NVTA - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Invitae's First Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation there will be a question-and-answer session. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Laura D'Angelo, Head of Investor Relations. you. Thank ahead. go Please

Laura D'Angelo

and our everyone. call. first operator, joining you us for quarter good you, Thank afternoon, for Thank XXXX earnings

us COO; George, CFO; Sean Katherine Stueland, Commercial today Shelly Commercial and Joining our Officer. Chief Guyer, Medical our Officer; Lee Nussbaum, Bob CEO; our our our Chief Bandekgey, are

the today's as we available, listen encourage our includes As metrics which have commentary results, to to financial you well quarter. you conference call, as and on release our press

remind thereof, about you the on results, of products, provisions our future to services, we various financial and pipeline acquisitions, within Private of forward-looking Before remarks statements for are our make and Harbor investment finally the product conversations we like our and the and the focus Securities meaning services, statements the the begin, operating constitute associated ongoing we that this strategy, businesses business the regarding with acquire, infrastructure not Act. plans in timing that of I'd market prospects, and auditors Reform accounting and our plans our historical, operations, Safe our to reimbursement opportunities, that our Litigation of manage of call integrate outcome these demand including those our future and with out

date Factors could actual These materially among our settlements. to materially and conclude ended assume restructuring, year or on It differ performance results investments, slated our to the December speak factors the from hereof. on We expectations. any that for XXXX, predict cause our for demand future additional you refer to The company actual is XX-Q outlook. information to that accurately acquisitions, current statements section difficult results as things Risk our titled additional services could our only legal we particularly business differ forward-looking our from therefore, for statements other the XX, and don’t

Accounting non-GAAP period, statements profit, and including Principles States, cash prepared per monitor of Generally several encourage this gross in release cost GAAP, research in include review and we administrative, earnings are non-GAAP press consider We consolidated accordance Accepted and development, and these XX United or reconciliations, as XX measures with you net and our expense, and share In our general marketing available net selling supplement as financial in loss operating To revenue, the burn. GAAP the measures. and Slides to loss and and to well of deck. which in the non-GAAP

Sean. With that, I to over will turn call the

Sean George

and call. joining you, us again thank the you for Thank Laura, on all

transform by information We our industry indication one genetic for continue margin to on niche in mission from individuals costs one test, billions the improve a a broadly is used utility medical sparingly information around used models the as basis served and test to by globe. genetic where high indication genetic healthcare market outcomes business by the testing to is where of lower

until dramatic fell The fashion, prompting us an our suspend around year strong up to XX%, when off in right QX volumes a started exceedingly guidance. mid-March with

that near-term to of our and well the year year have would we worth I the samples XX the headed pandemic. the impact better, us expectations. understand think of beat the is weeks it the around the [ph] first we While noting COVID-XX on had on path for revenue XXX,XXX for do were trajectory exceed to

April we importance and in done, this demand volume any up week a including in may the average fact, systematic structural genetic we getting see the perhaps information faster. when and and all diagnostic for daily increases. is changes importantly, actually don’t each in are May said week sense see of appreciate that More general information in steady to And

outlook scenario we and view on importantly mainstream supporting happening of the and the While essential period only level, in of regional a nature medicine. as recovery genetics really COVID early, our this more evidence

more sometime way care positioned that help seeing and near is term this ever, to than is been the through the for pandemic. on investing deliver we people to in front changing. their clinicians access What this uniquely are now patients Invitae healthcare has is

Our production fully professional clinicians to to are as add and in we capabilities continue telehealth. facilities to when home well supporting telemedicine solutions, transitioning our our and at operational with enhanced as education

be capabilities, easy fall, and it we Our is healthy are currently given the time. played consumers GHFR genetic and of home. number channel at Genetics acquisition development educating information scaling access in Clear role integrated own their to from has about key timely pregnant will the our conceive trying last from recently given week the a or mom the this direct couples to this baby comfort capability and is launching campaign marketing a of how This just for these

to than we We a and this one customers access accessible reality all are to new adjusting more poised more the And anyone and where even but they information is should and safer effort. to lead our this genetic Invitae believe a need, have efficient new all of delivered better new normal be ways.

I Shelly will to now turn the results. highlight call quarterly over to

Shelly Guyer

Thank Sean. you,

on preliminary or quick Invitae's expect in don’t XX-Q other a These We the as we with related to material. begin. of and May to acquisition interest adjustments. impact filed reclassification SEC the subject adjustments We XX. before be noted that I any comment in will release or and experience Form be net be incorporated change before net loss finalize to and Just today's are change

revenues, reclassification any balances or periods. this not Importantly, would volume or prior cash impact for

first we as We of growth revenue in quarter given nearly the of that of XX% XXXX. a accessioning more our growth. quarter reports XXXX. of billable than accessioned period. in more XXX,XXX remains important samples the number Billable than accrue quarter on and in year Sean this tests the reflects our previous volume strong based we a year, over are the the We full Volume recorded metric which very health mentioned, had a best business

represents first quarter the over XX% XXX,XXX reported of billable This quarter more XXXX. we volume increase of than which

across was and growth Volume growth higher strong in with tests programs. reproductive segments all biopharma

volume. XX% in was Additionally, that volume now experienced our international Recall we billable volumes. strong running seasonality our of at

The record last our being recovery with been weeks the by of indicators two this continued lowest pandemic future believe and early first affected signs quarter of the volume potential. are along we traditionally the quarter has growth despite

partners the X. payment on known payments continued effective reduction quarter payers over We third-party increase percentage is both from the to cancer and generated patients. tests due January from In revenue institution $XX.X of over including came pharma XX% Medicare despite our revenue XX% million of high from the a and this quarter payers XX% The higher XXXX. just from XX% third-party of largely first certain first quarter

Additionally, we third-party payer continue to see steady improvement in commercial performance.

acquired this and this compensation, the included on have deck. this $XXX impact the related which on down and our the P&L are from forward. items of most detailed we will and ASP product provided slide with affected discussion to in XXXX. realized by of Because decrease to was stock-based This $XXX of amortization reconciliation non-GAAP a continue by Consistent intangible press release fourth acquisition XX at slide mix of both last and an ASP quarter, quarter we payer ASP primarily from today's line assets changes, trends tables quarter related of end acquisition of charges driven going in

we cost XXX and this GAAP as slide profit XX% table sample regulatory are we our gross Our quarter are Throughout and to were million, believe making expense release are the discussion non-GAAP of average operating and first the well for dynamics $XXX.X provided press as which decisions refer million. we filings will the per forward. $XX.X financials numbers of of business margin depiction the of in on of more of remainder the gross quarterly the in going the results, and relevant

Investors encouraged is to review cash a non-GAAP We burn the reconciliations. are also measure. provide which non-GAAP

revenue The the structure. revenue the quarter was XX% reductions per the $XXX offset on in this of sample per impact cost cost offerings by and newer by mix driven increase growing of quarter, higher our content of increase incurred Our was cost of XXXX. in changes investment sample of costs first and scale from cost

gross we to by year. the higher end expect do is pre-COVID second costs see forward XX% per While of quarter a the to through sample towards margins path unknown, the back and trend the volumes

long-term is increase the due to GAAP was of gross mix an COGS ability XX%. positive near-term In due generate The the margin profit the to mix, operating margin. quarter and The flows. to $XX.X in The sustained our over a our financial the gross the along shifts, volume to sample accession reasonable growth product substitute a key per number for million, seasonality increase increase with success declines was impacted ago. the is of payer XX% billable indicator. gross product from in cash measure ASP comparable profit Gross year

to slide accustomed cash this the in from on investors non-GAAP the flows reconciliation are numbers financial We our provide a to presenting. us GAAP show statements adjustments the to to

and we XXXX early the growth. very in expenses, strong year months investment exhibited the operating exited began mode to Moving XXXX of and

continue in our quarter We expenses the for $XXX.X operating in business were invest first million. to

areas. quarter several first spend into fell Our

facilitate to support channel. to volume marketing and sales our headcount First, and increased and launches product direct expansion

third experience development mostly reducing research and our business. of growth general scaling COGS business, and to content Second, improving the expansion, the administrative and the increases support and customer headcount to facilitate

the pulling and starting back on by and would With of continue burn, which public highlighted a at as reduction significantly into is been scale geography, varied the to instituting to expense calibrate continuing spend last Cash The as COVID measures. on our call, efforts company we appropriate. brought second closely investments on highly million. acquisition type in pandemic end expenditures in and force, expenses $XX.X is quarter, projects, our the testing personnel our the other related excluding clinical and March of we and by reduction volume we based will changes back area, have in on our clinician impact monitor future the

the March cash, YouScript million totaled million. cash Moving to events important cash. and beginning marketable our XX, cash at cash acquisitions, We $XX on position cash affected $XXX at restricted Genelex, and April our securities equivalents, position. pharmacogenomics occurred Several which using in our closed of XXXX around

stock public common around in the with and quarter of the March $XXX at on that yielding combined started we second proceeds balance on million We hand with million $XXX cash offering XX these sheet. completed events our net a meant

targeting than a $XX With mentioned of rate in cost cash our which above, the of million quarter. total burn burn we given an million and less exit outlook, are we for less $XXX current moves the XXXX made scenario have than reduction

a We more withstand to of of stronger the it. coming even enough for than and downside have COVID scenarios capital variety out quarters emerge

now our will call of over the Nussbaum turn recent to highlight some data. to I Bob

Bob Nussbaum

presented individuals contributing Invitae's of would our Congress of testing XX% that to genetically positive showing the available all better provided limited for Invitae Cardiology research is cardiomyopathy by study virtual reassured result meeting by Among for falsely Thank services. you, we a to the World commonly in committed patients. healthcare at a Shelly. direct to negative a be genotyping to consumer community medical data of strategies,

the In actionable American contrast, the genes substantial of patients from research specific precision portion prostate identifies positive Genomics Invitae's Medical meaning This last cardiomyopathy that Among comprehensive management annual guide program. may variance in and confer arrhythmia at eligibility just XX Genetics established therapies a virtual that result. recommendations. seven for of patients and genetic and a implementation cancer testing presented of Invitae's abstracts one College had in Detect found We genetic week.

present. high tissue disease the where high of of intermediate, very there showed was Independent risk, examination risk tumor or

had who of of no on from disease. cancer, testing benefit criteria half nearly positive findings ovarian disease or of history the there based and severity actionable or could was of breast, degree indicates covered addition, prostate, having the This the insurance. family narrow whether patients half all of patients In deprived their performed testing testing from family overly with that colon of a history by

testing by partners patients showing collaborations identified and highlights of underutilized, findings broadening but network are such of more genetic therapies research from importance for that onboard tech This trials. or clinical Invitae's actionable implications, with Our with criteria coming in part simple to improve which increased provide to thus diagnosis testing growing Invitae's a clinical approved as qualifications also biopharma the deal highlighting treatment, partners. can be is conditions charge no data of programs to testing

These quarter of than to for In added who we patients new lost partners are insurance XX. have bioparma testing. afford important cost programs recently first or bringing cannot testing the the coverage number XX the alone more also total sponsor partnerships genetic

now to turn call will Sean. the I back over

Sean George

geographies, products, meaning to the services, which customers. clinicians Bob mentioned, these channels, and can in however technologies, trying times mainstream our equipped in service network our aim we the diversified our support huge is contributor customers that through be As of growing a to medicine bring to we ability our Genelex well Board and we the across to are world around

to us model. certain clinic using positioned our the to ways patients platform and anyone access We're investment clinicians aggressive in better from support the than afar

past We flows have and in for our options telemedicine acquisitions transition have enabled rather been investments telehealth the customer had has in time now and place our seamless. to some that

we've place and/or to many of contribute and business needs. developed and the one partners, it it years around systems, just network which look starting menu all available governments information the the now to new genetic making much the Over content, their to health leading our easier acquired to broadest is easier for for to globe

future clinicians our our information to in respond as investments, to billions challenges we present the genetic deliver on continue of pursuit we even by And better pulling of mission back relentless some to like diseases other these, in are patients, them. of information. cardiovascular worldwide and by this and patients cancer times need that the with families genetic Even afflicted disorders that there people serve

health and runaway the check of growing home is conception and need this The winner from as trying For to subside that pandemic diagnostics population year we surrounding dynamic in a healthcare does. it of will importance through immense. most is information faster. The on one unmet challenges The women of and the the information sectors in impact in. position conceive need continue to general only exciting access genetic Invitae to when genetic one pregnant, of from they comfort the and are their pediatric are their

over that, call I the operator to With now turn for the will Q&A.

Operator

from your The Please [Operator Puneet is go line Leerink. question first Instructions] of Souda open. ahead, is

Puneet Souda

Yes, hi Sean, thanks.

you on Invitae market organization, you're driven growth question the So disruption that number efforts costs testing over this of a emerging you time, how with how do merges and has in us captured traditionally of the share just and across as some on my genome is are ongoing hereditary out you from that emerge market peer though Invitae you expectation here can and lever think more from looking you doing pull you So you sort companies, second tests this these half? elective position that that cost into of help because what scale certain first at reduction understand a this the of group is crisis aggressively? are cost reducing had and the broader time menu line how obviously of thinking into the the is your as about expansion are the reducing landscape obviously how share do

Sean George

– think over over regional definitely recovery the really weeks, and do I so daily Yes, in a we mentioned volumes. little the we some hyper as is It last the few see average map. some is

call we're anything. too So to early, calling really in early

The on which the of to what short side no In terms scenario other pulled think of gross you investment. the essentially generation, of of is impact would the of I on to favor and anybody, back a make. profit is that's for emerging move it, natural near-term stronger COVID surprise is a alter mix investments done we've future lot it

people stopped made let we've We've the hiring. So OpEx go. We've moves. some

share share, capture we've of see us we've focusing So immediate opportunity improvements COGS all of product of And investment done opportunity, where to housekeeping. the on been focusing we really share improvements, the allow those take on front, immediate product like improvements. that basics kind we're on

to prioritizing that kind investments business out patient the front for the clinical those that help with the be office from move the And genetics other us efforts. of unable line better workflow, upfront of both a scale Any and lot clinician the in of we're systems facing [ph] done friction of operating capabilities ease, portal leverage. and customer legwork

you it's not think portfolio consider R&D this I line that albeit balance so, you will the our And different really the if challenges over the management with from of on from time, our if top COVID. – investments

will are to on for profit think The near-term that come domestically back the around broadest will being the amount I And certain the those customers we I OpEx make, period as and again globe. will we've continue those then with things and customers investments emerge more towards to least for made clients capabilities targeted the with generation. period, allow menu, moves friction continue the the and gross serve us that think of

Puneet Souda

is Shelly, deployed terms in for helpful. from and to script the us the ask in last stand I business should in reduction, do that much in cost you currently lay at for that's where reduction we or the of going and could acquisitions sales on done the the have done is could you core out you others that where acquisitions and that and hereditary of of if how as or those before? Genelex burn invested you and on it if Okay reduction look core reps you this the you more and total number have order of recently a the where be priorities of coming of have year is sort majority here, and business reduction expect reduction your reduction the over

Shelly Guyer

Yes, think, a some I the and of additional in I was in well about as we the to help some as heads business. us G&A an cetera mode scale and and lot so things that as investment highlighted force do talked the Sean been that sales of R&D others had to et to

we focus the recent We back So cut cutting on not of any across did acquisitions. new board the back. on

I think be shortsighted. would that

reduction. cost that can of is reduction would us but quite area integrate in for to get from cash terms those we be is great, of that and quickly. focus an If goal not Our some that savings

And Clear as important had Jungla I Genetics of think did you small a number really people recall, is and those Diploid. more to rapidly. as integrate

extra integrated and of and to like that lot the to the lot improving tests. the of level and there getting have comes a from side enabling those to heads not the on access increase sales again it in and So be service those three, able a that, but that burn are customer critical line top is

not products And offer for us, And let force. so, line terms able services. are of those but priorities reduction about on and costs, top Katherine then talk growing in all I'll enhanced of terms to sales being the of in specifically and of

Katherine Stueland

tighten mentioned quarter that in did the with first both bit. US and as predominantly ended and a to has I the trying for say while a internationally our XXX would We to in being really we being are navigate of that been team to Sean people partner field, how April team service approximately and focused care. good up customers counselors today really genetic who provide

able though being it do normal to of Walmart course the day. the

team provides and say that and base, up service that on forward. with reorder clinicians deploying letter know serviced that we in customer terms rates that's super patients the that being a through are be provides service of our we because going access is important [indiscernible] that set an we're their I focused, to to would that sure make utilizing able So sure moving getting accounts know be that through for to making

Puneet Souda

do smoothen the Renaissance you genetic and genetic call of And after outside the this by currently process could moving sort Can we methods telehealth longer genetic And quantify maybe you where and healthcare, their if you are much Sean, can't even telehealth think that one consult how ask term it licensed ins traditional business of counselors that from from last situations is aggressively and coming the comes to counselors the how of when on especially state. more expectations. do Gia about state seen have how and and counselors? to other telehealth versus across I sort telehealth reimbursement

using and and do expectation what's your those how term counselors genetic through you here business So driving telehealth for you? to longer work

Sean George

qualify, me start can can so infrastructure first answer counselors one Lee let of is the and impact, of of Yes, some the I our question, the think and side, developments answer of Gia I'll reinvestment latest impact address the quickly to really the out. a specifically to difficult in stand kind go then the kind Katherine then through genetic

it charts of a through the in period easier adding We have do that clinician clinic and our time invested and not some with walking and with patient been the that, our portal rep the in it clinician clinic. have information portal, always make filling or having or it pulling easier now to out features for to do

some So that's in time. development been for

definitely it's uplift through of that in can see - if but even to of of and has say how hard definitely kind of are otherwise now Gia volume, just the greater would Gia kind that, it caught positive days eliminate much our like say, versus take is but a the orders accelerated online to our more difficult to impact very lot having majority it's we get I through throughput person. clinicians how drive ability from say the is of portal, early clinics, the would a activities their time that

to So genetic we're Katherine, can question part. using how then pretty pleased about with I how it's the specifically a going. speak had billing, Katherine GC so you it counselors think the And are

Katherine Stueland

month can people really have know, initially clinics have going as that most as seeing really is, about Gia the GC is site. in ago, interested actually to the we thought OBs You be in be we're of in figuring seeing to pandemic and interested did capabilities with efficient of terms in demand in a a up. Gia’s amongst on moving since a Gia cancer we're was certainly strong because that forward just possible. getting And what's work out But they to centers how GC set introduction been supportive ensure of not interesting order

things that One our know, of struggled genetic we have counselors waitlist. with long the

their how trying being seeing to that's then dire counselor help help the really genetic is see a Gia counselors which of are Gia to of in to if really need genetic are be most so patients service And in can a identify terms care. clinical sooner,

to those given across situation So being the restricted overall of all segments. I just clinicians. access three customer would helpful development terms say interesting current of is really it's Gia in a

Lee Bandekgey

Lee. is this Puneet, And

Puneet Souda

Go ahead.

Lee Bandekgey

Go ahead.

Sean George

the reimbursement. On

the reimbursement development. interesting about think asked question, you important I it's pretty a and think I

Lee Bandekgey

is So Puneet, this Lee.

On working the on in ways. like think and side, have reimbursement we help I that been of number tools Gia Gia a

do make first with that that for And is the likely the errors order the no all via in it the information payer a clean our is they customers keeping bill having requires. thing they more record Holy and that will Grail The portal. to mind reimbursement

So when we And the when portal. when error via have less much have lower people rates order obviously than do they paper portal [ph]. the use missing our via wrecks information we customers much

So that's one difference.

The second difference accurate. is the can get we that we have found to quicker that it's where Gia directly interact we facilitates, information which and have the with opportunity patient, more

information. So likely we if We're reach information get the to to we're information can missing right to and we're out have the patient. that likely

So reasons paper the counts. towards those reduce helps more and - helps aside, Gia wrecks more are count. They more are portal, the because head manually expenses more operating it it as an reimbursement, require the primary because why drives head

Puneet Souda

you I cut think sorry it. off about, I And

Sean George

to Gia genetic add is screening, Gia have like And identify to was this just able individuals there have GYN, testing. counselor. The a should is don't there all. of I vast healthy We're where screening, well patients colonoscopy to genetic issue of those those manuscript a OB relationship quarter annual routine XX,XXX visits process of preparing of in Gia majority and or that of for practices no counselor at genetic over wanted No of a mammography the experience between this fine. that’s counseling. the fine. Yes, in clinic the

genetic world, a So generally but its the not just extending what major genetic we the way of counseling around having impact think it counseling. as being of beyond world is

Operator

is of from & question Doug Next Schenkel Company. Cowen go Please ahead.

open. is line Your

Doug Schenkel

everybody. Hey, good afternoon

volume Let a question. with me start

initially to than parts, that been it in So cancer assume reproductive testing? I is resilient guess testing fair more has multiple

thing QX? is, then of end March. said. trend it the week-to-week end second of saw third year-over-year since volume part or you versus the improvement said like believe Was the is, was you And that consistent March. that's down sounds what at versus XX% The you I

of the something how in framing acted give March? same willing maybe you So, your you end terms the us the April, comments would framed to way be of you it on in

Sean George

Yes, sure.

clarify off first saw in the in falling the as to soon - of early as So first week fact or average we in the, first early volume two two. kind daily

In got held hit reproductive lot hit of it that getting was across the percent most. other And range. up it best disease was the plus board in the the that somewhere the fact, XX-ish areas a

So between and for XX%. there, XX% included anywhere in cancer

acute least. did. And this more on. continuing. is at level regional general got where kind is gets that reproductive of The care, interesting this disease Other care centers, were high detail clearly acute other nonetheless, at early that And stage the on some still to become But cancer did areas aspect that of large there others care did - hand, apparent then obviously at kind of centers, really get where all. hit of it started a were there acute the that on cancer impacted not accounts get hit late with some

the that versus terms And trend. then in of XX% a - is

volume. prior from a think we XX%, the key we I clarification. down weeks, mean average that's say When daily

period saw initial impact. then off a of was the compared kind kind on same the XX% last that not reduction on So were last part recovery, overnight and of terms year And as a then, kind of it's time quarter. the and the similar past, path answer in to last we like of a of the we related or

bit client thing recovery just to and this almost and the of kind a back zip forth. the on and depending really daily stochastic, a certainly it's and average again, still it's is weeks code at is looking now, down The the same pretty volume which jump, and where it's country-by-country, few globally,

trend just I to think call soon it's for really future. a too too So really It's the soon. foreseeable

this impacted, quickly that by impacted period. current no volumes are both would early it's will and is impacted flows from back tell. volume then things. We expect after how - no to there's going of way matter trendlines, There the of course that on then to that be primarily too the QX through But the COGS side comes the to be be is on QX COVID going

Doug Schenkel

Okay.

off things QX moving idea end So I It about that's have model the shared. a I that XX%. how said, those the relative don't what direction. helpful. you QX right you sounds building facts you And like Sean, I the have about But really QX just at are we wide just think possibilities in because to trends, any of even as guess of down band, to were with

us On outcomes the is share model week-to-week to QX as more Is talked you here can help a anything flip And than stronger again, usually maybe updating there our of we're forecasts? improvement. QX. different side, you range about out

Sean George

I bit think types. customer It's of pass unfortunately QX harder getting all there more but new right. areas year. We've a think – than can, with to QX. back to new a more mean, definitely you're I customer kind lot it's more, and bigger a nonetheless. us is little Yes, difficult to the we bit is little product a the look look typically Again, a I types, new for new got to historical seasonality it's not little

depending off think, you impact call of we that trend a a would how improve. reduction Yes, long goes, expect kind the I don't can if XX% slightly

degradation. a we do thing we that's are and slight. mean slightly, kind reduction think trough seeing encouraging The not it. continued further is at how we would recovery XX% no of And that view I

But just and back. we and one to one by are accounts clarify one fact by the do coming improvement, opening up slight slight by mean is

it's And get kind the and hard anything call through be the bottom then track it's that, XX%. say QX impact minus really according else. And had you'll on of probably the it I side if do less than summarize it margin would to the we a little flow what to COGS we on were gross side. So same to our and outlook, beyond think

around – are we're later of scenario here with the We as that dealing something that the anticipates easy recovery kind imagine. Again, details year. outlook might our in that you some on as are

can't a play where I to But thinking is really lot QX outlook QX of our offer we’re there. kind So roughly out. whole going that's think

higher, the are right. to resulting hit, that burn account And time that's again, because the moves is we've you the for the topline accommodate going to made, COGS by the be

go with end accruing, with recovery is cost charges year. moves the which uncertain. all of still that the and of extent down pretty flow savings – to we've which and thing through OpEx get toward of Then, As path will burn to exactly and there and expenses made. we of some the the only pace of. pretty it's the the we're is sure the how That the The between

Doug Schenkel

understood. from one Last Okay, me.

key Just an rationales on new for that have offering believe would of not to to I important and add strategic the script Gen just appeal acquisitions pharmacogenomics, X but these was, more all you the in forcefully especially be systems as vendor and allow your to to, to use door closed solutions? that the get choice way a of for potentially healthcare and basically one

in I'm early If about I that, thinking given one goings that what's could see hand stalls right, completely the on. just where on going

demand actually On the some where between there's the see instances options treatment is increases other early maybe hand, where for there for some I of pharmacogenomic could association testing some pharmacogenomics given and COVID-XX.

signs going what's this too a some on working in I making guess is are is even the or is, say that So pandemic, that progress? the you're of given question to early midst it there

Sean George

want stewards been where give it's credit's We've that credit due. the of And weeks think of all latter. I to capability two I for now.

Doug Schenkel

Right?

Sean George

teams, doing had script and been – Genelex, ahead prep The from time. teams the work use a of Chris and of lot Christine

little information world's mentioned, it. And simply to all to we of latter. just PGx so, our color do is which we genetic and genetic when question, and is, information, say short an aggregate answer is pharmacogenomics, we is, answer added genetic want world's I actually, the it's the it there adding had therefore, is aspect your mission on the is we A more the need all that information

of a kind comment. rationale the The kind and that's came. timing throwaway of Now

years observed, and it say, anybody all I'd PGx systems, that in say we become footing or last enthusiasts ACOs, the XX for we of I’d as over the events, inbound as of the integrated half a polypharmacy last drug particular year the adverse a sudden. and As cost payers, observed demand clear gene

and demand inquiry inquiry saw that that increase. we so in of year, last the In

script decision asking not drug, good but So broader clinical in we broader panels sets support the that marching genetic just customers lot gene use noticed information, having about making of teams reimbursement, pretty actually polypharmacy. to gene for drug-drug for more Genelex we're this. our headway toward a find And getting

a of this of of – comprehensive – see very arc, and types it systems those seeing the being early payers, we rest customers a health days and interested package, a of as those into in arc, for pretty genetics in well cancer the in polypharmacy are very we're there addition by signing reproductive And – as comprehensive care menu, that – governments. to same, integrating integrating fact, like in widely, our those we interest now large it types at we what of virtue reproductive comprehensive reproductive

integration again, think, what yes, what while in liking relatively so that we so we'll far. I going, we're we of pharmacogenomics going And, kind time And see do a can it's get all to see forward. rough

Doug Schenkel

Okay, thanks again.

Sean George

Yep.

Operator

comes ahead, The from open. your Tycho next JPMorgan. question Peterson line Please is go of

Tycho Peterson

guys, Hi, is on Casey this Tyco. for

the Genetics talk about you cumulative was and can is, quarter the in question deals? what Clear revenue Jungla, contribution from First the Bio Singular

Sean George

we is The out is going while the Jungla to breakout Bio none. next difficult we’re And Clear coming deal or again We're have answer short year. additional volume Singular very revenue capability that and what – is Clear, sometime say answer then driving. we that to can not

types subsection see we new mentioned, Katherine as of we in going as to new of again, kind but customer business. our accounts counseling, that account break Although do don't and out without pickup a

us, as it's Jungla of a Again, broader sets, say phases revenue, that we anecdotally, XX% result feature to cost. team won Jungla to buses where we’ve brought. we which before, on report allocate the translates amongst And mentioned albeit capabilities deals the say XX%, Jungla, to time, in and because the key save it of about that, case as especially call difficult while of some the can of do directly how does having I labor can we buses say to

really take to as in share a are platforms. and more information. increasing us financials cost of can to those of an Again allow view the we for we advantage have acquisitions. to those menu definitive continue genetic lasting more that capabilities They integrated much three them kind ever attach So to reduce costs

Tycho Peterson

Okay, got it.

Katherine Stueland

the those of call reports that Jungla integrate pretty reissue historically. now as had actually we some be technology speaking have then forward. use of And for to to we that been moving significant some technology able those able And of those so to variants well integration,

have or particular and in integrated working that So we've and won, although the we about that concept, how a client thought market. received we when you bit another, little can't see is that's how a that

Tycho Peterson

question launch affected my the other is timeline, how pandemic then if was, somatic And at all? the COVID-XX Okay.

Sean George

We're, entered mentioned a Yes with That we and in investing them. of general so, mode, investments. we're really things not about we things we early year, be hyper growth future just what about actually the on a pullback say one that investments. of amount in maybe enough a it's some of on where are in future something can value as real to we are side would the we I'd fair just within don't discuss development talking it, talk it. publicly, categorize

– to type did term, of we the some was We talked So back, that's example, have COVID of down dramatic gross there on. to that kind to did it that we going up again, scenario end there of about of pulled generation. was working There balance side we've others a And of for investments, and we're profit shifting majority but outlook resources near was indeed our just see developments, which that. a slowed lot on. some development

fortune testing topline. right just we've the being now, really calibrating for conscious, what can months, exactly Shelly speed. we testing somatic any can in kind we'll coming earlier We we're of inherited have, think do really But pointed at the we'll out, side here the we as full in cancer. done it back think get genetic we it of on OpEx be With at the for

Tycho Peterson

thank you guys. Got you,

Operator

next open. of your DeGeeter Kevin is Your from Oppenheimer. Please go ahead, question is line

Kevin DeGeeter

thanks had question. from good get alluded an guys for here. at your But transactions, of constrained in for I various large would needle a taking Hi, coming throughout news my I appetite relative that mode. operation looking perspective? guess about definitely move to you cost points it the business we're sort

to that, And if quickly in scale more decisions think strategically of, were of light the more difficult is one greater had of the you've palatable is getting that in to about context some to or make is foresee created change, perhaps structural Invitae operationally one more business model? implement, transaction how the to around more a that of to kind would a it COVID difficult just

Sean George

delay part outlook strategy intriguing the would we definitely COVID M&A talked albeit do, things all it's question we growth M&A flows a, and kind certainly think uncertainly together a to of add platform, share. the as in by which the impact I types it's scenario as current are the purely really will put or of experienced kind ramifications, that of – that no we've and generate yes key distant Yes a our in probably economic we in off the about our future cash for being us acquisitions, acquisitions market of

demonstrated things a idea the and improved a leverage, think, careful a the so operating is still the there period time not particularly that about could we of top what sure I that in to that half, use are of we that are have shareholder that are think said, a far or better to line very I acquisitions both next best buy actually year lead out equity opportunities can we a take. and probably greater generation. in profit or year gross short With

advantageous mean, dynamic, in to benefits things Of think those you're identified we we think definitely something think broad the you of of because wide, starting that absolutely of course, scale, that diversity in that on I all offering. that silhouette because of know you if just know, P&L the product I and kind benefits are sit is I fronts. the still it's that's really we're a our a benefits And considering experience

Kevin DeGeeter

get just when back about of recovery? XX% can trends different to the similar one out we you should Perfect, and the Are modelling I markets quarter? in more magnitude volume general decline comment And of you trends in queue. seeing then the of international consider revenue? for that portion there get Are

Sean George

business. think international than slightly growing of entire the rest I is better our domestic

on because of kind basis, impacts pretty. back really not there's we need pulling a little It's in have that as With it recent in We're recoveries just there. a that and that on seriously unmet of months. we're we investment said, country-by-country much have, mentioned, as diverse more and think that We much is set invested a seeing. a so we

else But like And to going difference look a countries different. the same. I'd it's more between on whole, is zip dramatic side. between example, even basically think when out, the I basically so it domestic everything wildly all is much basis, difference it's the though on you states country-by-country and the for on codes the it than say average

Kevin DeGeeter

Fair questions. for the enough, taking Thanks

Sean George

Sure thing.

Operator

of go ahead. Your Jeffrey Cohen Please Thalmann. Ladenburg next is question from

open. Your line is

Jeffrey Cohen

in and which could Cardiology, for thanks Bob spoken million the Congress paper the World questions. a cardiomyopathy, and a patients more previously that I've know about we talk presented, the taking wondered is was had Cardiology patient, about little Hi, few payers talk or if and in studies with you competition us and how you're and cardiology DTC now as they on us in potentially the could and may you guidelines future future? what expecting any fit if through far and walk with as

Bob Nussbaum

I'll be happy Sure. to. Yes.

have cardiomyopathy thousands tested, into in to And to done. pathogenic So genes who pathogenic, hypertrophic dilated allowed we're genes. patients, to and come those Detect been have comprehensive testing mutation, clear program us XX% would have XX% of approximately have cardiomyopathy probably a first, has some finding Detect patients primarily of not arrhythmia the likely cardiomyopathy

things this. driving I couple think is there a

treatment is, a the for TTR. being driving it is diagnosis, need because these is to that's of applications. type different for the First specific is to isn't TTR. put not medications that a there diagnosis wild cardiac it different mutant a it only availability make genotypic amyloid of responsible a form Is a What know

number ago, who cardiology. on focused are handful. with a genetic growing of wanted to patient the think really from them. wanting family, years do point were of dealing There in counselors, the not they is to of after the may many or take say The six of cardiologists there really other genetics front is years I That there of just I'd of view a seven changing. be that care is

other recognition and at meetings that Now a a family, that cardiology other such tell your Society, a is cetera. information in and et not there's family in at be Rhythm meets at or that that problem, as risk, they're family, And a group not able member finding the the interest also our might for whole is Heart the people hypertrophic There to people in who the is Association of the is at being meets but bunch. that risk there ARVC only patient Heart growing important American cardiomyopathy.

behind changing. colon. spread years cardiology. just And is breast awareness to but that probably available the and unawareness into by now medicine think is cardiology part is XX that in in in there XX hereditary fact been testing. Part And that oncology, somewhere of and I ovarian driven is pancreatic, enormous The is infiltrate is perception. So a of cardiology, that now to difference hereditary its impact has starting of around now has just of of cancer adoption prostate, of been cancer cancer less precision

think the is opportunity I So enormous.

that is test. taken in in DTC that terms of DTC you found couple platform very time, to clear. of the a use been in diagnose a cardiomyopathy having a a pathogenic common essentially it pick them gene, is In of we the are few pathogenic they of variants likely Detect have or the patients that mutation XX% genotyping genes, if simply had When a XX% missed would

cardiomyopathy, are areas or and So, people but the DTC grossly a really taking those just of clinical also in test are not doing - service. a familial not variety the insensitive in medical other who just are really tests, hypercholesterolemia, in

Lee Bandekgey

cases up we cardiovascular just around sum the markets diseases direct link to it have genetics. on of of XXX serve, a call global them Jeff, in it million numbers, to Yes, XX%

even really kind picture, testing if cardiovascular though has our yet. of nice so segment laid you started basically And even as not about it, think out a of Bob growing that it's business, is and

of we in So very other definitely opportunity point we a diseases, to just the that alone big. that's see lot potential there. let cardiovascular And it's when

Jeffrey Cohen

commentary and home, perhaps secondly tests, tests can if about or be current you you the okay. you, includes if tests some talk saliva about that and and about growth which talk blood also me, the, and specific Got at then could And could in trends and from platforms saliva there, for home transitioned tests home? collection

Katherine Stueland

over So all on their ordering our are patients saliva. clients to highly our transitioning of teams and focused

been us I that's volume really during important so shift a that think the has maintain helped And period. this

ensure care continuity to what's time addition is the genetic future of So still are early of what the think that's people the this during Gia we have throughout this really and to us of to access efforts Those going driving that main been focus April. in pandemic, two deployment help in testing. the

our able encouraging know, conceive areas or it's cancer direct starting centers at-home that who to steady particularly of think We'll channel, for regionally. I a as who of through testing know, from more we've open seen, are volume women, that, you see utilization to The be those You are coming pregnant. well. now are to kind again trying

So the carrier testing in that channel has really been the focus.

campaign consumers home, their about testing a educating ability carrier launching them segment. are and specifically to for to that We this it to order have week the delivered

more So come to on we that that launched campaign. as

Jeffrey Cohen

for thanks me, taking questions. are Those Perfect. the for

Operator

go Benchmark question next Company. from ahead. Please of Bruce Your Jackson comes

is line Your open.

Bruce Jackson

and taking afternoon, you thank my questions. good for Hi,

procedures you it I the else classify Is elective ordering it Is is and You of stay-at-home regional the there you the in orders? was some restrictions mentioned that those differentiates that on something patterns wondering could if different terms regions? how or some on there us give regions? the the are color

Sean George

domestic, peel Yes. the really I of of that's nation, impact general, I level just on it's level degree state it so ex-US orders caution - it. or even would that area, there away, call but of seem But, kind it's to in Again, local correlation stay-at-home or pretty think level that cycle. I it metropolitan the say country to generally everybody. you does relative or - think would But some county severity new of if hard kind a is domestic

which counties the in once two kind dropped We almost XXX% all barely institutions, your the medical one volume equipped on volume. similar dropped same have also seen and of which and of with one size

codes or seen where we've a happened lot where others volume comes and state clinic. ignored. heading states back some zip seen of that the we've then homeowners And and or And nobody still has lifted is into

when very it's it's as look we're I complex is it. account we there at leads looking think a also clear what by as definitely, to coming So back account, and it's people equation I why that's to think and very, all

is - three be difficult a stay-at-home we letting weeks, we volume by we what lifted four equation. people volume account line tell now, revenue the weeks last the is coming of account being for What the we in of know be But orders we kind back get pretty to not recovery But will is it's trend people pegging more that know. an or on see advise to what would or equation and do better as exact course right will basis. is

Bruce Jackson

and the collection? of Is then the mix out have follow-up COVID-XX part of to question a that's home advantage sort on the collection test standard a this the trough, comes versus you becoming there collection tell is about Okay, the kits of And helpful. volume you - - home a bit bigger little any margin do the can having kits. us as

Bob Nussbaum

all that part Yes, the and all really. a the is short the can it's being the do last kind else of the answer same. equal Kind cost is When about of logistics, is kit shipping, you not the COGS similar it stack.

translates service moved of of billing thing. as than little of know the a do is of to think get account that, online, which we performance of course, Lee good is However, XX% leverage, the our better business you XX% more cleaner, goes that to support, which I better more of as out, up leverage, online that sales stack, less and building is OpEx better our we customer our the pointed business follow payers,

on reluctant when online So or habit. not specific information the we've better for reasons that accounts certainly And be by the much when else electronically. think, everything but are maybe I have say, all either we've I done that had would costs again, can the just been better, experienced, themselves is floor gathered it's

for this account or else a times, the it is the shorter invested lot force take environment are kind into throughput they of in patient-by-patient a their paid of legwork easier. do their basis clinic to office get actually get in thing of on wait throughput, then there anyway. everything ability To to the shoulders. can off higher don't shorter waitlist enjoying serve. We've And They patients

at that might out see lining in is And to this could online I remote. more this think that shift all structural home be a silver coming of we a

I I out. think And to going going that's than COVID a it. will coming to cost, little think it's it's same we're about is to improves the where the going but your guessing and think answer. is to come that it's probably short be The different long early operating that probably be question trend say, into out leverage a answer we is,

Lee Bandekgey

extremely to back have counseling, house I We've genetic called testing around with is the webinars it when done counselors time made that at the Sean of hundred could last six probably Okay, home to the patients. feel comment stuck. And clear to they're just over get calls. genetic a and about I've couple Patients the very country, home five, one in six doctors ability like attractive gone add is weeks in. that? done to constituting

the And business starts to I plus, go ability be to an ongoing and away. a our from going home, to so benefit even and testing stay-at-home after think is support counseling

Bruce Jackson

you very That's Thank great. much.

Operator

further back presenters questions closing turn time. call are the to There the remarks. at for no over this I will

Laura D'Angelo

today's for look conference with conferences. to speaking call. upcoming joining We Thank you you forward at

Operator

This your participation. Thank today's for you conference call. concludes

now disconnect. may You

Invitae (NVTAQ) 5 May 202020 Q1 Earnings call transcript