Sneaky COVID news in their release. Nice move up coming here. Read the highlighted below
IDXG 7.75 April 22 2020 - 04:05PM
GlobeNewswire Inc. Print
Interpace Biosciences, Inc. (Nasdaq: IDXG) today announced financial results for the fiscal year ended December 31, 2019 and provided a business and financial update.
“Fiscal 2019 was a transformational year for us as we acquired the Biopharma business of Cancer Genetics in July and raised over $47 million from sophisticated laboratory private equity investors in 2019 and early 2020. We believe that the combination of our clinical services and acquired pharma services uniquely positions us for growth and expansion in the fast-growing biopharma sector where we can provide our unique diagnostic capabilities to a broad customer base.” said CEO Jack Stover. “We believe that our accomplishments this year have supported our aggressive growth plans and also de-risked our business during these uncertain times,” added Mr. Stover.
2019 Business and Financial Highlights
Acquired the BioPharma business of Cancer Genetics (CGI) in July 2019, which contributed $6.7 million in net revenue in 2019.
Net Revenue was $24.1 million for fiscal 2019, a 10% increase over fiscal 2018 Net Revenue of $21.9 million. Net Revenue included approximately $8.7 million reserve in accounts receivable, $3.5 million related to 2018 billings and $5.2 million related to 2019 billings.
The $5.2 million reserve related to 2019 billings was recorded as a reduction of Net Revenue to reflect collectability concerns of the 2019 year-end receivables. Collections of these, reserved for 2019 billings in 2020, if any, will be recorded in Net Revenue at that time.
Gross profit for fiscal 2019 year was 34% as compared to 53% in fiscal 2018. Fiscal 2019 margins were negatively impacted by the carve out and transition of the pharma solutions business from CGI and the $5.2 million reserve.
Raised over $47 million of long-term capital from sophisticated laboratory private equity investors through January 2020 which will be included in total stockholders’ equity beginning in the first quarter of 2020.
Fourth Quarter 2019 Financial Highlights
Net Revenue for the fourth quarter of 2019 was $4.1 million, a reduction of 30% from the prior year fourth quarter. 2019 fourth quarter revenue included a $5.2 million reserve against prior quarters’ outstanding receivables which reduced Net Revenue for the quarter accordingly.
Year-end December 31, 2019 cash position of approximately $2.3 million and a total of $3.1 million of cash and availability.
First Quarter 2020 Preliminary Financial Highlights
Expect first quarter Net Revenue in the range of $8.8 million to $9.3 million.
Quarter-end March 31, 2020 cash position of approximately $14.5 million and a total of $16.8 million of cash and availability.
As of April 21, 2020, total cash and availability of approximately $18.4 million.
Cancer is relentless and we are committed to delivering critical answers to patients, even in the face of unprecedented challenges such as COVID-19. We believe we have taken all necessary precautions to safeguard our employees from the COVID-19 pandemic. Our labs are operational and all non-essential employees are on a work-from-home arrangement. However, there can be no assurance that key employees will not become ill or that we will be able to continue to operate our labs. We will continue to take all necessary actions to support our customers’ requirements and preserve the financial health of Interpace.
“The leadership team acted quickly to minimize business disruption and reduced spending in areas not critical to patient care to ensure we have the financial flexibility to meet patient needs. Further, we took immediate action to reduce lab and overhead support costs to match our physical needs. Actions include elimination of non-essential discretionary spending, temporary furlough of employees where activities were reduced, a hiring freeze, deferral of incentive bonuses anticipated to be paid in 2020 and a 10 to 15 percent reduction in base pay of all salaried employees including all members of our leadership team,” stated Jack Stover.
In response to customer interest we have acquired and installed processing equipment to perform serology antibody ELISA testing for COVID-19 at our CLIA lab in Pittsburgh, PA. We are in the process of validating processes while acquiring acceptable kits and reference samples and expect to be able to offer this testing to customers in the next several weeks.
“First quarter 2020 Net Revenue is expected to be in the range of $8.8 million to $9.3 million as compared to $6.0 million reported in the first quarter of 2019. In spite of our test volumes dropping throughout March 2020 due to the coronavirus pandemic, diagnostic average daily test volume increased approximately 25% and pharma services average daily testing volume increased approximately 64% when compared to the first quarter of 2019. However, March 2020 diagnostic average daily test volume declined approximately 27% from February 2020 and declined a further 56% for the period of April 1 through April 20, 2020. Alternatively, Pharma services revenue improved throughout the quarter and leading indicators, bookings and backlog point to a strong back half of 2020. However, we have seen a softening of demand in the near term as a result of our global footprint and testing activity through April 20, 2020 was down 19% relative to March.,” stated Fred Knechtel CFO Interpace.
Jack Stover added, “As we look at the remainder of 2020, in this uncertain time, I am very excited about our prospects:
We are an essential medical services business and therefore expect to remain open and able to serve our customers who handle critical cancer-related patient care and develop life-saving treatments;
We recently recognized a significant retroactive price increase in 2020 from Medicare for ThyraMIR® and we have been notified of a prospective price increase for ThyGeNEXT®;
We anticipate publishing a seminal paper on the clinical validity of the combination of ThyGeNEXT®/ThyraMIR®, our largest commercial products;
We have demonstrated our ability to reduce operating costs consistent with volume changes while continuing to integrate the Biopharma business we recently acquired;
Through March our pharma services sales pipeline reached record levels providing us confidence in our ability to ramp up this business as our customers reengage or expand clinical trials;
We have and will continue to add more contracted reimbursement coverage with private insurers, helping to support more timely and accurate payment of our tests;
We have made significant progress in streamlining and improving our billing processes to allow us to collect cash on a more timely and consistent basis.
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®. Below is a summary of the most important publications and presentations announced since the beginning of 2019:
Clinical Performance and Evidence
Acceptance of first paper demonstrating clinical performance of ThyGeNEXT® and ThyraMIR® ;
Publication of new data on Thyroid test utility, peer reviewed journal article and one textbook on clinical utility of ThyGeNEXT®;
Presentation of data on Thyroid performance at ATA in 3 separate posters;
Presentation at ACOG on PancraGEN®;
Announced data from our thyroid registry published in Diagnostic Cytology; and First independent publication of clinical utility of BarreGEN®.
Clinical Reimbursement Expansion
Reimbursement for our clinical diagnostics tests are the lifeblood of our business and critical to our ability to serve our diverse customer base. Below are our most important reimbursement accomplishments since the beginning of 2019:
Contract with Blue Cross/Blue Shield of Massachusetts for more than 2 million of their members;
Improvement for ThyraMIR’s® Medicare reimbursement from $1800 to $3000, retroactive to January 1, 2020;
New draft Medicare LCD for ThyGeNEXT® indicating a reimbursement increase of approximately $2400;
Contract with Blue Cross/Blue Shield of Michigan for ThyGeNEXT® and ThyraMIR® for their 6 million members;
Contract with Blue Cross/Blue Shield of California for ThyGeNEXT® and ThyraMIR® for their 4 million members;
Contract with 3 independent Blue Cross and Blue Shield plans for ThyGeNEXT® and ThyraMIR® in Alabama, Arkansas and Arizona that combine to serve 5 million members;
New agreement with Select Health for coverage of their 850,000 members;
New agreement with Independence Blue Cross for coverage of their 2.5 million members;
New coverage of our thyroid assays by Medica serving their 1.3 million members; and
Agreement with the University of Maryland Medical System serving its approximately 25,000 employees.
Other Business Announcements
Expanded our collaboration agreement with LabCorp® (NYSE: LH) to co-market our thyroid tests for an additional two years, through January 2022;
Announced strategic partnership with Genecast Biotechnology Co, Ltd. to support our global pharmaceutical and biotechnology clients with their testing needs in the Chinese market;
Entered into a research agreement with Predictive Oncology to evaluate enhancing diagnosis of thyroid cancer via AI driven analyses;
Our PA and CT labs received College of American Pathology (CAP) accreditation; and
Finalized validation of FFPE samples of ThyraMIR® and subsequently announced approval to launch ThyraMIR® on FFPE fixation in New York State.
Addition of Chairman of the Board, Robert Gorman
We are pleased to welcome Bob Gorman as our new Chairman of the Board. Bob has a tremendous amount of experience in helping to build successful laboratories and companies in our industry, having served in leadership roles with companies such as Quest Diagnostics and Eurofins Scientific Group. We look forward to Bob’s active involvement.
2020 Net Revenue Guidance
As a result of the uncertainty and potential impact of the coronavirus pandemic, we believe it is prudent to withdraw our previously announced annual revenue guidance for 2020.
CONFERENCE CALL INFORMATION
Interpace will hold a conference call and Webcast on Wednesday April 22, 2020, at 5:00 pm ET. Details are as follow:
Date and Time: Wednesday April 22, 2020 at 5:00 pm ET
Dial-in Number (Domestic): +1 (877) 407-9716
Dial-in Number (International): +1 (201) 493-6779
Confirmation Number: 13702580
Webcast Access: public.viavid.com/index.php?id=139379
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 a 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 vs. metastatic origin. In addition, BarreGEN® for Barrett’s Esophagus, is currently in a clinical evaluation program whereby we gather information from physicians using BarreGEN® to assist us in positioning the product for full launch, partnering and potentially supporting reimbursement with payers.
Pharma services, through Interpace Pharma Solutions, provides pharmacogenomics testing, genotyping, biorepository and other customized services to the pharmaceutical and biotech industries. Pharma services also advance 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, and improving patient care.
For more information, please visit Interpace Biosciences’ website at www.interpace.com.
