Invitae Reports $56.5 Million in Quarterly Revenue Driven by 129,000 Samples
SAN FRANCISCO, Nov. 6, 2019 /PRNewswire/ -- Invitae Corporation (NYSE: NVTA), a leading medical genetics company, today announced financial and operating results for the third quarter ended September 30, 2019.
"With our 26(th) consecutive quarter of dynamic growth, we continue to demonstrate our ability to grow the business while investing in the technologies necessary to drive the transformation of genetics," said Sean George, co-founder and chief executive officer of Invitae. "Based on how we are tracking toward our guidance and our demonstrated ability to take share and more importantly expand the market, we believe that we are driving forward as the clear leader in offering comprehensive, medical genetic information at affordable prices access all stages of life."
Third Quarter 2019 Financial Results
-- Accessioned more than 129,000 samples in the third quarter of 2019,
representing a 65% increase over the 78,000 samples in the third quarter
of 2018. Billable volume was approximately 124,000 in the third quarter
of 2019
-- Generated revenue of $56.5 million in the third quarter of 2019,
representing a 51% increase over the third quarter of 2018 revenue of
$37.4 million
-- Reported the average cost per sample at $249 in the third quarter of
2019, representing a 5% reduction from a $262 average cost per sample in
the third quarter of 2018
-- Achieved gross profit of $24.4 million in the third quarter of 2019
compared to $16.9 million of gross profit in the third quarter of 2018
Total operating expense, which excludes cost of revenue, for the third quarter of 2019 was $101.4 million (non-GAAP operating expense of $79.8 million) compared to $47.0 million for the third quarter of 2018.
For the third quarter of 2019, Invitae reported a net loss of $78.7 million, or a $0.82 loss per share, compared to a net loss of $31.7 million in the third quarter of 2018, or a $0.45 net loss per share. Non-GAAP net loss was $65.8 million in the third quarter of 2019, or a $0.69 non-GAAP net loss per share.
As of September 30, 2019, cash, cash equivalents, restricted cash, and marketable securities totaled $473.5 million. Net increase in cash, cash equivalents and restricted cash for the quarter was $220.0 million. Cash burn for the quarter was $140.0 million ($40.3 million excluding financing and acquisition-related items), and includes $85.6 million to repay Oberland (which includes $1.3 million of accrued interest on our third quarter 2019 quarterly interest payment) and $15.4 million in Jungla acquisition-related payments.
Invitae's Corporate and Scientific Highlights
-- Acquired Jungla Inc. and its cloud-based platform that further enhances
Invitae's genetic variant interpretation and ability to deliver
high-quality, more affordable genetic testing
-- Signed contract with Cigna, effective December 1, 2019. Invitae is now
in contract with all national commercial health plans and has
approximately 295 million covered lives in network
-- Extended Invitae's genome network with the addition of nine new
biopharma partnerships and launched five Detect programs
-- Expanded the Behind The Seizure program, which now offers
comprehensive epilepsy panel testing to any child up to 59 months
old who has one unprovoked seizure in the U.S. and Canada
-- Signed Abeona as the first biopharma partner as part of the Detect
program for patients with lysosomal storage disorders
-- Partnered with the University of Vermont Health Network on a testing
program to offer proactive genetic screening as part of routine clinical
care for patients in Vermont
-- Presented various studies and research at The American Society of Human
Genetics (ASHG) Annual Meeting:
-- Presented a study on the limitations of a direct-to-consumer genetic
screening strategy for hereditary breast, ovarian, and colorectal
cancer risk which found the vast majority of individuals with a
disease-causing mutation in MUTYH and BRCA1/2 would have been missed
by direct-to-consumer testing, with actual disease-causing mutations
being missed in nearly 100% of people of certain ancestries
-- Highlighting research at the National Society of Genetic Counselors
(NSGC) 37th Annual Conference to help push forward the science and
practice of genetics in patient care
-- Presenting studies highlighting the potential of genetic testing to
increase early diagnosis of pediatric epilepsy, along with
presentations underscoring the importance of high quality medical
genetic testing and genetic counseling services as consumer use of
genetic health screening continues to grow
-- Partnering with NSGC to present the 4th annual Code Talker award to
honor excellence in genetic counseling patient care as recognized by
patients themselves at the conference
-- Closed on $350.0 million in convertible senior notes in an upsized
offering and raised $19.5 million of net proceeds under our ATM
Webcast and Conference Call Details
Management will host a conference call and webcast today at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss financial results and recent developments. The dial-in numbers for the conference call are (866) 393-4306 for domestic callers and (734) 385-2616 for international callers, and the reservation number for both is 9085356. Following prepared remarks, management will respond to questions from investors and analysts, subject to time limitations.
The live webcast of the call and slide deck may be accessed by visiting the investors section of the company's website at ir.invitae.com. A replay of the webcast and conference call will be available shortly after the conclusion of the call and will be archived on the company's website.
About Invitae
Invitae Corporation (NYSE: NVTA) is the leading advanced medical genetics company, whose mission is to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people. Invitae's goal is to aggregate the world's genetic tests into a single service with higher quality, faster turnaround time, and lower prices. For more information, visit the company's website at invitae.com.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company's financial results for the quarter ended September 30, 2019; the company's beliefs regarding estimated guidance for 2019 and future financial performance; the anticipated effective date of the Cigna contract; the impact of the company's acquisitions, partnerships and product offerings; and the company's beliefs regarding the growth of its business, its position and impact on the genetic testing industry, its success in executing on its mission and achieving its goals, and the benefits of genetic testing. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: the actual results for the quarter ended September 30, 2019 and the year ending December 31, 2019; the company's ability to continue to grow its business; the company's history of losses; the company's ability to compete; the company's failure to manage growth effectively; the company's need to scale its infrastructure in advance of demand for its tests and to increase demand for its tests; the risk that the company may not obtain or maintain sufficient levels of reimbursement for its tests; the company's failure to successfully integrate or fully realize the anticipated benefits of acquired businesses; the company's ability to use rapidly changing genetic data to interpret test results accurately and consistently; security breaches, loss of data and other disruptions; laws and regulations applicable to the company's business; and the other risks set forth in the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2019. These forward-looking statements speak only as of the date hereof, and Invitae Corporation disclaims any obligation to update these forward-looking statements.
Non-GAAP Financial Measures
To supplement Invitae's consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP), the company is providing non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating expense, non-GAAP net loss and net loss per share and cash burn, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-GAAP financial measures are useful to investors in evaluation the company's ongoing operating results and trends.
Non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP operating expense and non-GAAP net loss exclude acquisition-related stock-based compensation related to inducement grants, post-combination expense related to the acceleration of equity grants in connection with the company's business combinations, and acquisition-related income tax benefits. These non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on the reported financial results. Management accounts for this limitation by analyzing results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in the company's public disclosures.
Cash burn excludes (1) changes in marketable securities other than investments made in privately held companies, (2) cash received from equity financings, including proceeds from a public offering of common stock in March 2019, (3) net cash received from proceeds from term debt or convertible senior notes, and (4) cash received from exercises of warrants. Management believes cash burn is a liquidity measure that provides useful information to management and investors about the amount of cash consumed by the operations of the business. A limitation of using this non-GAAP measure is that cash burn does not represent the total change in cash, cash equivalents, and restricted cash for the period because it excludes cash provided by or used for other operating, investing or financing activities. Management accounts for this limitation by providing information about the company's operating, investing and financing activities in the statements of cash flows in the consolidated financial statements in the company's most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting net cash provided by (used in) operating, investing and financing activities as well as the net increase or decrease in cash, cash equivalents and restricted cash in its reconciliation of cash burn.
In addition, other companies, including companies in the same industry, may not use cash burn, non-GAAP research and development and general and administrative expense, non-GAAP operating expense, non-GAAP net loss, or non-GAAP net loss per share or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP measures as comparative measures. Because of these limitations, the company's non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the non-GAAP reconciliations provided in the tables below.
INVITAE CORPORATION
Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30, December 31,
2019 2018
---
Assets
Current assets:
Cash and cash equivalents $
467,012 $
112,158
Marketable securities 300 13,727
Accounts receivable 26,740 26,296
Prepaid expenses and other current assets 14,477 13,258
Total current assets 508,529 165,439
Property and equipment, net 32,177 27,886
Operating lease assets 39,112
Restricted cash 6,183 6,006
Intangible assets, net 99,740 30,469
Goodwill 99,851 50,095
Other assets 4,795 3,064
Total assets $
790,387 $
282,959
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $
8,863 $
7,812
Accrued liabilities 53,251 26,563
Operating lease obligations 5,186
Finance lease obligations 1,636 1,937
Total current liabilities 68,936 36,312
Operating lease obligations, net of current portion 44,408
Finance lease obligations, net of current portion 168 1,375
Debt - 74,477
Convertible senior notes, net 265,194
Other long-term liabilities 7,800 8,956
Total liabilities 386,506 121,120
Stockholders' equity:
Common stock 10 8
Accumulated other comprehensive loss - (5)
Additional paid-in capital 1,085,643 678,548
Accumulated deficit (681,772) (516,712)
Total stockholders' equity 403,881 161,839
Total liabilities and stockholders' equity $
790,387 $
282,959
INVITAE CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Revenue:
Test revenue $
55,502 $
36,611 $
147,423 $
100,014
Other revenue 1,009 755 3,116 2,329
Total revenue 56,511 37,366 150,539 102,343
Cost of revenue 32,120 20,441 81,380 58,964
Research and development 46,951 15,776 90,247 46,926
Selling and marketing 32,690 17,591 87,662 55,222
General and
administrative 21,733 13,668 56,326 37,884
Loss from operations (76,983) (30,110) (165,076) (96,653)
Other income (expense),
net (7,591) 231 (5,572) 2,066
Interest expense (2,833) (1,844) (7,062) (4,927)
Net loss before taxes (87,407) (31,723) (177,710) (99,514)
Income tax benefit (8,700) (12,650)
Net loss $
(78,707) $
(31,723) $
(165,060) $
(99,514)
Net loss per share,
basic and diluted $
(0.82) $
(0.45) $
(1.86) $
(1.56)
Shares used in computing
net loss per share,
basic and diluted 95,577 70,153 88,663 63,935
INVITAE CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September 30,
2019 2018
---
Cash flows from operating activities:
Net loss $
(165,060) $
(99,514)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and
amortization 11,135 10,268
Stock-based compensation 47,826 15,711
Amortization of debt
discount and issuance
costs 855 681
Impairment losses - 1,883
Benefit from income taxes (12,650)
Debt extinguishment costs 8,926
Other 901 626
Changes in operating assets and liabilities,
net of businesses acquired:
Accounts receivable (444) (4,483)
Prepaid expenses and other
current assets (1,424) (1,060)
Other assets 2,369 (555)
Accounts payable 87 (1,226)
Accrued expenses and other
liabilities 9,692 922
Net cash used in operating
activities (97,787) (76,747)
Cash flows from investing activities:
Purchases of marketable
securities (20,781) (1,575)
Proceeds from sales of
marketable securities - 19,965
Proceeds from maturities of
marketable securities 34,500 10,957
Acquisition of businesses,
net of cash acquired (9,801)
Purchases of property and
equipment (13,530) (4,258)
Other - (500)
Net cash provided by (used
in) investing activities (9,612) 24,589
Cash flows from financing activities:
Proceeds from public
offerings of common stock,
net 204,024 112,480
Proceeds from issuance of
common stock, net 5,734 10,732
Proceeds from issuance of
convertible senior notes,
net 339,900
Proceeds from issuance of
debt, net - 19,544
Payments of debt
extinguishment costs (10,638)
Loan payments (75,000)
Finance lease principal
payments (1,590) (1,632)
Net cash provided by
financing activities 462,430 141,124
Net increase in cash, cash
equivalents and restricted
cash 355,031 88,966
Cash, cash equivalents and
restricted cash at
beginning of period 118,164 17,459
Cash, cash equivalents and
restricted cash at end of
period $
473,195 $
106,425
INVITAE CORPORATION
Reconciliation of GAAP to Non-GAAP Research and Development Expense
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
Research and development $
46,951 $
15,776 $
90,247 $
46,926
Acquisition-related
stock-based
compensation (18,613) (21,199)
Non-GAAP research and
development $
28,338 $
15,776 $
69,048 $
46,926
Reconciliation of GAAP to Non-GAAP General and Administrative Expense
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
General and
administrative $
21,733 $
13,668 $
56,326 $
37,884
Acquisition-related
post-combination
expense (2,946) (6,158)
Non-GAAP general and
administrative $
18,787 $
13,668 $
50,168 $
37,884
Reconciliation of Operating Expense to Non-GAAP Operating Expense
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---
2019 2018 2019 2018
---
Research and development $
46,951 $
15,776 $
90,247 $
46,926
Selling and marketing 32,690 17,591 87,662 55,222
General and
administrative 21,733 13,668 56,326 37,884
Operating expense 101,374 47,035 234,235 140,032
Acquisition-related
stock-based
compensation (18,613) (21,199)
Acquisition-related
post-combination
expense (2,946) (6,158)
Non-GAAP operating
expense $
79,815 $
47,035 $
206,878 $
140,032
Reconciliation of Net Loss to Non-GAAP Net Loss Per Share
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2019 2018 2019 2018
---
Net loss $
(78,707) $
(31,723) $
(165,060) $
(99,514)
Acquisition-related
stock-based
compensation 18,613 21,199
Acquisition-related
post-combination
expense 2,946 6,158
Acquisition-related
income tax benefit (8,700) (12,650)
Non-GAAP net loss $
(65,848) $
(31,723) $
(150,353) $
(99,514)
Non-GAAP net loss per
share, basic and diluted $
(0.69) $
(0.45) $
(1.70) $
(1.56)
Shares used in computing
net loss per share,
basic and diluted 95,577 70,153 88,663 63,935
INVITAE CORPORATION
Reconciliation of Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash to Cash Burn
(in thousands)
(unaudited)
Three Months Three Months Three Months Nine Months
Ended March Ended June 30, Ended Ended
31, 2019 2019 September 30, September 30,
2019 2019
---
Net cash used in
operating
activities $
(28,366) $
(32,725) $
(36,696) $
(97,787)
Net cash provided
by (used in)
investing
activities (17,545) 25,133 (17,200) (9,612)
Net cash provided
by financing
activities 186,120 2,462 273,848 462,430
Net increase
(decrease) in
cash, cash
equivalents and
restricted cash 140,209 (5,130) 219,952 355,031
Adjustments:
Purchases of
investments 20,781 20,781
Maturities of
investments (6,000) (28,000) (500) (34,500)
Proceeds from
public offering
of common stock,
net of issuance
costs (184,490) (19,534) (204,024)
Proceeds from
issuance of
convertible
senior notes, net - (339,900) (339,900)
Proceeds from
exercises of
warrants (88) (25) (58) (171)
Cash burn $
(29,588) $
(33,155) $
(140,040) $
(202,783)
-- Cash burn for
the three
and nine
months ended
September
30, 2019
includes
$85.6
million of
cash paid to
settle our
obligations
under the
2018 Note
Purchase
Agreement
(which
includes
$1.3 million
of accrued
interest on
the third
quarter 2019
quarterly
interest
payment) and
$15.4
million paid
in
connection
with the
acquisition
of Jungla
Inc.
Contact:
Laura D'Angelo
ir@invitae.com
(628) 213-3369
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