IDXG - Earnings call transcript Q3 2018 | Interpace Biosciences, Inc.

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Operator

Good afternoon, everyone, and thank you for joining us for the Interpace Diagnostics conference call to review the company’s financial results and operations for the third quarter and year-to-date of 2018 as well as recent developments. The earnings release detailing third quarter results was issued after the close of the market today and should be available on Interpace’s website at www.interpacediagnostics.com.

Before we get started, during the course of this conference call, the company will make forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the company’s financial projections, expectations, plans, beliefs and prospects. could on conference analysis to described call risks uncertainties based date of numerous in are to and the results of and that the statements forward-looking judgment from as and the important differ statements. These materially actual those cause are subject the include made periodic as ending the XX, XX, previously Form Form March XX-Q expected risks statement Safe include and XX-Qs the section These statements in XXXX uncertainties filings, well call well in filed the conference as today’s and for with for XXXX associated on this the XX, and release, as forward-looking be quarters Harbor third quarter which public Interpace’s to are March which statements. forward-looking June news with on filed the the the XXXX shortly, in described XX-K filed, discussions in SEC consider Investors read investors and carefully risks. or should these potential future assumes no actual to forward-looking does update outcomes these Interpace to obligation intend do so. events and or not to reflect statements

in and supplement In table to supplemental have is that the the Accepted we or release, numbers, on We GAAP, information. information be non-GAAP non-GAAP historical A included GAAP provided which non-GAAP available Generally addition, may helpful and company’s is website. information company’s earnings provides this the information future Accounting meaningful the performance. Principle, to information assessing reconciling believe in its

Stover, over Diagnostics. Jack call Now, the President Chief I Executive would to like of to and Officer Interpace turn

Jack Stover

will call an progress the date joining Early, then and Chief me third Jim and our Rob. detail. Good our the both our us you performance afternoon with I today. Officer. quarter you, financial and in With on review for to for more Thank thank we’ll update Financial is begin

your for Following call we will open the questions. that,

remind you mission calls. our all me on I of as do Let

personalized and by that medicine and the latest bioinformatics a provides pathology and services related technology patient We informed and management. clinical leveraging test decision diagnostic company and commercial improved molecular for are better fully-integrated first-line

commercialized classifier As cancer. thyroid is pancreatic now the of you test market. may thyroid the is gene know, is nodule identification, commercially ThyGeNEXT we test ruling evaluation and for for US tests ThyraMIR well focused sophisticated structures. next out microRNA nodules and molecular sequencing assessment that masses on only ruling currently our four nodules. thyroid for risk first indeterminate and of solid cancer on biliary the as expression PancraGEN as in first diagnostic focus available for cysts on cancer bioinformatics have generation

product, RespriDX, the is foray fourth cancer our newest commercial lung Our diagnostic. into and

of quarter million third growing The XXXX revenues $XX.X quarter third improved quarter was XX% with revenues revenue, over $X.X same seventh XX% by grew compared to which million, for Interface, over and quarter of period the the or of the third-quarter strong of year-to-date XXXX another XXXX. representing year-to-date straight to of

continuous any Our in managing again. our and rationally grew I'm improved cash lifeblood our business, our improvement pleased especially net we and or pricing like growth Further, NRV, value, continued aggressively in test while costs. the revenues once record ours. grow monthly company collections, our volumes to quarterly with of year-to-date realizable resulting

loss XX% comparable a than the quarter net quarter Our of over was the improvement for XXXX. more

as a XXXX. months well used well million basis Today, and was for we increase our million ended XXXX $X million a in to on have and XXXX. million capital million growing cash as $X.X end long-term over same million growing of $X.X up of in our $XX.X as revenues, activities no a accounting the of in a hand we support our remain in working at the to cash revenues accounts lab Most growth agreement, mostly in cash related September to needs for principally with as operating good to $X.X $X to in Included importantly, as to as full nine change line debt. position support related Our the of compared to cash equivalents September entered was our the accrual receivable, XX, credit we into period expansions.

Cross assays important the most and acquiring us thyroid at of cover the ThyGeNEXT Adding biliary include results and to quarter of equipment to as clinical expanding use registry Shield of Rosetta ACE to own labs. Association, Federal – X.X thyroid our and mutational also million PancraGEN the release ThyraMIR Blue at Our date the lab Most of of And the year-to-date to in as progress plans cover lastly, in our the Benefit Thyroid proprietary announcing interim completing Annual new healthcare of ThyraMIR. pancreatic lives. our our thyroid Blue Meeting. team, additional to nodules conjunction, previously potential largest its expanded, cyst Hospital, Georgia's most by American commercial include Blue panel successfully Cross supporting beyond coverage for our just policy Cigna of Philadelphia of addition ThyGeNEXT, business previously covering ThyGeNEXT. assays both Health and our our assess to lesions. progression Shield utilizing from covered the expansion Piedmont Blue And the data PancraGEN in Employee approved to assay cover and to system, XX now the for approval insurance structures And following launching indeterminate for pancreatic and slides as thyroid the recently well of Rosetta's new biopsies. Program solid indeterminate transition announcing, to General Receiving disclosed, the assist

or new platform, BarreGEN esophagus. on we by like related we new this thyroid with we the Barrett's new extensions we like existing Genomics biopsies to doing developing focused and our the expanding with assumption slide an of developing Rosetta with did ThyGeNEXT; our now as pipeline similar Expanding did principally is and from the following progress opportunity to acquiring product assays are existing seeking areas. former business; evaluate products what for products to in products, approval Our did

and and are endocrine leveraging also our offerings have We to on of GI offerings in build team our and BarreGEN, our as to sophisticated and a program, and physicians potentially as pancreatic cancer to users. commercial stage. capabilities expand gather or esophagus. more reminder, our at United assess classifier, data therefore, and continuing bioinformatics pipeline continues product approximately expand States. deadly and To developing our as an and utilizing adults in the product product, an at outside we are to while clinical focused Barrett's or you acquiring insight Today, seeking access have cancer who offering partnering a products, as in results by our the licensing to looking CEP, patient's risk early high-level we early of is stage data thus a cancer, major US, of BarreGEN, practices, a also risk million in esophageal X.X into provide evaluation more

been have We and previously Pathfinder over XX years obtained that our the developed data, approval platform on same we has of platform, for BarreGEN own PancraGEN.

BarreGEN signs. patients cancer of second underway, the As previously ability years our of risk to identify validity further to prior any looking reported esophageal to at you, visible study to is support to progression clinical

Center Barrett's devices are commonly their in CMS, performing with coverage. for of and We requirements begun for now of have in assessment regarding clinical Services, to procedures Medicare use and esophagus data with our used evaluations start Medicaid BarreGEN the discussions

as key BarreGEN are or GI and future. seeking face-to-face we market the including also on our are accelerating our companion the In technologies, the product near and assess and on meetings we BarreGEN under team and KOL, We are BarreGEN leader, planning focused applications to developing use our opinion as well support targeting organizing activities, of continuing with other in own. for to summary,

to a and to Jim state we and standard With I'd leader in to the critical have the turn care. specifically believe over financial We provide to Early, disease highlights CFO, this quarter potentially the call be discuss that, of like improve year-to-date. opportunity continue our to that information to for the the important

Jim Early

Jack. everyone. And I our you, Today, to financial some on position. key afternoon, elements would good performance of like Thank and focus

revenue year-to-date first comparable of was over comparable the of quarter XX% XX% million, a for increase Year-to-date from revenue XXXX of $XX.X an net period mentioned, and period year. growth was reimbursement to The $X.X was revenue our thyroid be in for business. the previously franchises. GI the prior principal the growth The As and expansion endocrine increase million, improved both units our our of reason of majority continues XXXX. of our

and our However, are thyroid GI both businesses growing.

the the of as due compared Our of the profit margin the prior experienced to gross third period, to as year-to-date quarter was comparable stronger period percentage for third XX% XX% the of year. XX% in XXXX. quarter for gross XX% profit the principally profit was second quarter And compared gross XXXX for

revenues same compared were sales costs are $X volumes our versus primarily grew due XXXX. the of increase the Our the production many as million of XXXX percentage $X.X gross to the case we growth. and the for period period were efficiencies comparable of our quarter year to quarter fixed Sales related relative expand in for activity costs over increase the million the for charged costs commercial $X.X third million, profit to continue prior to marketing the of production third as to Year-to-date, and as XX% supporting an in marketing of variable. and

million continued year-to-date R&D, and same million due year-to-date G&A, as of of million costs to in costs quarter transaction for and as our of were in consulting million leverage or XXXX year-to-date third of $X.X $X.X and General were to sales growth. third for marketing Importantly, relative $X the fees for and both third revenues, was expense R&D $X.X XXXX the and XX% a of were $X.X XXXX XXXX. XX% in each XXXX the percentage activities sales as decrease quarter to costs XXXX. reduced marketing third The compared Year-to-date XXXX development, was to demonstrating and million compared costs compared period period. the for administrative, year-to-date $X.X Research the to to mostly of year-to-date XXXX. as XXXX. the sales million quarter quarter and XXXX, G&A compared of

were as revenues year-to-date date to costs for G&A declined. XXXX to Our G&A of costs revenues compared as a XX% as and XX% rose percentage

period loss $X result of as million the Year-to-date quarter XXXX. the a XXXX to net the million to comparable to includes and to net operations a an loss XXXX. million for and offset third $X.X XXXX $X.X XXXX year-to-date As the about, loss XXXX million the compared year-to-date contingent compared for and operations quarter $X third noted the million $X continued for XXXX million net loss for consideration. while of quarter for was from of XXXX as million value was was compared respectively, the as information in $X.X of million for of previously $X.X related in fair period loss non-cash expenses from for was million $X.X $X.X comparable to the year-to-date change continuing

costs in As amortization, adjusted we our cash depreciation our referred depreciation as noted from other our or we purposes consideration, when non-cash EBITDA to fair adjustments measure continued a our earnings before on financial of often compensation, EBITDA, well warrant amortization and earnings operations charges. debt, evaluating loss to related for income/loss of as excluding We non-GAAP taxes, to adjusted value revaluing and define mark-to-market and as impairment, usage. taxes, release, interest, interest, expenses, asset contingent extinguishment stock-based liability,

ongoing $X.X our XXXX and gains negative million XXXX million, EBITDA $X.X Adjusted $X negative ended trend million three-month our negative XX, million and negative the and Importantly, versus cost-containment. for was $X.X and confirming was adjusted September of XXXX revenue EBITDA year-to-date respectively. operating periods XXXX

our the of end previously $X the third As million. quarter cash was at position mentioned,

cash operating greater XXXX included expenditures million approximately during amounted XXXX. greater monthly and from primarily in for cash restructuring burn $X.X increased from XXXX. Rosetta a to Total for the in and in $X.X discontinued through Our of $X.X These consistently extent, XXXX, operations. XXXX lab quarter year-to-date the monthly million monthly in September both XXXX Capital costs the to period costs, third in transaction averaged equipment due same XXXX. almost million nothing almost and burn $X.X year-to-date XXXX in has of to million and, to purchase XXXX expenditures

all net million today recognized $X.X XXXX revenue end the when component. we $X.X working revolving from to basis of to credit million was cash prior XXXX, our $XX XXX pleased for to lab at X, facility principally We ASC in purposes capital Bank, and million, for future. accrual $XXX,XXX from accounts believe Our that our the to managing peer growing effective recognizing up the will and three-year, to $XX facility our an working of also revenue in due increased receivable on a $X adoption assets the to into of revenues partially at us groups resulting compared liabilities basis. capital January of as certain a equity I'm and Total Silicon year on under an entered announce credit million were September XXXX. $XX needs total stockholders’ million that with assist million term including were foreseeable Valley line XX, of and expansion a this due

long-term Importantly, debt. we have no

currently quarter. me the end turn last is as at the that, Jack and the of headcount XX Our back let to compared the With call to operator. XX

Operator

Jack, you before commentary closing initiate to like would provide your Q&A? we

Jack Stover

would. In demonstrate to improvement continue and I you. and we Yes, growth. XXXX, Thank Rob. deliver

build performance. the to continue Our plans on are of for to the year remainder that

additional inflection these believe While factors, and we have all opportunities do value be that near-term multiple we, obviously, or drivers. could points cannot we guarantee of any

$XX milestone increasing over sales on QX, performance I guidance revenue Based net our million annual us. million our delivering and $XX $XX organically a foremost, and for be in to between am major million. would through First

accelerated we gaining a companies, our to ability our commercial unique with of on team and and, years and becoming our this anticipating capabilities; leveraging business that BarreGEN. look agreements artificial opportunities, course, confidence microRNA more areas strategic especially assist and expanded experience being recently to medicine even well-positioned such intelligence team; our excited this beyond opportunity several role the medicine end pipeline of other commercial solid simply unique growing competition the if our due and utilizing our leader capabilities products; we upon evolution successful experience more as year, successfully Blue set us our reimbursement. XX the Blue these But even various the of us to of clinical more we believe as such of opportunities sector; the performance play and out, with prognostic as progression business; ahead; program apart is Our years about assay; today, and growing in among disease should thyroid anticipated we a stage from high-performing data We can the our benefits new to, Rob? assessing of the of ThyGeNEXT, in in Shield and are disease launch retaining Cross and new growth our the that, thyroid new slide driven to more leverage impact of for expansion PancraGEN our up; and a personalized and believe our attaining including improved proven of we and as date over created in in date not the performance the that opportunities future reimbursement Rosetta reality our our biliary processing gaining target also the successful, expertise results the applications the future XX such personalized key data; success less of robust as and state be molecular based medicine. a in based lesions; things, federal picked diagnostic biopsies we’ve of but and and of

Operator

you, [Operator Thank Jack. Instructions].

Please from with Our Brisebois first question. comes question with proceed François your LaidLaw.

François Brisebois

Hey, taking thanks the for questions.

here. couple a Just

with impact In would terms and that of impact the start much doesn't on $XX Rosetta to the much But seems have the in revenue, you of million you line it line? it top coming moving that. take expectations? you $XX now, how think in It’s upwards. see should hitting say do too is nice million it to that Rosetta Or

Jack Stover

already interesting approval slide really What’s in businesses, that Thanks, our expanded our focused effectively slide offering business it’s on we've because, had Frank. Yeah. board, for processing. fact, question. slide the about on we Rosetta Good brought

extremely has doubt we impact of weren't a of as Rosetta But the as it. we has it that beneficial. sector also So, kind No about are been expanded whole now. on focused

than say, were your fact, running answer well we up we’re slide absorbed with and imagine. it. in you to And days, the with expanded in as So, I’d pleased question, less very business. we've can it as really XX

François Brisebois

of then, are or in to rep, team there? of reps seeing potential to you the number And the What are each any profitability terms great. you expansion and have in speed of Okay, terms thinking sales of here? its changes

Jack Stover

interesting. So, it's

we’re that sales existing those in the reps field, on reps that help focused of only can client also at the the stage We’re not that now service productive. expansion become more but reps

to it's So, months, reps three In And been PancraGEN well. less way, really very we case What accretiveness is the our general also sales relatively the side that's case reps the on sales the of date, our consistently but accretive. are especially kind expansion. positive seeing, of it's our quickly. on side, a sign. are though, a thyroid than it's by as And the

So, is an component, client I’d is capabilities leveraging service us. certainly is entire, even team critical more but just adding increasing important important it, that reps and call of the team to that

François Brisebois

just then, And you. Got more two here.

can just you you what a that through? terms in of sense you you the spot of your guys, have expertise at the So, remind sweet quite would – size are. you at what company consist of look kind of guys, commercial for size You would make us for M&A,

like there and you how kind going? sense of in is what out kind – Can usually, more of XX-XX And is you now terms that business. of growth side? then, been it's it the thyroid/pancreas the can makes on that similar? So, Is thyroid on – break side

Jack Stover

Yeah.

thyroid a the PancraGEN Let and business roughly last last is rate. And the was thyroid. – half is, business parts at other first, our GI answer clearly, continue XX% XX% and of the question to as faster of business your that end our and both right, at me grow, you're year, growing endocrine XX%

business meanwhile of expansion above is And the really expanding. today. both sides are the thyroid So, XX%

some of opportunities for opportunity at in acquisition it's Rosetta for the very see the leaders. already opportunities at if certainly lots were of a key sector that the look and that side, sweet potential they assets look we that spot because The for better is of hard key in that relative was guideline approved support gaining identifying the the That On us our the we really have a with were team, than we did. the you to growth strong the near-term, potential Alternatively, reimbursement developing. commercial we opportunities. have opinion M&A

with in the of technology, balance greater if the future, area, I’d a a certainly technology, the on in And that than areas look bioinformatics just see. And that we opportunities focusing believe, so, bioinformatics we it's number add good with our balancing, to clearly growth really in as a really partner, but are also commercial and a reduces that area even the not at is you potential. such had we’ve opportunity for us expanding the that past. accelerate to we what way with the that

François Brisebois

Great. me. That's right. it you. All for Thank

Jack Stover

Frank. Thanks,

Operator

Our Please next question H.C. Wainwright. your proceed with from question. comes with Yi Chen

Julian Harrison

Thanks Hi. question. Julian taking This for is on for Yi. my

and Just look might just in you if have what curious sequential light thoughts the any XXXX in like. strong early on growth, revenue year-over-year of

Jack Stover

early. It's a little

pulling that had we of as we've the together, the continuation you We seeing we are can is year-to-date. speak. are All that I tell success

our control we at and managing time. about concerned So, But, all our are under that. we’re keeping optimistic about same also obviously, the burn rate costs

So, talking suggestion more stay advice or that We’ll is about my shortly. tuned. be

Julian Harrison

much. very Okay. Thanks

Operator

Instructions]. [Operator

with Partners. question Alliance Our Capital question. Haynor Ben your Please with next from proceed comes

Ben Haynor

bringing partner think open me, the Good US questions. where mentioned US. how or or some of potentially offerings guess, strategy you likely to Thanks you’d outside your outside lab what's there? you with should would I the most commercialization for first that? for someone geographies afternoon, gentlemen. we about a get, something I It’s taking the the

Jack Stover

from hear to good you. Ben,

we've you been Let so doing far. me what tell

we've X% to roughly United focus on I So far, what – the of comes from or believe principally our able Canadian do revenue today, effectively, the been market. And, of is outside States. year-to-date,

have back with we the to think far get samples the but in States our shipped where we beginning have States them transporting a from off. of as that's revenue the nature samples, labs, nice was then that not report were growth we outside up What United So, United like is those in and flexibility because electronically. of the the the done of so process effectively, probably I X% more and kicking that set States, the we us United year

out Canada interesting it specialized about bad environment, really which been Western molecular where And we've us worked for a in in for so more been doing a is well. not is well, area that's that doing that enough high-end that. is Canada significant terms market of we us far, but enough pretty and Europe it's medicine of is We’ve in What’s socialized as And a in certainly economics operate close the not Canada, opportunity. the diagnostics. basically just

Ben Haynor

there. Okay. provide with timeline which That's And And in for Is you color what proportion how CMS very of any then, age? then, I mentioned helpful. Barrett's. guess, you that’s of on discussion Thanks color ongoing you'd of some there decision? Medicare Can be the going? also, Barrett's the patients would sort expect

Jack Stover

good questions. All Yeah.

those. segment and try me Let

is all, unique discussions. CMS to of the a that patients. cancer, terms growing a area. of making we progressers number of the on in is But studies we us Obviously, expectations meet studies. working the First right that we’re to It's, terms have small of And that reimbursement. are those the a being support outcome obviously, that will underway yeah, progress what number area. a in of able Barrett's terms of it's it's of esophageal has of sure having relatively result now in

we can a ended around partner, even working be if for would of important. this on do getting a But get takes lot So, to that direction. effort, doing to a reiterated quite we obviously, a or up a a this and failure been ablation while. like us partner, that of certainly past are said partner, We've the lot a getting not partner with success us to work in but, focusing that opportunities identifying roles in and and for the we addition and radiofrequency we there's identify our around or in arms time progressers we’ve and we've of if

the you So, very In in process only up, XXXX, get important. the this in I will clinical kickoff think XXXX, or more for if will, us. important ramp was that Barrett's

I we of for make the think that had platform and anticipate really us timing for of now reference early reimbursement for and it's but that that use we same BarreGEN is results the coverage, we the little it's have had for same RespriDX. approval to have platform approval we platform the a point is PancraGEN timing that

us know just well and what we’re they We very So, they understand the core data. doing. more of need

So, we’re can we quickly forward that. as we to as and as accomplish feasible can as moving economically

Ben Haynor

came And way mixed Okay, from get the for me, out? to great. much together and not Rosetta then, business kind quantify keep that good is lastly how to quarter guys all it from accounts does or potentially former of there's during there the of you a over

Jack Stover

between will, the the kind if summation, to gets we've read of You lines, that you business in had. Ben. say of categorized hard slide it It’s this all because

existing were And clients already so, now as clients. our are example, an former we Rosetta XXX% that also that have clients

And now so, with really of slides. together. in business in was Part FNAs of part it was us, they're their and

year at what us. it’s, had that, the can so I with looked deliver consistent growing, we we’ve So, But segment and All looked that to product true is they the or say it's sector they their what business, anticipated. it's say with to hard really in has Rosetta Rosetta potential fact, of a for to the impact as the it’s – ago. hard been here's I more that at had think, the originally as than believe or folks we could Rosetta thought say

Ben Haynor

the lot, for taking Thanks understandable. That’s Okay. a guys, questions.

Jack Stover

Ben. Thanks,

Operator

question. Maxim Caroline Our with your from Please Palomeque with question comes Group. next proceed

Caroline Palomeque

Hi. Thanks for taking the question.

questions. quick two So,

just would be that trends? maybe pipeline and you’re adoption Like, seeing is certain market expansion. my first on on traction and just Are happening your question know And doctors. Is first? any trend you then, a seeing more second there certain mentioned you The payer one adoption. payers I

areas into into? the that expanding therapeutic some would Just looking wondering what other be you're of

Jack Stover

Maybe can the first. I one second answer

with very In in terms we product much esophagus. with about of spoke about first lung we obviously expansion, Obviously, area. we’re the our pipeline spoke Barrett's focused – RespriDX,

on on much the And products and able our very kind strong. focused able would a US. Those helps sample, us are yet be be to outside focused key – in I to difficult what small of much nervous to we’re areas. that capabilities the that We’re areas that with system, very but developing or information. add bioinformatics or we relatively our microRNA of foothold is microRNA of we’re the If space area capabilities, great it's CNS, in a the that biopsies, have where focused not to totally central deal even like yet, get derive diseases believe a there very being

a of market question. In terms good adoption, it's

cetera. key space, gain as and issues, as opinion in guideline this are and physicians, So, know, awareness recognized et you products Caroline, by they awareness, the issues leaders happen largely

diagnostic. we’re therapeutic; a CLIA-based a not We’re

more – to I is to what we what's beneficial been if side, happened physicians for it's the of So, degree it's to have a be quantitative. much what Today, confidence would medical really say, with their easier it do would gotten will, you it’s payers on of the capabilities. high the and do. relationship, stages, in has early if or payer a embrace in easier pathologists, pathologists they that, have more the personal

So, would to more And regulatory space in quantitative. in to word of the I studies in that, kind sector, I a you say, of really audit labs, sector, more leaving effectively pushing – clearer. FDA control call use the much the are at I'd been couple constantly the with utility But terms you're regulation in would in that in regulatory of you it is say process. lot if that it's a the other say local if diagnostics terms states, the And I’ll pressure and function fundamental. the I’d an – the last I’d – And, us. are years high and obviously, is take pressure level you also in seeing studies, but back, of – overall and potential call, beneficial will, say base, less, them managing there in if general, what we invested reimbursement are really the the the the will, of concern more more cetera. they lot a the diagnostic on a we’re of gaining thing the in of really and reduction, in and were the And to it's we’re clinical a clinical that CAP area it's certification going will, rules of et

Caroline Palomeque

helpful. That’s Thanks.

Operator

session. make Ladies and gentlemen, question-and-answer any we’ve to the like would of closing Jack, reached the comments? end

Jack Stover

thank you. yeah, Rob,

follow I'd then briefly, side you IR all to as say questions, afternoon and questions if of forward sell please growing to following to analysts that to thank on for to you at any reach specifically update number support. our – joining again interest thank like thoughtful us. your progress. out Just friends We us have the – this like now continuing to six! thank our I’d you feel what you is further and unanswered us, always. thank and for us And your for free look And or or you Edison.

Operator

This concludes today's conference.

participation. this we lines your You at thank may you And disconnect time. for your

Interpace Biosciences (IDXG) 13 Nov 182018 Q3 Earnings call transcript