
equity investors did not qualify to be accounted for as
stockholders’ equity. Due primarily to this, the adverse impact of
COVID-19 and the impairment charges recently announced, our current
stockholders’ equity deficit to remain compliant through 2021 is
expected to be nearly $43 million. In anticipation of being
delisted from Nasdaq, the Company has applied to be listed on the
OTCQX, the highest tier over-the-counter market. The Company was
notified by Nasdaq of non-compliance with the minimum stockholders’
equity requirement in October 2020 and anticipated being able to
cure the non-compliance in February 2021. Due to the delayed Q3
Form 10-Q filing, the $18M impairment announced in December 2020,
and the re-statement of financials dating back to 2016, it was
recently determined that the Company has been out of compliance
with the minimum stockholders’ equity requirement since the end of
2019. The Company sought to seek an extension which was denied. The
Company considered various alternatives to remediate the
stockholders’ equity shortfall and determined that none of them
were in the best interests of the Company and its stockholders
primarily due to their dilutive impact to our common stockholders.
On February 16, 2021, the Company received the notice of delisting
from Nasdaq. The Company will remain listed on Nasdaq pending its
right to appeal. We understand and share the disappointment our
shareholders may have when receiving this news; however, if the
process results in the Company moving to the OTCQX, there will be
no minimum stockholders’ equity requirement, enabling Interpace to
direct 100% of its energy and focus on growth. While we recognize
this is a necessary step, it will allow the Company to shape and
build upon the foundation in place with a driven emphasis on
visibility, lower cash spend and the prioritization of the usage of
capital in a strategic manner.
In summary, Interpace is an emerging leader in
the diagnostics space offering exceptional, specialized services
along the therapeutic value chain. Our restructuring and
reprioritization plan is firmly rooted in this foundation and is
designed to significantly improve Interpace’s growth and financial
performance. With our refined focus on providing cutting-edge
diagnosis and customized assay solutions, we are confident that
implementing a strategic, reprioritization plan across our platform
will enhance value for patients, physicians, and shareholders
alike.
We would like to thank our employees, and their
families, for their extraordinary contributions during what has
been a challenging time for the Company, which was further
complicated by the pandemic. We believe Interpace certainly has the
talent, resources, and perseverance required to evolve into a
global, industry leading diagnostics and pharma services company. I
very much look forward to working with the bright, talented, and
experienced team here at Interpace through the next phase of its
growth. We will remain forthright and transparent and will continue
updating you on the trends we observe and the progress of our
business. We very much appreciate your continued support.
Sincerely, Thomas Burnell, PhDPresident and
Chief Executive Officer, Interpace BiosciencesFebruary 16, 2021
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 Company’s ability to achieve projected cost
savings and to successfully enact corporate reprioritization
measures, 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 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 should it appeal Nasdaq’s delisting decision, the Company’s
ability to successfully qualify to trade its common stock on the
OTCQX,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, as amended on May 29, 2020 and January 19, 2021,
Current Reports on Form 8-K and Quarterly Reports on Form 10-Q and
amendments thereto. 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 Relations Edison Group
Joseph Green/Megan Paul (646) 653-7030/7034
jgreen@edisongroup.com/mpaul@edisongroup.com
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