- Q3 Financial Highlights:
- Total revenue was $22.4 million
- SaaS revenue was $18.3 million, up 15% from Q3 2018
- Total gross margin increased to 63% from 50% in Q3
2018
- Company was cash flow positive, with cash growing by $2.3
million from Q2 2019 to $9.3 million at Q3 2019
- Software and Service business: in Q3, Eviti acquired one new
customer and renewed two customer contracts for a total contract
value exceeding $40 million
NantHealth, Inc. (NASDAQ-GS: NH), a next-generation,
evidence-based, personalized healthcare company, today reported
financial results for its third quarter ended September 30,
2019.
“For the 2019 third quarter, the top line for our SaaS business
grew significantly over the same quarter last year,” said Bob
Petrou, Chief Financial Officer, NantHealth. “This performance,
largely driven by an expanding customer base and increasing number
of covered lives, demonstrates the integral role NantHealth’s SaaS
solutions play in providing a continuum of care for payers,
providers and, most importantly, the patients we serve. At the
companywide level, we have made great progress managing our
financial performance and growing gross margin, all resulting in
reduced cash burn and enhanced bottom line results.”
Software and Services Q3 Highlights:
- Clinical Decision Support (Eviti®):
- Renewed a partnership contract with a leading provider of
clinical solutions. The contract has a three-year term and a
minimum estimated total value of $38.4 million
- Signed an agreement with Wexford Health Sources, one of the
nation’s largest correctional healthcare companies, bringing
evidence-based standards and value-based oncology care to
patients
- Renewed an agreement with a large national health plan for
federal employees, retirees and their families. Plan members will
continue to receive streamlined preauthorization of cancer
care
- Launched several enhancements designed to provide payers with
additional information about care management, including the
intended use of brand name drugs and visibility into settings where
care is provided. Payers with multiple plans can now permit their
users to view multiple dashboards, which saves time by reducing the
need for multiple logins and passwords
- Received full accreditation from URAC for the Eviti platform.
Eviti continues to meet URAC Health Utilization Management
standards, valid through September 1, 2022. The designation
recognizes those companies abiding by evidence-based standards and
value-based care
- Payer Engagement (NaviNet®):
- Added NaviNet’s Authorization Attachment application to the
NaviNet implementation for one of the nation’s largest health
insurance organizations. This feature ensures providers receive the
right supporting documentation to make more informed, timely
decisions
- Expanded NaviNet Open functionality to provide additional
notifications within the Authorization application, enabling users
to receive information timely and respond quickly to critical
requests, eliminating potential delays in caring for patients
- NaviNet’s AllPayer product completed the conversion of 3,602
provider offices, more than 80% of AllPayer customers, from a
legacy pricing model which will result in more than $1.0 million of
additional annual recurring revenue
- Connected Care (VCX, DCX):
- Introduced VCX 3.0 (formerly VitalsConX), designed to reduce
patient overstays and facilitate faster decision making. VCX 3.0
accelerates automated vital sign capture and provides easy entry of
other customized observations at the point of care. Updates include
streamlined data validation and a touch-based user interface to
document vital signs quickly and easily. VCX 3.0 now supports
“smart” patient vital sign monitors, including GE VC150
- Announced new Shuttle cable features to help improve data
collection, efficiency and accuracy using a medical-grade
serial-to-USB interface cable
- Signed a contract with Baxter expanding DCX (formerly
DeviceConX) medical device driver development, enabling Baxter to
connect additional devices to electronic medical record (EMR)
systems.
- In Q4, at the HIMSS Asia Pacific 2019 meeting, NantHealth led
the Interoperability Showcase along with GE Healthcare, AirStrip
and iProcedures. Together, the companies showcased how clinicians
can spend less time on documentation and more time analyzing data
in near real-time to improve patient outcomes
Sequencing and Molecular Analysis – Highlights:
- Presented a poster on GPS Cancer at the IASLC (World Lung)
meeting in Barcelona. Dr. Hossein Borghaei, Fox Chase Cancer
Center, and authors from NantHealth and NantOmics, presented a
poster, “222 NSCLC’s Classified by PAM50: Luminal A NSCLC Is a
Distinct Subtype with Low TMB and Immune Suppressive TME.” The
poster concludes NantHealth and NantOmics can use GPS Cancer to
identify a unique subset of patients who are likely to be resistant
to conventional immune checkpoint inhibitor therapy, using a method
that has not previously been well characterized in this clinical
setting
- Presented a poster at the European Society for Medical Oncology
(ESMO) meeting. NantHealth and NantOmics, together with
investigators from Moffitt Cancer Center, presented a poster,
“Differential expression of immunoregulatory molecules and
highly-associated cancer genes may provide novel insights into
strategic trial design for therapeutics.” The poster describes
novel associations of immune checkpoint gene expression with cancer
related genomic mutations beyond Tumor Mutation Burden (TMB) as a
biomarker for immunotherapy response
Business and Financial Highlights
- For the 2019 third quarter, total net revenue was $22.4
million, compared with $22.3 million in the 2018 third quarter. On
June 7, 2019, the Company completed the divestiture of its home
health care services business. Accordingly, financial results for
the 2019 third quarter do not include the results of operations
from this business, which over the last year averaged approximately
$1.5 million of revenue per quarter.
- Gross profit increased to $14.0 million, or 63% of total net
revenue, compared with $11.1 million, or 50% of total net revenue,
for the prior year period. The increase was primarily driven by
continued growth of the Company’s higher margin SaaS business and
overall cost management.
- Selling, general and administrative expenses declined to $15.1
million from $17.0 million in 2018 third quarter. The decrease was
mainly driven by ongoing cost management efforts and efficiencies
in overall processes.
- Research and development expenses decreased to $4.6 million
from $4.8 million.
- Net loss from continuing operations, net of tax, was $16.4
million, or $0.15 per share, compared with $97.5 million, or $0.89
per share, for the 2018 third quarter.
- On a non-GAAP basis, net loss from continuing operations was
$7.4 million, or $0.07 per share, down from $10.8 million, or $0.10
per share, for the third quarter of last year. The improvement
reflects the company’s ongoing efforts to manage costs, growth of
its SaaS business and efficiencies and process improvements.
- At September 30, 2019, cash and cash equivalents totaled $9.3
million, an increase of $2.3 million from June 30, 2019.
Conference Call Information and Forward-Looking
Statements
Thursday, November 7, 2019, after market close, the company will
host a conference call at 1:30 p.m. PT (4:30 p.m. ET) to review its
results of operations for the third quarter ended September 30,
2019. The conference call will be available to interested parties
by dialing 844-309-3709 from the U.S. or Canada, or 281-962-4864
from international locations, passcode 3294717. The call will be
broadcast via the Internet at www.nanthealth.com. Listeners are
encouraged to visit the website at least 10 minutes prior to the
start of the scheduled presentation to register, download and
install any necessary audio software. A playback of the call will
be archived and accessible on the same website for at least three
months.
Discussion during the conference call may include
forward-looking statements regarding topics such as the company’s
financial status and performance, regulatory and operational
developments, and other comments the company may make about its
future plans or prospects in response to questions from
participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial
measures, including adjusted net loss and adjusted net loss per
share, which are financial measures that are not prepared in
conformity with United States generally accepted accounting
principles (U.S. GAAP). The Company’s management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor’s overall understanding of the
financial results for the Company’s core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company’s core business between current, past and future
periods. Other companies may define these measures in different
ways. Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S. GAAP.
Non-GAAP per share numbers are calculated based on one class of
common stock and do not incorporate the effects, if any, of using
the two-class method.
About NantHealth, Inc.
NantHealth, a member of the NantWorks ecosystem of companies,
provides leading solutions across the continuum of care for
physicians, payors, patients and biopharmaceutical organizations.
NantHealth enables the use of cutting-edge data and technology
toward the goals of empowering clinical decision support and
improving patient outcomes. NantHealth’s comprehensive product
portfolio combines the latest technology in payor/provider
platforms that exchange information in near-real time (NaviNet and
Eviti), connected care solutions that deliver medical device
interoperability (DCX device connectivity platform and VCX patient
vitals software) and molecular profiling services that combine
comprehensive DNA & RNA tumor-normal profiling with
pharmacogenomics analysis (GPS Cancer®). For more information,
please visit www.nanthealth.com or
follow us on Twitter, Facebook and LinkedIn.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Forward-looking statements can be identified by the
words “expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. Risks and uncertainties include, but are not limited to: our
ability to successfully integrate a complex learning system to
address a wide range of healthcare issues; our ability to
successfully amass the requisite data to achieve maximum network
effects; appropriately allocating financial and human resources
across a broad array of product and service offerings; raising
additional capital as necessary to fund our operations; achieving
significant commercial market acceptance for our sequencing and
molecular analysis solutions; establish relationships with, key
thought leaders or payers’ key decision makers in order to
establish GPS Cancer as a standard of care for patients with
cancer; our ability to grow the market for our Systems
Infrastructure, and applications; successfully enhancing our
Systems Infrastructure and applications to achieve market
acceptance and keep pace with technological developments; customer
concentration; competition; security breaches; bandwidth
limitations; our ability to continue our relationship with
NantOmics; our ability to obtain regulatory approvals; dependence
upon senior management; the need to comply with and meet applicable
laws and regulations; unexpected adverse events; clinical adoption
and market acceptance of GPS Cancer; and anticipated cost savings.
We undertake no obligation to update any forward-looking statement
in light of new information or future events, except as otherwise
required by law. Forward-looking statements involve inherent risks
and uncertainties, most of which are difficult to predict and are
generally beyond our control. Actual results or outcomes may differ
materially from those implied by the forward-looking statements as
a result of the impact of a number of factors, many of which are
discussed in more detail in our reports filed with the Securities
and Exchange Commission.
NantHealth, Inc. Consolidated Balance Sheets (Dollars
in thousands)
September 30, 2019 December 31,
2018 (Unaudited)
Assets Current assets Cash and cash
equivalents
$ 9,326
$ 18,305
Accounts receivable, net
10,948
15,286
Inventories
202
496
Related party receivables, net
1,047
1,007
Prepaid expenses and other current assets
23,670
4,350
Total current assets
45,193
39,444
Property, plant, and equipment, net
16,351
22,978
Goodwill
115,930
115,930
Intangible assets, net
54,045
64,703
Investment in related party
33,612
40,000
Related party receivable, net of current
1,029
1,611
Operating lease right-of-use assets
10,353
— Other assets
1,903
1,671
Total assets
$ 278,416
$ 286,337
Liabilities and Stockholders' Equity (Deficit)
Current liabilities Accounts payable
$ 2,912
$ 1,650
Accrued and other current liabilities
35,044
13,832
Deferred revenue
17,792
16,263
Related party payables, net
3,771
4,791
Notes payable
946
— Total current liabilities
60,465
36,536
Deferred revenue, net of current
2,764
6,704
Related party liabilities
22,583
17,708
Related party promissory note
112,666
112,666
Related party convertible note, net
8,736
8,378
Convertible notes, net
83,281
79,433
Operating lease liabilities
11,418
— Other liabilities
23,080
22,081
Total liabilities
324,993
283,506
Stockholders' equity (deficit) Common stock, $0.0001 par
value per share, 750,000,000 shares authorized; 110,619,906 and
109,491,277 shares issued and outstanding at September 30, 2019 and
December 31, 2018, respectively
11
11
Additional paid-in capital
888,994
887,289
Accumulated deficit
(935,135
)
(884,122
)
Accumulated other comprehensive loss
(447
)
(347
)
Total stockholders' (deficit) equity
(46,577
)
2,831
Total liabilities and stockholders' equity (deficit)
$ 278,416
$ 286,337
NantHealth, Inc.
Consolidated Statements of
Operations
(Dollars in thousands, except per
share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Total net revenue
$ 22,356
$ 22,292
$ 71,771
$ 66,603
Total cost of revenue
8,372
11,226
29,478
32,878
Gross Profit
13,984
11,066
42,293
33,725
Operating Expenses: Selling, general and
administrative
15,136
17,001
47,101
56,123
Research and development
4,568
4,835
14,232
15,875
Amortization of acquisition-related assets
1,054
1,054
3,163
3,163
Impairment of intangible assets — —
3,977
— Total operating expenses
20,758
22,890
68,473
75,161
Loss from operations
(6,774
)
(11,824
)
(26,180
)
(41,436
)
Interest expense, net
(4,556
)
(4,306
)
(13,443
)
(12,766
)
Other (expense) income, net
(3,588
)
226
(5,039
)
(928
)
Loss from related party equity method investment
(1,983
)
(83,306
)
(6,401
)
(89,512
)
Loss from continuing operations before income taxes
(16,901
)
(99,210
)
(51,063
)
(144,642
)
Benefit from income taxes
(527
)
(1,778
)
(168
)
(3,429
)
Net loss from continuing operations
(16,374
)
(97,432
)
(50,895
)
(141,213
)
Loss from discontinued operations, net of tax
(3
)
(32
)
(118
)
(1,817
)
Net loss
$ (16,377
)
$ (97,464
)
$ (51,013
)
$ (143,030
)
Net loss per share: Continuing operations Basic and
diluted - common stock
$ (0.15
)
$ (0.89
)
$ (0.46
)
$ (1.29
)
Discontinued operations Basic and diluted - common stock $ —
$ — $ —
$ (0.02
)
Total net loss per share Basic and diluted - common stock
$ (0.15
)
$ (0.89
)
$ (0.46
)
$ (1.31
)
Weighted average shares outstanding: Basic and
diluted - common stock
110,619,905
109,471,712
110,261,279
109,060,408
NantHealth, Inc.
Supplemental Revenue
Schedule
(Dollars in thousands)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Revenue: Software-as-a-service related
$18,328
$15,937
$54,421
$48,323
Software and hardware related
1,009
1,450
5,135
3,790
Maintenance
2,743
2,522
7,771
7,357
Total software-related revenue
22,080
19,909
67,327
59,470
Sequencing and molecular analysis
276
742
1,581
2,506
Home health care services —
1,641
2,863
4,627
Total net revenue
$22,356
$22,292
$71,771
$66,603
Cost of Revenue: Software-as-a-service related
$ 5,659
$ 5,863
$17,155
$18,205
Software and hardware related
624
737
2,203
2,412
Maintenance
484
234
1,065
683
Amortization of developed technologies
1,143
1,233
3,519
3,700
Total software-related cost of revenue
7,910
8,067
23,942
25,000
Sequencing and molecular analysis
462
2,323
4,065
5,443
Home health care services —
836
1,471
2,435
Total cost of revenue
$ 8,372
$11,226
$29,478
$32,878
NantHealth, Inc.
Non-GAAP Net Loss from
Continuing Operations and Non-GAAP Net Loss Per Share from
Continuing Operations
(Dollars in thousands, except per
share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net loss from continuing operations
$ (16,374
)
$ (97,432
)
$ (50,895
)
$ (141,213
)
Adjustments to GAAP net loss: Loss from related party equity method
investment
1,983
83,306
6,401
89,512
Stock-based compensation expense from continuing operations
526
373
1,849
4,805
Acquisition related sales incentive —
425
—
995
Change in fair value of derivatives liability —
(5
)
—
(7
)
Change in fair value of Bookings Commitment
3,159
—
4,664
— Impairment of investment in IOBS — — —
1,750
Noncash interest expense related to convertible notes
1,447
1,273
4,207
3,702
Intangible amortization from continuing operations
2,197
2,287
6,682
6,863
Impairment of intangible assets — —
3,977
— Loss on sale of business — —
582
— Securities litigation costs
500
887
500
1,709
Tax benefit resulting from certain noncash tax items
(885
)
(1,943
)
(519
)
(3,649
)
Total adjustments to GAAP net loss from continuing operations
8,927
86,603
28,343
105,680
Net loss from continuing operations - Non-GAAP
$ (7,447
)
$ (10,829
)
$ (22,552
)
$ (35,533
)
Weighted average shares outstanding
110,619,905
109,471,712
110,261,279
109,060,408
Net loss per share from continuing operations -
Non-GAAP
$ (0.07
)
$ (0.10
)
$ (0.20
)
$ (0.33
)
Reconciliation of Net Loss per Common Share from
Continuing Operationsto Net Loss per Common Share from Continuing
Operations - Non-GAAP (Unaudited):
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net loss per common share from continuing operations
$ (0.15
)
$ (0.89
)
$ (0.46
)
$ (1.29
)
Adjustments to GAAP net loss per common share from continuing
operations: Loss from related party equity method investment
0.03
0.77
0.05
0.82
Stock-based compensation expense from continuing operations — —
0.02
0.04
Acquisition related sales incentive — — —
0.01
Change in fair value of derivatives liability — — — — Change in
fair value of Bookings Commitment
0.03
—
0.04
— Impairment of Investment in IOBS — — —
0.02
Noncash interest expense related to convertible notes
0.01
0.01
0.04
0.03
Intangible amortization from continuing operations
0.02
0.02
0.06
0.05
Impairment of intangible assets — —
0.04
— Loss on sale of business — —
0.01
— Securities litigation costs —
0.01
—
0.02
Tax benefit resulting from certain noncash tax items
(0.01
)
(0.02
)
—
(0.03
)
Total adjustments to GAAP net loss per common share from continuing
operations
0.08
0.79
0.26
0.96
Net loss per common share from continuing operations -
Non-GAAP
$ (0.07
)
$ (0.10
)
$ (0.20
)
$ (0.33
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107006072/en/
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com
424.288.4098
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