Le Lézard
Classified in: Health, Business, Covid-19 virus
Subjects: ERN, ERP

Invitae Reports $136.6 Million in Revenue in Second Quarter of 2022


? Continued to execute towards operational excellence with portfolio optimization, broad cost controls and cash management ?

? Recently announced realignment plan is expected to extend the company's cash runway to the end of 2024; Maintain financial guidance

? Conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time ?

SAN FRANCISCO, Aug. 9, 2022 /PRNewswire/ -- Invitae (NYSE: NVTA), a leading medical genetics company, today announced financial and operating results for the second quarter ended June 30, 2022.

"In the second quarter, we are pleased with our progress towards achieving operational excellence, as demonstrated by the improvements in several key metrics focusing on non-GAAP gross margin, operating expense, and cash burn trajectory, both on a year-over-year and quarter-over-quarter basis. These numbers reflected positive results based on the initiatives that we have been implementing," said Ken Knight, president and chief executive officer of Invitae. "We recently announced our strategic realignment plan, as we step into our company's next chapter. The planned changes are broad and necessary to continue driving us toward our goal of using our industry leading genetic testing, and advanced technologies, to transform healthcare for today and tomorrow. We have the roadmap and the pieces in place, and execution of our plan is top of mind as we fuel our testing business and make focused investment in delivering the future of personalized, genetically-driven healthcare."

Second Quarter 2022 Highlights

Total operating expense, which excludes cost of revenue, for the second quarter of 2022 was $2.5 billion, which included an asset impairment. As a result, GAAP operating expense as a percentage of revenue was 1,864%. Non-GAAP operating expense was $200.1 million for the second quarter of 2022. Non-GAAP operating expense as a percentage of revenue was 146%, which consistently improved as compared with 169% in the first quarter of 2022 and 170% in the second quarter of 2021.

Net loss for this year's second quarter was $2.5 billion, or a $10.87 net loss per share, compared to net income of $133.8 million, or net income per share of $0.66, for the second quarter of 2021. Our second quarter 2022 net loss included a complete writedown of goodwill of $2.3 billion, which was a result of a significant, sustained decline in the stock price and related market capitalization and a lower than expected financial performance. It also included indefinite-lived intangible and asset impairments of $34.8 million. Net income for the second quarter in 2021 was a result of the change in fair value of contingent consideration. Non-GAAP net loss for the second quarter of 2022 was $158.5 million, or a $0.68 non-GAAP net loss per share, compared to a net loss of $171.5 million, or an $0.84 non-GAAP net loss per share, for the second quarter of 2021.

At June 30, 2022, cash, cash equivalents, restricted cash and marketable securities totaled $737 million as compared with $885 million as of March 31, 2022. Cash burn in this year's second quarter, including cash paid for acquisition related activities, was $147 million, a decrease of $22 million or 13.2% from the first quarter of 2022 and approximately $50 million from the fourth quarter of 2021.

Financial Guidance

Invitae is reiterating its financial guidance. The company expects a low double-digit growth rate for its full year 2022 revenue over 2021. Longer term revenue growth rate is expected to return to between 15% and 25% beyond 2023.

Invitae is maintaining its 2022 cash burn guidance of $600-650 million, which includes up to an estimated $75 million cash to be used for realignment activities and severance. The company also continues to anticipate its cash burn to be in the range of $225-275 million in 2023, which includes up to an estimated $25 million cash to be used for realignment activities and severance.

2022 non-GAAP gross margins are expected to continue to increase for the rest of the year, based on ongoing margin improvement efforts and the current realignment initiatives, to the range of 42-43% for full year 2022.

Additional non-cash related charges are expected to be recorded in the third quarter of 2022 and in following quarters.

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:

https://events.q4inc.com/attendee/937240483

Upon registering, each participant will be provided with call details and a conference ID.

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.

About Invitae

Invitae Corporation (NYSE: NVTA) is a leading 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 Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the expected impact, benefits, parameters, details and timing of the company's strategic business realignment or various aspects thereof; the company's beliefs regarding the potential of its business, and its business priorities; the company's future financial and operating results, including estimated annual cost savings, cash runway, guidance for 2022 and beyond, and the drivers of future financial results; the company's beliefs regarding its roadmap and business going forward; and the company's focus for the remainder of 2022. 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 ability of the company to successfully execute its strategic business realignment and achieve the intended benefits thereof on the expected timeframe or at all; unforeseen or greater than expected costs associated with the strategic business realignment; the risk that the disruption that may result from the realignment may harm the company's business, market share or its relationship with customers or potential customers; the impact of COVID-19 on the company, and the effectiveness of the efforts it has taken or may take in the future in response thereto; the impact of inflation and the economic environment on the company's business; the company's ability to grow its business in a cost-effective manner; 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 ability of the company to obtain regulatory approval for its tests; the applicability of clinical results to actual outcomes; the company's failure to successfully integrate or fully realize the anticipated benefits of acquired businesses; risks associated with litigation; the company's ability to use rapidly changing genetic data to interpret test results accurately and consistently; 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 March 31, 2022. 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 several non-GAAP 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 evaluating the company's ongoing operating results and trends. Management uses such non-GAAP information to manage the company's business and monitor its performance.

Other companies, including companies in the same industry, may not use the same non-GAAP measures 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 and on the company's website.

 

INVITAE CORPORATION

 Consolidated Balance Sheets
(in thousands)
(unaudited)



June 30,
2022


December 31,
2021

Assets




Current assets:




Cash and cash equivalents

$      303,626


$      923,250

Marketable securities

423,137


122,121

Accounts receivable

82,586


66,227

Inventory

49,073


33,516

Prepaid expenses and other current assets

35,825


33,691

Total current assets

894,247


1,178,805

Property and equipment, net

132,935


114,714

Operating lease assets

117,977


121,169

Restricted cash

10,026


10,275

Intangible assets, net

1,107,821


1,187,994

Goodwill

?


2,283,059

Other assets

27,520


23,551

Total assets

$   2,290,526


$   4,919,567

Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$        26,751


$        21,127

Accrued liabilities

93,772


106,453

Operating lease obligations

13,388


12,359

Finance lease obligations

5,340


4,156

Total current liabilities

139,251


144,095

Operating lease obligations, net of current portion

142,509


124,369

Finance lease obligations, net of current portion

6,294


5,683

Debt

117,862


113,391

Convertible senior notes, net

1,467,443


1,464,138

Deferred tax liability

11,341


51,696

Other long-term liabilities

19,921


37,797

Total liabilities

1,904,621


1,941,169





Stockholders' equity:




Common stock

24


23

Accumulated other comprehensive loss

(1,334)


(7)

Additional paid-in capital

4,815,383


4,701,230

Accumulated deficit

(4,428,168)


(1,722,848)

Total stockholders' equity

385,905


2,978,398

Total liabilities and stockholders' equity

$   2,290,526


$   4,919,567

 

INVITAE CORPORATION

 Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Revenue:









Test revenue


$       133,182


$       111,496


$       252,679


$       210,772

Other revenue


3,440


4,816


7,634


9,161

Total revenue


136,622


116,312


260,313


219,933

Cost of revenue


110,340


89,331


207,456


164,822

Research and development


115,146


106,454


243,382


186,812

Selling and marketing


62,749


56,964


122,893


108,204

General and administrative


52,858


38,303


104,132


110,820

Asset impairment


2,317,864


?


2,317,864


?

Change in fair value of contingent consideration


(2,004)


(303,349)


(1,850)


(366,970)

Total cost and operating expenses


2,656,953


(12,297)


2,993,877


203,688

(Loss) income from operations


(2,520,331)


128,609


(2,733,564)


16,245

Other income, net


7,326


2,024


17,765


6,489

Interest expense


(14,019)


(13,407)


(28,004)


(21,800)

Net (loss) income before taxes


(2,527,024)


117,226


(2,743,803)


934

Income tax benefit


(3,563)


(16,560)


(38,483)


(23,360)

Net (loss) income


$   (2,523,461)


$       133,786


$   (2,705,320)


$         24,294

Net (loss) income per share, basic


$          (10.87)


$             0.66


$          (11.75)


$             0.12

Net (loss) income per share, diluted


$          (10.87)


$             0.53


$          (11.75)


$             0.11

Shares used in computing net (loss) income per share, basic


232,117


204,110


230,304


199,083

Shares used in computing net (loss) income per share, diluted


232,117


264,921


230,304


216,595

 

INVITAE CORPORATION

 Consolidated Statements of Cash Flows
(in thousands)
(unaudited)



Six Months Ended June 30,


2022


2021

Cash flows from operating activities:




Net (loss) income

$     (2,705,320)


$           24,294

Adjustments to reconcile net (loss) income to net cash used in operating activities:




Asset impairment

2,317,864


?

Depreciation and amortization

64,247


35,262

Stock-based compensation

103,901


106,337

Amortization of debt discount and issuance costs

7,776


6,492

Remeasurements of liabilities associated with business combinations

(18,043)


(372,722)

Benefit from income taxes

(38,483)


(23,360)

Post-combination expense for acceleration of unvested equity and deferred stock compensation

3,320


2,959

Amortization of premiums and discounts on investment securities

1,178


3,465

Other

3,721


1,808

Changes in operating assets and liabilities, net of businesses acquired:




Accounts receivable

(16,359)


(6,953)

Inventory

(15,557)


2,048

Prepaid expenses and other current assets

(2,134)


(8,346)

Other assets

(2,104)


(2,165)

Accounts payable

6,575


3,781

Accrued expenses and other long-term liabilities

7,186


8,255

Net cash used in operating activities

(282,232)


(218,845)

Cash flows from investing activities:




Purchases of marketable securities

(605,454)


(325,957)

Proceeds from maturities of marketable securities

301,933


127,738

Acquisition of businesses, net of cash acquired

?


(134,006)

Purchases of property and equipment

(36,970)


(20,154)

Other

?


(1,880)

Net cash used in investing activities

(340,491)


(354,259)

Cash flows from financing activities:




Proceeds from public offerings of common stock, net

?


434,263

Proceeds from issuance of common stock

6,234


11,717

Proceeds from issuance of convertible senior notes, net

?


1,116,850

Finance lease principal payments

(2,677)


(2,126)

Other

(707)


(1,060)

Net cash provided by financing activities

2,850


1,559,644

Net (decrease) increase in cash, cash equivalents and restricted cash

(619,873)


986,540





Cash, cash equivalents and restricted cash at beginning of period

933,525


131,480

Cash, cash equivalents and restricted cash at end of period

$         313,652


$      1,118,020

 

Reconciliation of GAAP to Non-GAAP Cost of Revenue
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Cost of revenue


$    110,340


$      89,331


$    207,456


$    164,822

Amortization of acquired intangible assets


(27,907)


(11,323)


(45,907)


(21,156)

Acquisition-related stock-based compensation


(147)


(1,306)


(279)


(2,240)

Acquisition-related post-combination expense


(387)


?


(891)


?

Fair value adjustments to acquisition-related assets


?


(1,574)


?


(3,148)

Non-GAAP cost of revenue


$      81,899


$      75,128


$    160,379


$    138,278

 

Reconciliation of GAAP to Non-GAAP Gross Profit
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Revenue


$    136,622


$    116,312


$    260,313


$    219,933

Cost of revenue


110,340


89,331


207,456


164,822

Gross profit


26,282


26,981


52,857


55,111

Amortization of acquired intangible assets


27,907


11,323


45,907


21,156

Acquisition-related stock-based compensation


147


1,306


279


2,240

Acquisition-related post-combination expense


387


?


891


?

Fair value adjustments to acquisition-related assets


?


1,574


?


3,148

Non-GAAP gross profit


$      54,723


$      41,184


$      99,934


$      81,655

 

Reconciliation of GAAP to Non-GAAP Research and Development Expense
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Research and development


$    115,146


$    106,454


$    243,382


$    186,812

Amortization of acquired intangible assets


(502)


(530)


(1,032)


(1,060)

Acquisition-related stock-based compensation


(23,255)


(8,572)


(47,024)


(19,045)

Acquisition-related post-combination expense


(2,643)


(998)


(5,224)


(1,058)

Non-GAAP research and development


$      88,746


$      96,354


$    190,102


$    165,649

 

Reconciliation of GAAP to Non-GAAP Selling and Marketing Expense
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Selling and marketing


$      62,749


$      56,964


$    122,893


$    108,204

Amortization of acquired intangible assets


(1,622)


(1,685)


(3,246)


(3,377)

Acquisition-related stock-based compensation


(985)


(1,463)


(1,568)


(2,696)

Acquisition-related post-combination expense


?


2


?


(38)

Non-GAAP selling and marketing


$      60,142


$      53,818


$    118,079


$    102,093

 

Reconciliation of GAAP to Non-GAAP General and Administrative Expense
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

General and administrative


$      52,858


$      38,303


$    104,132


$    110,820

Acquisition-related stock-based compensation


(1,646)


9,724


(3,218)


(21,250)

Acquisition-related post-combination expense


?


(5)


?


(3,747)

Non-GAAP general and administrative


$      51,212


$      48,022


$    100,914


$      85,823

 

Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Research and development


$    115,146


$    106,454


$    243,382


$    186,812

Selling and marketing


62,749


56,964


122,893


108,204

General and administrative


52,858


38,303


104,132


110,820

Asset impairment


2,317,864


?


2,317,864


?

Change in fair value of contingent consideration


(2,004)


(303,349)


(1,850)


(366,970)

Operating expenses


2,546,613


(101,628)


2,786,421


38,866

Amortization of acquired intangible assets


(2,124)


(2,215)


(4,278)


(4,437)

Acquisition-related stock-based compensation


(25,886)


(311)


(51,810)


(42,991)

Acquisition-related post-combination expense


(2,643)


(1,001)


(5,224)


(4,843)

Asset impairment


(2,317,864)


?


(2,317,864)


?

Fair value adjustments to acquisition-related liabilities


2,004


303,349


1,850


366,970

Non-GAAP operating expenses


$    200,100


$    198,194


$    409,095


$    353,565

 

Reconciliation of Other Income, Net to Non-GAAP Other Income (Expense), Net
(in thousands)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Other income, net


$        7,326


$        2,024


$      17,765


$        6,489

Fair value adjustments to acquisition-related liabilities


(6,190)


(2,374)


(16,193)


(5,752)

Non-GAAP other income (expense), net


$        1,136


$          (350)


$        1,572


$           737

 

Reconciliation of Net (Loss) Income to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share
(in thousands, except per share data)
(unaudited)




Three Months Ended

June 30,


Six Months Ended

June 30,



2022


2021


2022


2021

Net (loss) income


$ (2,523,461)


$    133,786


$ (2,705,320)


$      24,294

Amortization of acquired intangible assets


30,031


13,538


50,185


25,593

Acquisition-related stock-based compensation


26,033


1,617


52,089


45,231

Acquisition-related post-combination expense


3,030


1,001


6,115


4,843

Fair value adjustments to acquisition-related assets and liabilities


(8,194)


(304,149)


(18,043)


(369,574)

Asset impairment


2,317,864


?


2,317,864


?

Acquisition-related income tax benefit


(3,805)


(17,287)


(38,805)


(24,087)

Non-GAAP net loss


$   (158,502)


$   (171,494)


$   (335,915)


$   (293,700)










Net (loss) income per share, basic


$       (10.87)


$          0.66


$       (11.75)


$          0.12

Net (loss) income per share, diluted


$       (10.87)


$          0.53


$       (11.75)


$          0.11

Non-GAAP net loss per share, basic


$         (0.68)


$         (0.84)


$         (1.46)


$         (1.48)

Non-GAAP net loss per share, diluted


$         (0.68)


$         (0.65)


$         (1.46)


$         (1.36)

Shares used in computing net (loss) income per share, basic


232,117


204,110


230,304


199,083

Shares used in computing net (loss) income per share, diluted


232,117


264,921


230,304


216,595

 

Reconciliation of Net Decrease in Cash, Cash Equivalents and Restricted Cash to Cash Burn
(in thousands)
(unaudited)



Three Months Ended

Six Months Ended


March 31, 2022


June 30, 2022


June 30, 2022

Net cash used in operating activities

$          (147,543)


$          (134,689)


$          (282,232)

Net cash (used in) provided by investing activities

(449,456)


108,965


(340,491)

Net cash (used in) provided by financing activities

(920)


3,770


2,850

Net decrease in cash, cash equivalents and restricted cash

(597,919)


(21,954)


(619,873)

Adjustments:






Net changes in investments

428,608


(125,087)


303,521

Cash burn

$          (169,311)


$          (147,041)


$          (316,352)







 

Contact for Invitae:
Hoki Luk
ir@invitae.com

 

 

SOURCE Invitae Corporation


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