Interpace Biosciences Announces Second Quarter 2022 Financial and Business Results and New Clinical Validation Data; Diagnostic Accuracy Significantly Improved
Interpace Biosciences, Inc. (“Interpace” or the “Company”) (OTCQX: IDXG) today announced financial results for the second quarter ended June 30, 2022 and provided a business and financial update.
Second quarter Net Revenue was $9.4 million, a 16% decrease as compared to the same period of 2021. During the second quarter the Company was notified by Novitas, it’s CME intermediary, that pricing for one of its flagship thyroid cancer screening tests was reduced by 70% retroactive to the beginning of 2022. Our Net Loss in the second quarter of 2022 was $3.9 million, $0.5 million worse than the prior year quarter, driven primarily by a $1.8 million decrease in Net Revenue. Partially offsetting this impact is a $1.0 million decrease in Operating Expense. Improvements in our cash collection processes resulted in a 15% decrease in our Days Sales Outstanding in the second quarter of 2022 as compared to the comparable prior year quarter.
Volume in both our Thyroid and Pancreas franchises for the second quarter of 2022 were the highest in Company history, however, our second quarter revenue was significantly negatively impacted by a $0.7 million adjustment related to the ThyGeNEXT® pricing change for revenues recorded in the first quarter of 2022.
Interpace also announced today new clinical validation data for our thyroid cancer test platform (ThyGeNEXT® + ThyraMIR®) was published online within THYROID®, the leading peer-reviewed journal for original research on thyroid cancer. These new data demonstrated that the addition of microRNA pairwise expression profiling (ThyraMIR®v2) provided clinically and statistically superior risk stratification of indeterminate thyroid nodules beyond that of the algorithmic classification analysis provided by the original ThyraMIR® assay.
Additionally, the Company will be launching Point2Glucose™—a new pancreatic cyst fluid tumor marker diagnostic test offering that requires a very low volume of cyst fluid (0.2ml). Intracystic glucose is considered to be more accurate than the current diagnostic standard, carcinoembryonic antigen (CEA). Point2Glucose™ has been validated specifically for use in pancreatic cyst fluid and has been shown to be able to provide an accurate result even with viscous or bloody samples.
Dr. Syd Finkelstein, Chief Scientific Officer of Interpace Diagnostics, commented that “miRNA analysis may also reduce the risk of RNA sampling error because miRNAs can migrate throughout the thyroid nodule. As a result, they may be less affected by spatial variability than the distribution of cells with DNA mutations.”
Further commenting was Dr. Carl Malchoff, Professor Emeritus, Medicine/Endocrinology, Founder of the Endocrine Neoplasia Program at UConn Health, and a co-author of the manuscript, “The addition of pairwise microRNA expression profiling represents a clinically important development in precision molecular diagnosis of indeterminate thyroid nodules. For 87% of samples the positive and negative predictive values are ≥ 90% across a broad range of cancer prevalence (16% to 84%). Furthermore, as with earlier versions, this assay is performed using fresh FNA samples or diagnostic cytology slides, eliminating the need for an additional biopsy, refrigerated storage, or special shipping.”
Tom Burnell, Ph.D., President and CEO of Interpace Biosciences, added “Mutational analysis alone is often insufficient to accurately “rule-in” or “rule-out” malignancy in indeterminate thyroid nodules. We have previously demonstrated the utility of pairwise miRNA analysis in the diagnosis of medullary thyroid cancer and are excited to be able to bring this more precise risk estimation to clinicians, who must integrate various risk and benefits when deciding for or against surgery.” He further stated, “The diagnosis and prognosis of thyroid and other cancers aligns fully to the Interpace corporate goal of improving health care by enabling personalized medicine.”
Second Quarter and Year to Date 2022 Financial Performance
For the Second Quarter of 2022 as Compared to the Second Quarter of 2021
- Net Revenue was $9.4 million, a decrease of 16% versus the prior year quarter. The Net Revenue decrease is driven by lower ThyGeNEXT reimbursement rates and Pharma services volume.
- Gross Profit percentage was 37% compared to 48% for the prior year quarter, a 1,100 basis-point decline year over year. The Gross Profit decline is attributed to the lower reimbursement rate on the ThyGeNEXT product.
- Loss from Continuing Operations was $(3.9) million vs $(3.4) million in the prior year quarter, driven by lower revenue, and partially offset by lower operating expenses.
- Adjusted EBITDA was $(2.9) million vs $(0.3) million in the prior year quarter.
- Q2 2022 cash collections totalled $10.1 million. Days Sales Outstanding (DSO) decreased by 15% year over year to 59 days.
- Our June 30, 2021 cash balance was $3.8 million, net of restricted cash. June 30, 2022 cash balance was $ 1.9 million, net of restricted cash.
For the Six Months Ended June 30, 2022 as Compared to the Six Months Ended June 30, 2021
- Net Revenue was $19.7 million for the first six months of 2022, a 6% decrease over the prior year period. The lower revenue is attributable to the ThyGeNEXT reimbursement rate decline, along with lower Pharma services volume.
- Gross Profit percentage was 43% compared to 47% for the first months of 2021, a 400 basis-point decline. The decline in gross profit is directly tied to lower ThyGeNEXT reimbursement.
- Loss from Continuing Operations was $(6.1) million vs. $(7.5) million prior year to date, an improvement of $1.5 million. This improvement is driven by a $2.3 million decline in operating expenses versus prior year.
Adjusted EBITDA was $(3.7) million vs. $(1.3) million in the prior quarter.