Interpace Biosciences, Inc. (“Interpace” or the “Company”) (OTCQX:
IDXG) today announced financial results for the fiscal quarter
ended December 31, 2020 and provided a business and financial
update.
“Fiscal 2020 was a challenging and
transformational year for Interpace Biosciences. Since joining the
company as President and CEO in December, we’ve made significant
progress in our restructuring and reprioritization plan and are on
target to realize our goal of achieving annualized savings of
approximately $7.2 million from changes to our cost structure,”
said CEO Thomas Burnell. “We are now operating the clinical
services business solely out of the Pittsburgh location and the
pharma services business solely out of our new state-of-the-art lab
in Morrisville, NC. As we move further into 2021 with the renewed
focus on our core capabilities, we expect to see significant
improvements through the use of automation technology and to
achieve further improvements in overall efficiency with the
renovation of the clinical lab in Pittsburgh,” added Mr.
Burnell.
“As we progress forward in Fiscal 2021, we are
realizing the positive impact of our recently improved
reimbursement rates and seeing significant growth in our clinical
services testing volume,” stated Tom Freeburg, CFO of Interpace.
“We are providing full year revenue guidance in the range of $38
million to $40 million and with a goal of achieving EBITDA
breakeven before 2021 year-end,” added Mr. Freeburg.
Full-Year 2020 Financial Performance as
Compared to Full-Year 2019
- Net Revenue was $32.4 million, an increase of 34% versus the
prior year which included pharma services net revenue starting in
the third quarter of 2019.
- Gross Profit was 33% and 34% for full years 2020 and 2019,
respectively.
- Loss from Continuing Operations was approximately $(26.2)
million as compared to $(26.7) million for the prior year.
- Adjusted EBITDA was $(15.4) million as compared to $(16.6)
million for the prior year.
Fourth Quarter 2020 Financial
Performance as Compared to the Fourth Quarter of 2019
- Net Revenue was $9.6 million, an increase of 129% vs fourth
quarter 2019.
- Gross Profit was 32% for the fourth quarter 2020, vs -28% for
the fourth quarter 2019.
- Loss from Continuing Operations was $(8.1) million vs $(10.6)
million in the fourth quarter 2019.
- Adjusted EBITDA was $(4.1) million vs $(9.2) million in the
fourth quarter 2019.
- December 31, 2020 cash balance was $2.8 million, net of
restricted cash. March 15, 2021 cash balance was $3.4 million, net
of restricted cash.
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.
- 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.
- In December, 2020, we executed an agreement with Florida
Blue/Blue Cross Blue Shield of Florida, which was effective January
1, 2021.
- In December 2020, Medicare increased reimbursement for our
ThyGeNEXT® test from $600 to $2,900. We began realizing
reimbursement at this higher rate starting in January 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 five
commercialized molecular tests and one test in a clinical
evaluation process (CEP): PancraGEN® for the diagnosis and
prognosis of pancreatic cancer from pancreatic cysts; PanDNA, a
“molecular only” version of PancraGEN® that provides physicians a
snapshot of a limited number of factors; 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 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 Annual Report on Form 10-K for the fiscal
year ended December 31, 2020 to be filed with the Securities and
Exchange Commission , 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 (in thousands, except per share
data) (Unaudited)
|
|
Three Months Ended |
|
|
Years Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, net |
|
$ |
9,646 |
|
|
$ |
4,214 |
|
|
$ |
32,398 |
|
|
$ |
24,220 |
|
Cost of revenue |
|
|
6,517 |
|
|
|
5,399 |
|
|
|
21,673 |
|
|
|
15,888 |
|
Gross Profit |
|
|
3,129 |
|
|
|
(1,185 |
) |
|
|
10,725 |
|
|
|
8,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
2,478 |
|
|
|
2,990 |
|
|
|
9,254 |
|
|
|
11,116 |
|
Research and development |
|
|
673 |
|
|
|
778 |
|
|
|
2,795 |
|
|
|
2,810 |
|
General and
administrative |
|
|
7,288 |
|
|
|
4,748 |
|
|
|
20,770 |
|
|
|
14,363 |
|
Acquisition related
expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,534 |
|
Acquisition amortization
expense |
|
|
1,115 |
|
|
|
1,115 |
|
|
|
4,461 |
|
|
|
3,989 |
|
Change in fair value of
contingent consideration |
|
|
(489 |
) |
|
|
(44 |
) |
|
|
(489 |
) |
|
|
(44 |
) |
Total operating expenses |
|
|
11,065 |
|
|
|
9,587 |
|
|
|
36,791 |
|
|
|
34,768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(7,936 |
) |
|
|
(10,772 |
) |
|
|
(26,066 |
) |
|
|
(26,436 |
) |
Interest accretion
expense |
|
|
(135 |
) |
|
|
(109 |
) |
|
|
(549 |
) |
|
|
(440 |
) |
Other (expense) income,
net |
|
|
(6 |
) |
|
|
209 |
|
|
|
467 |
|
|
|
196 |
|
Loss from continuing operations before tax |
|
|
(8,077 |
) |
|
|
(10,672 |
) |
|
|
(26,148 |
) |
|
|
(26,680 |
) |
Provision for income
taxes |
|
|
10 |
|
|
|
(47 |
) |
|
|
53 |
|
|
|
(28 |
) |
Loss from continuing operations |
|
|
(8,087 |
) |
|
|
(10,625 |
) |
|
|
(26,201 |
) |
|
|
(26,652 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax |
|
|
(56 |
) |
|
|
(38 |
) |
|
|
(250 |
) |
|
|
(88 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
(8,143 |
) |
|
|
(10,663 |
) |
|
|
(26,451 |
) |
|
|
(26,740 |
) |
Less adjustment for preferred
stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
(3,033 |
) |
|
|
- |
|
Less dividends on preferred
stock |
|
|
- |
|
|
|
(354 |
) |
|
|
- |
|
|
|
(429 |
) |
Net loss attributable to common stockholders |
|
$ |
(8,143 |
) |
|
$ |
(11,017 |
) |
|
$ |
(29,484 |
) |
|
$ |
(27,169 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per
share of common stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From continuing operations |
|
$ |
(2.00 |
) |
|
$ |
(2.86 |
) |
|
$ |
(7.26 |
) |
|
$ |
(7.23 |
) |
From discontinued operations |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.06 |
) |
|
|
(0.02 |
) |
Net loss per basic share of common stock |
|
$ |
(2.01 |
) |
|
$ |
(2.87 |
) |
|
$ |
(7.32 |
) |
|
$ |
(7.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common share equivalents
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
4,043 |
|
|
|
3,834 |
|
|
|
4,029 |
|
|
|
3,746 |
|
Diluted |
|
|
4,043 |
|
|
|
3,834 |
|
|
|
4,029 |
|
|
|
3,746 |
|
Selected Balance Sheet Data
($ in thousands)
|
|
December 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Cash and cash
equivalents |
|
$ |
2,772 |
|
|
$ |
2,321 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
14,122 |
|
|
|
16,510 |
|
Total current liabilities |
|
|
18,233 |
|
|
|
17,292 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
45,681 |
|
|
|
51,540 |
|
Total liabilities |
|
|
28,228 |
|
|
|
29,847 |
|
Total stockholders’
deficit |
|
|
(29,083 |
) |
|
|
(4,479 |
) |
Selected Cash Flow Data
($ in thousands)
|
|
For the Years Ended |
|
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
Net loss |
|
$ |
(26,451 |
) |
|
$ |
(26,740 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in operating
activities |
|
$ |
(14,579 |
) |
|
$ |
(18,957 |
) |
Net cash used in investing
activities |
|
|
(1,575 |
) |
|
|
(13,947 |
) |
Net cash provided by financing
activities |
|
|
16,605 |
|
|
|
29,157 |
|
Change in cash and cash
equivalents |
|
|
451 |
|
|
|
(3,747 |
) |
Cash and equivalents,
Beginning |
|
|
2,321 |
|
|
|
6,068 |
|
Cash and equivalents,
Ending |
|
$ |
2,772 |
|
|
$ |
2,321 |
|
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)
|
|
Quarters Ended |
|
|
Years Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Loss from continuing
operations (GAAP Basis) |
|
$ |
(8,087 |
) |
|
$ |
(10,625 |
) |
|
$ |
(26,201 |
) |
|
$ |
(26,652 |
) |
Bad debt expense |
|
|
335 |
|
|
|
- |
|
|
|
585 |
|
|
|
499 |
|
Acquisition related
expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,534 |
|
Receipt of HHS stimulus
grant |
|
|
- |
|
|
|
- |
|
|
|
(650 |
) |
|
|
- |
|
Transition expenses |
|
|
1,780 |
|
|
|
- |
|
|
|
2,578 |
|
|
|
836 |
|
Legal and professional
services |
|
|
- |
|
|
|
- |
|
|
|
495 |
|
|
|
- |
|
Depreciation and
amortization |
|
|
1,399 |
|
|
|
1,360 |
|
|
|
5,501 |
|
|
|
4,524 |
|
Stock-based compensation |
|
|
861 |
|
|
|
289 |
|
|
|
2,242 |
|
|
|
1,535 |
|
Taxes |
|
|
10 |
|
|
|
(47 |
) |
|
|
53 |
|
|
|
(28 |
) |
Interest accretion
expense |
|
|
135 |
|
|
|
109 |
|
|
|
549 |
|
|
|
440 |
|
Mark to market on warrant
liability |
|
|
1 |
|
|
|
(244 |
) |
|
|
(61 |
) |
|
|
(279 |
) |
Change in fair value of
contingent consideration |
|
|
(489 |
) |
|
|
(44 |
) |
|
|
(489 |
) |
|
|
(44 |
) |
Adjusted EBITDA |
|
$ |
(4,055 |
) |
|
$ |
(9,202 |
) |
|
$ |
(15,398 |
) |
|
$ |
(16,635 |
) |
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