On August 8, 2023 Invitae (NYSE: NVTA), a leading medical genetics company, reported financial and operating results for the second quarter ended June 30, 2023 (Press release, Invitae, AUG 8, 2023, View Source [SID1234633976]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Invitae’s (NVTA) mission is to bring comprehensive genetic information into mainstream medical practice to improve the quality of healthcare for billions of people. www.invitae.com (PRNewsFoto/Invitae Corporation)
"In the second quarter, we continued our steady march toward becoming a profitable business while continuing to serve our patients and clients. We performed well in non-GAAP gross margin and cash burn trajectory as both continued to show meaningful improvements. On a pro forma basis, total revenue was up approximately 1% year-over-year. Rare disease, women’s health and our data business all posted strong double-digit revenue growth during the same period. Despite solid volume growth in our hereditary cancer tests, oncology sales were impacted by lower-than-expected insurance payments and lower fee-for-service revenue," said Ken Knight, president and chief executive officer of Invitae.
Mr. Knight continued, "Looking ahead to the second half, our efforts are focused on expanding our hereditary cancer customer base, improving overall customer experience, expanding adoption of our product offerings and continuing our push to improve payment rates and average payment per test. We are committed to establishing durable paths for profitable growth and creating the capacity to pursue innovation and investment in our future. These tenets will inform our efforts to position us for future success."
Second Quarter 2023 Financial Results
Generated revenue of $120.5 million in the second quarter of 2023 versus $136.6 million in the second quarter of 2022, reflecting the impact of exited businesses and geographies announced in 2022. On a pro forma basis, or after removing approximately $17.5 million of revenue from second quarter 2022 relating to exited businesses and geographies, the second quarter 2023 revenue grew approximately 1% year-over-year on lower than expected average payments from hereditary cancer tests and weaker fee-for-service revenue.
GAAP gross profit was $33.1 million in the quarter, compared with $26.3 million over the same period of 2022, or 25.8% year-over-year growth. Non-GAAP gross profit was $60.0 million in the quarter, compared with $54.7 million in the second quarter of 2022, representing a year-over-year growth rate of 9.7%.
GAAP gross margin was 27.4% in the quarter, as compared with 19.2% in the second quarter of 2022. Non-GAAP gross margin was 49.8% in the quarter, as compared with 40.1% in the second quarter of 2022. This represents continued improvement for the eighth consecutive quarter.
Cash, cash equivalents, restricted cash and marketable securities were $335.6 million as of June 30, 2023, compared to $557.1 million as of December 31, 2022.
Net decrease in cash, cash equivalents, restricted cash and net changes in investments in the quarter was $55.1 million. Cash burn in the quarter was $53.3 million. Total patient population as of June 30, 2023 is approximately 4.1 million with over 63% available for data sharing.
Total GAAP operating expenses, which excludes cost of revenue, for the second quarter of 2023 were $259.5 million, compared to $2.5 billion in the second quarter of 2022, which included significant goodwill and IPR&D impairment charges of $2.3 billion. GAAP operating expense as a percentage of revenue was 215%, compared to 1,864% in the second quarter of 2022. Non-GAAP operating expenses were $157.7 million for the second quarter of 2023, compared to $200.1 million for the second quarter of 2022. Non-GAAP operating expense as a percentage of revenue was 131%, compared to 146% in the second quarter of 2022.
Net loss for the second quarter of 2023 was $206.5 million, or a $0.78 net loss per share, compared to net loss of $2.5 billion, or net loss per share of $10.87, for the second quarter of 2022. The second quarter 2022 net loss included the $2.3 billion goodwill charge as mentioned above. Non-GAAP net loss for the second quarter of 2023 was $78.2 million, or a non-GAAP net loss of $0.30 per share, compared to a non-GAAP net loss of $158.5 million, or an $0.68 non-GAAP net loss per share, for the second quarter of 2022.
Financial Guidance
Management is adjusting 2023 revenue guidance to $480-$500 million compared to its previous guidance of over $500 million.
The company continues to expect its non-GAAP gross margin for 2023 to be between 48%-50%.
Ongoing cash burn, which includes cash, cash equivalents, marketable securities, and restricted cash and excludes certain items, is now expected to improve to the range of $220-$245 million in 2023 from the company’s previous guidance range of $250-$275 million. In 2023, cash burn will be higher than ongoing cash burn as a result of the company’s voluntary repayment of its $135 million term loan in the first quarter of 2023.
Webcast and Conference Call Details
Management will host a conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss financial results and recent developments. To access the conference call, please register at the link below:
View Source;confId=53596
Upon registering, each participant will be provided with call details and access codes.
The live webcast of the call and slide deck may be accessed here or by visiting the investors section of the company’s website at ir.invitae.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the company’s website.