On August 6, 2020 NantHealth, Inc. (NASDAQ-GS: NH), a next-generation, evidence-based, personalized healthcare company, reported financial results for its second quarter ended June 30, 2020 (Press release, NantHealth, AUG 6, 2020, View Source [SID1234563045]).
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"In July, we completed the strategic acquisition of the OpenNMS Group, Inc., a company with the world’s premier open source network management software platform," said Ron Louks, Chief Operating Officer, NantHealth. "This is an exciting transaction for NantHealth because it expands and diversifies our software portfolio and service offerings, enhances our AI, Cloud and SaaS capabilities, and opens market opportunities beyond healthcare.
"In response to the COVID-19 crisis, we supported the healthcare community by launching the NantHealth Cares initiative. As part of this initiative, we made our NaviNet AllPayer platform available to providers for free during the month of May. We believe it is important to do our part during the pandemic to help reduce the financial and capacity strain on hard-hit providers, even if it temporarily impacted our revenue.
"In addition, NantHealth CEO, Dr. Patrick Soon-Shiong, presented a video series exploring the science behind COVID-19. The educational series was made accessible on the NantHealth.com website and our NaviNet and Eviti platforms, which garnered more than 10,000 views – over 1,300 hours watched. In addition, NantHealth medical experts hosted two webinars designed to educate our payers, providers and partners on COVID-19. Both webinars generated considerable interest with over 900 registrants each."
Software and Services Highlights:
Clinical Decision Support (Eviti):
Implemented, through a channel partnership, Eviti Advisor clinical decision support platform with a leading non-profit medical center in New York City
In July, significantly expanded Eviti Connect across the Medicaid population of a leading U.S. health insurance company with the addition of two states
Leveraged the Eviti platform to educate users on the implications of COVID-19 for cancer care and the science behind emerging treatments through videos and instruction. Also, added a feature enabling payers to gain insights to COVID-19 testing relative to oncology treatment plans
Released enhancements to the Eviti platform, including:
Return-on-Investment (ROI) reporting: implemented cost savings dashboard enabling more robust and expedited validation of ROI for our customers
White blood cell growth factor deviation messaging: added messaging to communicate unexpected use of white blood cell growth factor when a treatment plan is entered, allowing users to make real-time corrections for faster review and approval
Payer Engagement (NaviNet):
Leveraged the NaviNet platform to enable payers to post updates to their medical policies and other key information – assisting the provider community directly impacted by the COVID-19 pandemic
Launched workflow enhancements that enable providers to update prior authorizations already on file with our payer customers. Payers that enable this option as part of their NaviNet Open services can expect to receive more prior authorization requests electronically, while streamlining the process of managing prior authorizations for their providers
Precision Medicine and Artificial Intelligence – Highlights:
In May, received notice from Molecular Diagnostic Services (MolDx) of a limited coverage determination for Omics CoreSM
In June, announced the publication of four abstracts in the developmental therapeutics session of the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2020 Virtual Scientific Program. In collaboration with ImmunityBio, LLC, the company presented data, gathered from its database, which was used to advance findings in molecularly targeted agents and tumor biology
In June, announced the publication of a study in JCI Insight, a peer reviewed journal dedicated to biomedical research. The study, "Transcriptomic silencing as a potential mechanism of treatment resistance," explained the importance of using both transcriptomics and genomics for patient tumor interrogation to gain actionable insights into reducing the risk of tumor treatment resistance
Business and Financial Highlights
For the 2020 second quarter:
Total net revenue was $17.6 million, which included $17.5 million of SaaS revenue. This compares with 2019 second quarter total net revenue of $20.1 million, which included $18.3 million of SaaS revenue and $1.3 million of home health care services revenue, a business the Company divested on June 7, 2019
Gross profit increased to $10.3 million, or 58% of total net revenue, compared with $11.3 million, or 56% of total net revenue, for the prior year period
Selling, general and administrative (SG&A) expenses declined to $12.0 million from $13.8 million in 2019 second quarter
Research and development (R&D) expenses increased to $4.2 million from $3.4 million, primarily due to investments in product portfolio expansion and growth in data science, machine learning and AI capabilities
Net loss from continuing operations, net of tax, was $48.3 million, or $0.44 per share, which included a non-cash loss from related party equity method investment of $29.9 million and a $6.9 million expense from our fair value bookings commitment liability. This compares with the prior-year second quarter net loss from continuing operations, net of tax, of $17.1 million, or $0.15 per share, which included loss from related party equity method investment of $2.2 million
Non-GAAP net loss from continuing operations was $7.5 million, or $0.07 per share, compared with $6.9 million, or $0.06 per share, for the second quarter of last year
At June 30, 2020, cash and cash equivalents totaled $37.5 million
Conference Call Information and Forward-Looking Statements
Later today, 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 second quarter ended June 30, 2020. The conference call will be available to interested parties by dialing 800-708-4540 from the U.S. or Canada, or 847-619-6397 from international locations, passcode 49876109. 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.