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Invitae More Than Doubles Annual Volume and Revenue Year-Over-Year, Delivering 117% in Revenue Growth Driven by 102% Growth in Volume in 2018

Invitae More Than Doubles Annual Volume and Revenue Year-Over-Year, Delivering 117% in Revenue Growth Driven by 102% Growth in Volume in 2018

February 19, 2019

Annual volume, revenue exceed increased guidance for full-year 2018
Guided to more than 500,000 test samples, $220 million in revenue expected in 2019
Management hosting conference call and webcast today at 4:30pm Eastern/1:30pm Pacific

Invitae Corporation (NYSE: NVTA), a leading genetics company, today announced financial and operating results for the fourth quarter and full year ended December 31, 2018.

“In just five years, we have provided more than half a million people with high quality, comprehensive, affordable genetic information to inform healthcare decisions across all stages of life,” said Sean George, co-founder and chief executive officer of Invitae. “We believe we’re on an unprecedented growth trajectory that translates into better health decisions informed by genetic information. Our seemingly audacious mission to bring genetics into mainstream medicine and benefit people through all stages of life, is coming into clear focus – not only in diagnosing disease, but in helping people as they think about starting a family or informing those who want to be proactive about their health.”

Full Year and Fourth Quarter 2018 Financial Results

  • Increased test volume by 102% year-over-year:
    • Accessioned approximately 303,000 samples in 2018, including approximately 87,000 samples in the fourth quarter, which exceeded the increased 2018 guidance of more than 285,000 samples expected in 2018
  • Increased revenue by 117% year-over-year:
    • Generated revenue of $147.7 million in 2018, including $45.4 million in the fourth quarter, which exceeded the increased 2018 guidance range of $140-145 million expected in 2018
    • Includes $1.9 million in payments from Medicare for Lynch syndrome analysis
  • Decreased cost of goods sold (COGS) per sample by 24% year-over-year:
    • Drove down COGS per sample to $243 in the fourth quarter
  • Improved gross profit by 274% year-over-year:
    • Achieved gross profit of $67.6 million in 2018, including $24.2 million in the fourth quarter
    • Reported 46% gross margins in 2018, including 53% gross margins in the fourth quarter

Total operating expenses, which excludes cost of revenue, for the full year 2018 were $190.2 million compared to $139.4 million in 2017. Operating expenses for the fourth quarter of 2018 were $50.1 million compared to $43.2 million in the fourth quarter of 2017. For the full year 2018, net loss was $129.4 million, or a $1.94 net loss per share compared to a net loss of $123.4 million, or a $2.65 net loss per share, for the full year 2017. For the fourth quarter of 2018, Invitae reported a net loss of $29.8 million, or a $0.40 net loss per share, compared to a net loss of $40.5 million in the fourth quarter of 2017, or a $0.78 net loss per share.

At December 31, 2018, cash, cash equivalents, restricted cash, and marketable securities totaled $131.9 million. Net increase in cash, cash equivalents and restricted cash was $100.7 million in 2018 and $11.7 million for the fourth quarter, and cash burn was $97.6 million in 2018 and $17.0 million for the fourth quarter.

Corporate and Scientific Highlights

  • Published data in the in Journal of Clinical Oncology by researchers from the TME Breast Care Network and Invitae showing that current guidelines for genetic testing of breast cancer patients miss as many patients with pathogenic variants as they find.
  • Partnered with researchers at Tulane Cancer Center on the largest study to date on the genetics of prostate cancer. Published in JAMA Oncology, the study found that guidelines for genetic testing at the time of the study missed a substantial number of patients, suggesting broader genetic testing for prostate cancer is warranted.
  • Announced plans to launch a new patient-initiated testing channel in the second quarter of 2019, which will allow consumers to initiate a comprehensive genetic test themselves, making it easier than ever for patients to get medically actionable genetic information that can inform health decisions.
  • Announced the launch of non-invasive prenatal screening (NIPS) as our most recent addition to Invitae’s comprehensive women’s health genetic testing services, providing patients with easier access to affordable genetic testing in early pregnancy.
  • Continued the expansion of our network, signing 11 new partnerships with biopharma companies, health systems, and major cancer centers since the beginning of the fourth quarter.

Webcast and Conference Call Details

Management will host a conference call and webcast today at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss financial results and recent developments. The dial-in numbers for the conference call are (866) 393-4306 for domestic callers and (734) 385-2616 for international callers, and the reservation number for both is 6799673. Following prepared remarks, management will respond to questions from investors and analysts, subject to time limitations.

The live webcast of the call may be accessed 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 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 Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company’s financial results for 2018; future financial performance and estimated guidance for 2019; and the company’s beliefs regarding the growth of its business, its success in executing on its mission and the benefits of genetic testing. 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 actual result for the fourth quarter and full year 2018, the year-end close process and audit of the company’s financial statements; the company’s ability to continue to grow its business; 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 company’s failure to successfully integrate or fully realize the anticipated benefits of acquired businesses; the company’s ability to use rapidly changing genetic data to interpret test results accurately and consistently; security breaches, loss of data and other disruptions; laws and regulations applicable to the company’s business; and the other risks set forth in the company’s filings with the Securities and Exchange Commission, including the risks set forth in the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018. 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 monitors and considers cash burn, which is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly-titled measures presented by other companies. Cash burn excludes (1) changes in marketable securities other than investments made in privately held companies, (2) cash received from equity financings, including proceeds received from a Securities Purchase Agreement in November 2018, (3) cash received from loan proceeds and loan payments, (4) cash paid for debt extinguishment and (5) cash received from exercises of acquisition-related warrants. Management believes cash burn is a liquidity measure that provides useful information to management and investors about the amount of cash consumed by the operations of the business. A limitation of using this non-GAAP measure is that cash burn does not represent the total change in cash, cash equivalents, and restricted cash for the period because it excludes cash provided by or used for other operating, investing or financing activities. Management accounts for this limitation by providing information about its operating, investing and financing activities in the statements of cash flows in its consolidated financial statements in its most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting net cash provided by (used in) operating, investing and financing activities as well as the net increase in cash, cash equivalents and restricted cash in its reconciliation of cash burn. In addition, other companies, including companies in the same industry, may not use cash burn, may calculate cash burn in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of cash burn as a comparative measure.

Because of these limitations, cash burn 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 reconciliation of net increase in cash, cash equivalents and restricted cash to cash burn provided in the table below.

INVITAE CORPORATION

Consolidated Balance Sheets
(in thousands)
(unaudited)

 

December 31, 2018

 

December 31, 2017

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

112,158

 

 

$

12,053

 

Marketable securities

13,727

 

 

52,607

 

Accounts receivable

26,296

 

 

10,422

 

Prepaid expenses and other current assets

13,258

 

 

11,599

 

Total current assets

165,439

 

 

86,681

 

Property and equipment, net

27,886

 

 

30,341

 

Restricted cash

6,006

 

 

5,406

 

Marketable securities, non-current

 

 

5,983

 

Intangible assets, net

30,469

 

 

35,516

 

Goodwill

50,095

 

 

46,575

 

Other assets

3,064

 

 

576

 

Total assets

$

282,959

 

 

$

211,078

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

7,812

 

 

$

8,606

 

Accrued liabilities

26,563

 

 

22,742

 

Capital lease obligation, current portion

1,937

 

 

2,039

 

Total current liabilities

36,312

 

 

33,387

 

Capital lease obligation, net of current portion

1,375

 

 

3,373

 

Debt

74,477

 

 

39,084

 

Other long-term liabilities

8,956

 

 

13,440

 

Total liabilities

121,120

 

 

89,284

 

Stockholders’ equity:

 

 

 

Common stock

8

 

 

5

 

Accumulated other comprehensive loss

(5

)

 

(171

)

Additional paid-in capital

678,548

 

 

520,558

 

Accumulated deficit

(516,712

)

 

(398,598

)

Total stockholders’ equity

161,839

 

 

121,794

 

Total liabilities and stockholders’ equity

$

282,959

 

 

$

211,078

 

 

 

 

INVITAE CORPORATION

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

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2018

 

2017

 

2018

 

2017

Revenue:

 

 

 

 

 

 

 

 

Test revenue

 

$

44,546

 

 

$

24,572

 

 

$

144,560

 

 

$

65,169

 

Other revenue

 

810

 

 

827

 

 

3,139

 

 

3,052

 

Total revenue

 

45,356

 

 

25,399

 

 

147,699

 

 

68,221

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

Cost of revenue

 

21,141

 

 

17,049

 

 

80,105

 

 

50,142

 

Research and development

 

16,570

 

 

13,605

 

 

63,496

 

 

46,469

 

Selling and marketing

 

19,206

 

 

16,079

 

 

74,428

 

 

53,417

 

General and administrative

 

14,343

 

 

13,557

 

 

52,227

 

 

39,472

 

Total costs and operating expenses

 

71,260

 

 

60,290

 

 

270,256

 

 

189,500

 

Loss from operations

 

(25,904

)

 

(34,891

)

 

(122,557

)

 

(121,279

)

Other income (expense), net

 

(4,634

)

 

293

 

 

(2,568

)

 

(303

)

Interest expense

 

(2,103

)

 

(1,137

)

 

(7,030

)

 

(3,654

)

Net loss before taxes

 

(32,641

)

 

(35,735

)

 

(132,155

)

 

(125,236

)

Income tax benefit

 

(2,800

)

 

4,758

 

 

(2,800

)

 

(1,856

)

Net loss

 

$

(29,841

)

 

$

(40,493

)

 

$

(129,355

)

 

$

(123,380

)

Net loss per share, basic and diluted

 

$

(0.40

)

 

$

(0.78

)

 

$

(1.94

)

 

$

(2.65

)

Shares used in computing net loss per share, basic and diluted

 

75,092

 

 

52,018

 

 

66,747

 

 

46,512

 

 

 

 

INVITAE CORPORATION

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

 

Year Ended December 31,

 

2018

 

2017

 

2016

Cash flows from operating activities:

 

 

 

 

 

Net loss

$

(129,355

)

 

$

(123,380

)

 

$

(100,256

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation and amortization

13,540

 

 

9,181

 

 

6,553

 

Stock-based compensation

20,850

 

 

19,221

 

 

10,699

 

Impairment losses

2,925

 

 

 

 

 

Remeasurements of liabilities associated with business combinations

362

 

 

1,810

 

 

 

Benefit from income taxes

(2,862

)

 

(1,856

)

 

 

Debt extinguishment costs

5,266

 

 

 

 

 

Other

806

 

 

404

 

 

1,341

 

Changes in operating assets and liabilities, net of effects of business combination:

 

 

 

 

 

Accounts receivable

(5,291

)

 

(1,963

)

 

(843

)

Prepaid expenses and other current assets

(1,445

)

 

(641

)

 

(1,149

)

Other assets

(163

)

 

(185

)

 

1,465

 

Accounts payable

(417

)

 

(535

)

 

(111

)

Accrued expenses and other liabilities

3,564

 

 

(37

)

 

5,984

 

Net cash used in operating activities

(92,220

)

 

(97,981

)

 

(76,317

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of marketable securities

(9,680

)

 

(101,867

)

 

(90,236

)

Proceeds from sales of marketable securities

19,965

 

 

 

 

 

Proceeds from maturities of marketable securities

32,458

 

 

68,768

 

 

117,922

 

Acquisition of businesses, acquired cash

 

 

2,821

 

 

 

Purchases of property and equipment

(5,970

)

 

(6,675

)

 

(11,625

)

Other

(1,000

)

 

 

 

 

Net cash provided by (used in) investing activities

35,773

 

 

(36,953

)

 

16,061

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from public offering of common stock, net of issuance costs

112,441

 

 

 

 

47,102

 

Proceeds from issuance of common stock

17,511

 

 

74,619

 

 

3,134

 

Net proceeds from issuance of debt

93,909

 

 

39,661

 

 

7,500

 

Payments for debt extinguishment costs

(4,609

)

 

 

 

 

Loan payments

(60,000

)

 

(30,457

)

 

(2,438

)

Capital lease principal payments

(2,100

)

 

(2,952

)

 

(1,589

)

Net cash provided by financing activities

157,152

 

 

80,871

 

 

53,709

 

 

 

 

 

 

 

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

100,705

 

 

(54,063

)

 

(6,547

)

Cash, cash equivalents and restricted cash at beginning of period

17,459

 

 

71,522

 

 

78,069

 

Cash, cash equivalents and restricted cash at end of period

$

118,164

 

 

$

17,459

 

 

$

71,522

 

 

 

 

INVITAE CORPORATION

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

 

 

Three Months Ended

 

March 31, 2018

 

June 30, 2018

 

September 30, 2018

 

December 31, 2018

Net cash used in operating activities

$

(32,902

)

 

$

(25,765

)

 

$

(18,080

)

 

$

(15,473

)

Net cash provided by (used in) investing activities

19,947

 

 

(1,888

)

 

6,530

 

 

11,184

 

Net cash provided by financing activities

19,345

 

 

57,679

 

 

64,100

 

 

16,028

 

Net increase in cash, cash equivalents and restricted cash

6,390

 

 

30,026

 

 

52,550

 

 

11,739

 

Adjustments:

 

 

 

 

 

 

 

Purchases of investments

225

 

 

675

 

 

675

 

 

8,105

 

Sales of investments

(19,965

)

 

 

 

 

 

 

Maturities of investments

(2,078

)

 

 

 

(8,879

)

 

(21,501

)

Purchases of investments in privately held companies

(225

)

 

(675

)

 

(675

)

 

(675

)

Proceeds from public offering of common stock, net of issuance costs

 

 

(53,480

)

 

(59,000

)

 

39

 

Proceeds from issuance of common stock - Securities Purchase Agreement

 

 

 

 

 

 

(5,000

)

Net proceeds from issuance of debt

(19,792

)

 

11

 

 

237

 

 

(74,365

)

Payments for debt extinguishment costs

 

 

 

 

 

 

4,609

 

Loan payments

 

 

 

 

 

 

60,000

 

Proceeds from exercises of acquisition-related warrants

(191

)

 

(3,083

)

 

(3,277

)

 

12

 

Cash burn

$

(35,636

)

 

$

(26,526

)

 

$

(18,369

)

 

$

(17,037

)

 

 

Source: Invitae Corporation

Contact:
Laura D’Angelo
ir@invitae.com
(628) 213-3369

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