On February 25, 2021 NantHealth, Inc. (NASDAQ-GS: NH), a provider of enterprise solutions that help transform complex data into actionable insights, reported financial results for its fourth quarter and full year ended December 31, 2020 (Press release, NantHealth, FEB 25, 2021, View Source [SID1234575658]).
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"While managing our business through the challenges associated with COVID-19 for most of the past year, we advanced our goal of expanding and diversifying NantHealth’s software portfolio and services offerings with the acquisition of OpenNMS, continued to invest in our data solutions and AI capabilities, and delivered expanded capabilities on our NaviNet and Eviti SaaS products," said Ron Louks, Chief Operating Officer, NantHealth. "In addition, as part of our NantHealth Cares initiative, we supported healthcare providers and medical staff by offering, at no cost for the entire month of May, our NaviNet AllPayer platform to providers. I am pleased to report that even with a month of free access, AllPayer revenues grew in 2020 and added more than 1,500 providers to its network."
Software and Services Q4 Highlights:
Clinical Decision Support (Eviti):
Signed a renewal agreement with a Maryland-based health plan for an additional three years, and expanded products and services within the plan
Continued to expand Eviti Connect across the Medicaid population of a leading U.S. health insurance company. Of the 13 states originally announced, eight states have gone live through the fourth quarter of 2020
Launched Eviti Connect 8.2 which included:
Formulary Redirection ‒ a major expansion of our Treatment Warning and Deviation (TWAD) feature that allows redirection to preferred drugs. This new functionality scales the payer’s ability to enable formulary redirection resulting in significant savings in delivery of care
Smart Justifications ‒ uses Eviti proprietary algorithms to identify characteristics of cancer type and treatment goals that streamline workflow and result in faster time to treatment plan
Payer Engagement (NaviNet):
Signed a three-year renewal agreement for NaviNet Open with one of the nation’s leading Medicaid managed care organizations, strengthening a nearly 20-year partnership
Launched a collaboration with Sesame, Inc. that enables providers to utilize Sesame’s payment tools giving patients direct access to affordable, high-quality care while increasing practice revenue
Introduced new network analytics solutions focused on providing our health plan partners with actionable insights into their providers’ NaviNet activity:
Document Exchange Insights Reports ‒ provide information on utilization trends, reach into the provider network, and identify opportunities for targeted action to drive greater adoption
Advanced user behavior analytics and user engagement tools ‒ influence the NaviNet product roadmap and augment existing analysis available to our health plans and partners
Enhanced Open Authorizations to more seamlessly inform providers on where and how to request service approval from their patient’s health plan
Network Monitoring and Management (OpenNMS)
Deployed the OpenNMS flows and streaming analytics solution (300,000 flows per second) in production at a Fortune 500 energy company; decommissioning and replacing their existing solution
Released OpenNMS Horizon 27.0, which introduced digital experience monitoring for in depth monitoring of applications from the vantage point of individual end users and support for OpenConfig, a new industry standard that enables direct streaming of device telemetry data
Precision Medicine and Artificial Intelligence – Highlights:
In December, NantHealth presented significant treatment insights at the 2020 San Antonio Breast Cancer Symposium around the adoption of trastuzumab biosimilars in the treatment of HER2-positive breast cancer and the potential clinical and cost benefits of biosimilars. By examining Eviti data, the study identified an opportunity for payers to successfully redirect providers to biosimilars that offer high-value care at lower costs
In November, NantHealth and ImmunityBio announced the publication in Nature’s Scientific Reports of a study that revealed RNA sequencing is not only viable but may also provide significant clinical value in analyzing a cancer patient’s specific disease biology to enable an optimized treatment decision with a higher likelihood of success
In October, NantHealth, ImmunityBio and NantOmics presented results at the 2020 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Virtual Special Conference on the use of deep-learning models in providing significant risk-assessment of survival in pancreatic cancer patients, holding promise as a prognostic technology
Business and Financial Highlights
For the 2020 fourth quarter:
Total net revenue was $18.6 million, up slightly from $18.6 million in the 2019 fourth quarter.
Gross profit increased to $11.4 million, or 61% of total net revenue, compared with $10.8 million, or 58% of total net revenue, for the prior year period.
Selling, general and administrative (SG&A) expenses declined to $11.7 million from $12.8 million in the 2019 fourth quarter, mainly driven by ongoing cost management efforts and efficiencies in overall processes.
Research and development (R&D) expenses increased to $4.8 million from $3.4 million mainly from the Company’s ongoing investments in expanding its data and AI capabilities.
Net loss from continuing operations attributable to NantHealth, net of tax, was $20.1 million, or $0.18 per share, which includes a noncash charge related to the Allscripts Bookings Commitment of $8.1 million. This compares with net loss from continuing operations attributable to NantHealth, net of tax, of $13.2 million, or $0.12 per share, for the 2019 fourth quarter.
On a non-GAAP basis, net loss from continuing operations attributable to NantHealth was $6.2 million, or $0.06 per share, compared with $5.7 million, or $0.05 per share, for the fourth quarter of last year.
For the 2020 full year:
Total net revenue was $73.2 million. This compares with total net revenue of $77.4 million for the 2019 full year, which included $2.9 million of home healthcare services revenue, a business the company divested in June 2019.
Gross profit increased to $43.9 million, or 60% of total net revenue, from $43.3 million, or 56% of total net revenue, for the prior year.
SG&A expense declined substantially to $48.5 million from $55.6 million in 2019, driven by the divestiture of the home healthcare services business, continued efforts to reduce costs and maximize existing resources. R&D expense increased to $17.3 million from $13.9 million in 2019 mainly from ongoing investments in data and AI capabilities.
Net loss from continuing operations attributable to NantHealth, net of tax, was $88.3 million, or $0.80 per share, which includes noncash charges related to the Allscripts Bookings Commitment of $11.2 million and the impairment of the Company’s equity method investment in NantOmics of $28.2 million. This compares with net loss from continuing operations attributable to NantHealth, net of tax, of $65.4 million, or $0.59 per share, for the 2019 full year.
On a non-GAAP basis, net loss from continuing operations attributable to NantHealth was $27.0 million, or $0.24 per share, down from $30.1 million, or $0.27 per share, for 2019.
At December 31, 2020, cash and cash equivalents totaled $22.8 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 fourth quarter and full year ended December 31, 2020. 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 9786375. 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.