NVTA - Earnings call transcript Q1 2022

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Operator

Good day and welcome to Invitae’s First Quarter 2022 Financial Results Call. My name is Brika, and I will be today’s event specialist.

We will have a question-and-answer session today. [Operator Instructions] And with that I will let the hand over to Jack Finks.

So, Jack, you may begin when you are ready.

Jack Finks

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

Joining are us Wen, Roxi today Sean George, and CEO; CFO.

and remarks and including burn recent services, materially those I’d restructurings, you our therefore, reduction settlements. vision this could things, XX-K, begin, from statements our section in on their to and rate, the timing to investments It product model, about future product and that safe statements you expectations infrastructure that outlook. forward-looking Statements services, is results in hereof. materially differ our that that information results actual additional from the future titled to investments, the of could or Litigation expectations. cause of to any business company various the growth, operations financial call These historical, factors as of pipeline we on conclude results, stated constitute we business our of performance among additional for in differ speak Private not future current our forward-looking within on acquisitions, most we legal our meaning Before our demand difficult date are provisions Reform predict Factors actual and make and operating Risk like assume, that harbor remind future accurately other refer our for Securities the only We don’t particular, Act.

you acquired and stock-based related grants the non-GAAP our in to value as of net metrics, cash connection exclude well commentary and changes To several consolidated or accordance income research compensation, of certain consider you available acquisition-related non-GAAP among Investors the liabilities, monitor cost can general turn adjustments of which I’ll assets, accepted non-GAAP the our prepared financial encourage net, press combination, acquisition-related review both over with operating of financial available, cash results with intangible amortization release the which quarter. listen or we benefits. development, tax to section We acceleration Company’s includes growth expense earnings of that, deck, and supplement at items, principles the payments which Company’s our as of to from administrative, applicable, we the profit, today’s Non-GAAP and per loss including other well and to may have as to and We ir.invitae.com. and statements to GAAP, income measures you post-combination in GAAP contingent acquisition-related expense expense net conference reconciliations, United bonus consideration as marketing, press With business loss our and the securities accounting equity of our in encourage slide States, website are access call share and to by and non-GAAP As call, as include you including generally We burn. gross assets the on results, burn. Sean. the release operating in the key in from in marketable the revenue, appendix selling and other exclude fair measures. visiting

Sean George

good everyone. and afternoon, Jack, you, Thank

dynamic scale with we data and clinical as and their release, business. our optimized that that our community company in demands driving in economy, efficiency management evermore care. portfolio Aggressively patient to visits, of our our important As driven serve tackle in is among the QX genomic year did I said the with at first restrain in on the simultaneously operational technologies demands broader month same COVID revenue clinical demanding exceptional for patient At healthcare pursuing inform in suite growth are and sector better grew we operational marketplace. surge a rates time, and indeed while of and an the that And we our the a we nearly a growth year-over-year. full clearly our that aspirations, and XX% mission growth can both, press the simultaneously. by exceptionally differentiated period one and a volatile continue and is are has approach to relevant that now business

While quarter. we’ve momentum exiting new account end we low throughout started and and the for on plan the of growth year, the the improving seen

addition launched year’s the this number and throughout of to plan Importantly, in capabilities year. products service anticipates a improvements new

as growth have and winning large been industrial introduction. create of continue pace And key in suited while category will the and markets, to which picking year we we take new product advantage to are very we We a throughout accelerated up the expanding uniquely here support win. new the efforts in

and we portfolio as our that the is few quarters era or in are an pursuit very our over This that the we just conveys Additionally, broad top inflection a of at And that situation marked are platform in to model. manage where across bottom-line costs, this of we few advantage of the Invitae past important the clinical that not important have and middle a quarter sustainability exiting end, trials. one technology to Invitae. have for we where one only we and massive investments a require all the growth ongoing targets to both, communicated a products

on that and to optimizing runway growth, we prioritizing our around driving Collectively, necessary to to our initiatives acceleration. or There there now call, ahead. reduced reduction where alter the the we in the among containing higher operating million service execute beyond. current are course a peak has this In portfolio means and Company other well increased operating this $XXX resolution over into reducing and we margin year burn of up the our an a communicated to sees As burn our annual in. efforts hit was accelerate burn quarter, expenses, we efforts see cash trajectory ramping extend ensure product cash by across its end and path and XXXX organization and

in for able personal will Invitae position vision medicine. over details. aggressive take operating while base. call Our new drive the to are on driving era customer execute flexible to model product to leverage information capability, health platform new into continue cycles operating this we our our unique This and to hand us enabling a to Roxi I’ll through win most the now of or walk opportunity believe,

Roxi Wen

Sean. Thanks,

remainder discuss the of non-GAAP call, For including we’ll burn. the cash numbers

offerings, comparison the $XXX million of the the we non-GAAP included by and XXXX, approximately $XX in first as of two release. non-GAAP and noted press understand today’s to of testing, we’ve the providing numbers. oncology, back the for As Approximately generated to of And detailed sets from We of in business at review to urge including prior financials programs. it’s quarter growth to our quarters, data easier metrics as cardio, reproductive therapy disease the and reconciliation allow investors year; financials over breakdown revenue, million women’s germline was deck. revenue slide In million follows. a XX% the neuro, prior screening selection approximately from Approximately grew service from certain the a $XX other revenue biopharma health last testing, and and analytics, year. prior other diagnostics, million data approximately companion This XX% NIPS, tests, and a rare newborn million over year. $XX platform our including carrier covering pharmacogenetic, XX% Data representing includes growth management, was XX% over last over and QX. and $XX growth

has expenses operating we’re that both in spend a control for the so the our to track has our we heavy and operating culture P&L, been priority principal level down the quarter, then beginning make assure of effort tools providing inflection and and the Establishing engraining business ability plan discussed making year-end in of cash decision shift breaking to into costs time drive a trend signaling to complex the the organization, Moving a burn real the across trend. on and become call. But annual become at doing the outperformed of lift. the the a the and Company every necessary inflection

first we stabilization this which exit ‘XX margin a translates XX.X%, gross non-GAAP a of was small early period. For million, non-GAAP gross signs from and year’s to encouraging increase this with of QX increases as quarter, profit $XX

of on operating million in prior track in the XXX% fourth or revenue Non-GAAP include $XXX XXX% to of expense or post acquired still costs from million $XXX million throughout steady expenses compared $XXX the or The quarter. year and of year. revenue revenue We’re businesses. operating XXX% improvements was to our

rate calls, stated growth spending come in the down on XXXX. of earlier we in As will

and portfolio We committed the business are to this as scale manage we the at return investment level. goal on total

marketable recent of commitment expenses and the company, at the due equivalents, compared us Moving burn XXXX. markets. designed to in $X.XX a capital lowering our overall cash securities the totaled we market fundamental million March as a on Cash, equity burn, compared annual cost extend position. from to a and in over quarterly changes our sequential and to to organizational a company, at December on in to of point. of out, and pathway include drop rate, and QX current our $XXX Those this ‘XX. our million well operating XX, conditions million into million $XXX year into XX, the of Drilling run to runway information the health hitting quarter the already and series to the first by was inflection at Cash cash pointed eliminated XXXX. certain $XX kind a That than cash are billion restricted $XXX good changes burn basis accelerate Sean of of new XXXX, more million goal $XXX and in million creating giving we programs flow in redundant our internal And than moves are and start external personal and cash more or $XXX a burn represents independence positions. cash

from level. to plan we plan In and so. and a short, at Aside the stable more hold we we to less, with stock-based operating do do have compensation, talent expenses

most are portfolio quarters. the generate focus our the We returns programs capital impactful opportunities over level that engaged further a on allocation the would strategic to highest of optimization and with coming benefits process near-term in

environment. it timelines, in the near-term platform critical Invitae, QX in this posted XXXX. of data business future in while to out and productive and growth bridging quarters. between clinical two be a shoring up our development in we you, to relates of a execute part past that flow We business drive them within navigate options in are hiring the in to short through reworking rational and plans and areas of will elements being make not discipline Mind moves differentiator this these the numerous new pushing and decisions of coming on as use will high-margin, are is the runway to or for our our order The aspect as term beyond, decrease content rapidly but we huge eight and at to decreases balance cash gap growing allow our the territory we our the burn cash, years increase the the sheet through the XXXX positive and

the metrics communicate trade-offs to to stepping quarter, and and in order progress, financial we accurately unveiled last describe Now, measures business on investment. that return operational

fast-changing to have are Similarly, dynamic, sharing balanced provide in and growth, offer objective serve transparency Under business nicely. these of continued active Our also on growth available the patients a active and QX. of into performance. expanded both share portfolio to them more data partners, our in accounts the the metrics number to is who we perspective the number and momentum consistent

steady XXXX XX% growth in vitality saw product XXXX. XX% in to New from

in slowdown quarter, primarily that in However, a a to pullback disruption. and in we parts XXXX number saw the of launches XXXX, COVID due from in XX%, to new product first resulting

driven we year. measured number to expect the we or a Revenue launches planned of $XXX patients, $XXX platform that period to of number mix the quarter on favors testing going metric either year, patient, of dropped revenue the now by the ‘XX by As by product first divided have throughout improve XXXX, product remainder the of primarily total lines. in in lower-priced Sean from that QX per which ordering mentioned, product for the for

dividends. is aiding it’s focused excellence. of that a our and towards overall efficiency of Variable the to steady XX%. to more investors long-term as entire note beyond and we Moving ways the to margin map place be favorable Also the on go our contribution throughout improvement return uplift measures in our to numbers volume this this become to productivity from in products relative The the to higher-margin non-GAAP goal take metric productivity. have initiatives that our growth costs we margins will the have as paying represent an And as growth. period. in variable meaningful XXXX communicated year cost negative team our we The gross important will start operational goal

While increases this that is in managed we deliver supply a chain and an industries, price you see continue to area to micro that such and is of number across inefficiencies outside factors, productivity impacted by QX. favorable as

the our increasingly reduction cash impact cost be Our our growth initiatives, continue will from meaningful to and continued higher-margin efforts. central burn products

top On time. That the as actively trend rationalizing in metric investment strategic R&D ambitions product continued vitality grow the investment down reflects impact revenue a demonstrated that our investments strategic a portfolio. our said, we over investment in expect line growth, new to percent our revenue as growth and these come capabilities. and of and while continue of front, And be to we to prioritizing as percent the should fuel programs R&D of

active the not first capital in quarter. we For M&A, in used were

guidance our for year. outlook Regarding and the

and XX% XX% will to in rate annual second the grow QX in quarter, we over on to pattern need revenue, $XXX the that million. of an repeat For year run prior -- the half, we the area expect between the need to exiting

significant new this We product the on launches, the half showing for year. doable. traction early from QX, force is our exit planned expansion number have Based a second of in lift our sales a and revenue of

more margin reduction to cash at margin, of gross in the full the burn, range to higher good the a steady XXXX gross of rate and start course annualized the we XX% For continue run with over for million. exiting year anticipate $XXX a On be than a XX% in increase had XX%. QX of year than we to

XXXX. hit the profile the margin for of revenue cash faster, our are XXXX measures deploying runway this XXXX tied flow and and generating is additional year, in we decrease to goals, much into our target well push to While cash

to the up Now, over to our call Sean remarks. wrap I’ll turn Sean? prepared back

Sean George

a our a with category exciting Thank most almost years notwithstanding, from time ago, want have and we we faced this is one towards tip continue transition and you, a recognize teammates little also this growth health XX in we negative the new, benefiting scales extremely to all. externalities to are markets, company work the know from day-to-day in capital Roxi. and carry the the will. essentially technology doing. care time. nobody macro of us challenging and to our get the now, is sentiments health with the position of investors important meets This profitability even and the of to to the years wellness. environments over was in information needed of runway the a who have XX capital benefit and I latter. the our Current in important years for independence, plot most been extend course the We their When we we most to and of what especially of exciting as to is everyone environment, as genomic market industry continue sector creation who us started on thank to force

more us, For return. an or idea, investment many job for this than of is a a so an much

of is life’s on for future hearty our to This the and is now that, story. Q&A. of not the this the be get for and invitation us, of over part operator a medicine, I a this board For With extend work. anyone we’ll many to turn call involved

Operator

comes from Instructions] question today Our Daniel Cowen. Brennan [Operator of first

Daniel Brennan

rate. ask little to off in the up you what to the you the And a the hit given was? color guess, given numbers exit ability year can given XXXX, give more come Or granularity would might just a it the even good, on the margin? one about you the the kind a I lot looked burn, of burn rate will but you gross started long-term, exit both of that looks annualize of of a give the I year where talked full you just us question it first below on line be -- Kind the you year, want confidence the anything maybe the started us on on Maybe top and like still about if sense the gave, short. though

on of that you’re some color seeing. just front and maybe more kind So what

Sean George

Yes, sure, Dan.

quarters anymore. at we So, all the a a business, the and of we weren’t pretty again, few look reduction thing told we We at with burn aggressive spend, costs the ago, growth to -- XXXX. charting, began at look taking course, taking important people rationalizing -- a pursuing managing middle top, our bottom for

have Now, XXXX beyond. making the of get into the course, cash of and end sure we’re doubling that we or down to

the particularly And so, happy quarter, won’t both margin. are looking that was weighted. really XX% on the on products. of specifically track. of January, point we reps keep at as the we’re -- kind say then first at We our of in is what years see inflection particularly February, now exit break source Invitae, momentum looked of for back-end the looking were to and positive. end plan, but not us That’s our lower the to that’s QX I unusual year, mentioned, March new question. look revenue it the sales of adding for to that on XX% the think suffice We it’s -- And launching to the for I plan like, now lift really just March, out which, was And and if

Daniel Brennan

business? basis. high cash commentary pruning a Obviously, can is, in you second the be question Sean, that guess, how line on about There XX% the you’re to on you’re at if, the you’ve in fact, a that balance the is opportunity would long-term in of of right kind managing was a Maybe top really XXXX structure I better about of where our context, you really but talked operating pathway as the growth way was. a just then on the cost focused time, think ROI kind tightly as talked to towards be? lot going being big of free lot flow, about same trajectory about an programs still

Sean George

Yes.

the moving billion, warrants billion to pushing think of sat, flow there. the was positive the a to revenue, by So, $X.X we plan a the XXXX, cash I -- just company to middle last -- get positive years mean we territory, to year. billion, flow out time looking the cash start kind territory we driving to we as look reminder, it $X as get that past team of the $X the The

the of and top the capital of extension cash priority. negative an environment doubling where kind continued extremely runway a is, down is has of of everybody making head Now, course, understands extending market our our is that us kind sure just

on focusing have are really And We’ve at R&D, and now, just broad the We months we’ve near-term And this for made. top depending gross importance all carry been looking first tailor horizon strategic We flexible on got time in investment and really that right are we’re improvements to six of a the things is trim needed. there’s generation. line ultimately at products. a profit platform. set running can on said, not business generating -- mission last costs. we’ve the the With ever, this time that

those out foreseeable And the efforts All to laid meet got we plan future to execute believe for are we’ve growth play. of year-over-year. the and XX% Roxi a the in continue all

Daniel Brennan

And back in Great. and with just go queue. if I’ll more I maybe maybe then, one the then could go

there do we to there How converts, the sooner on at do ways, think $XXX how refinance million? it’s to might plan which those? the we I with XX do timing later? kind know a plan of about look out but about -- still you rather something think than the a Is what’s Just those

Roxi Wen

for question. you thank Dan, Yes. the

sheet, the we call, as folks at very we And discussed a we strong continue have condition of conversations a year-end with have to do balance and lot So, recognize market parties have volatile. I to interested continue us. think is we and the

our most and growth investors that sheet remove exciting and overhang opportune And business our focus construct and so we’re balance to overall building. of find the kind community really so, the on we’ll then this can on and this time

Operator

Savant We Morgan Tejas now of Stanley. have

Tejas Savant

by on up well, Is picking us of And here. in you month-over-month quarter? Omicron on the sort the there follow-up a and on sort first thread sort Dan’s disrupted much on can perhaps of I performance way as back-end just improvement? Omicron maybe and of loading XQ January pipeline on guide the your for sort any there implied quantify Sean, of the with have headwinds then, a but color maybe the saw start some note, that we’ll related you how

Sean George

Yes.

sure, for lumpy issues. We an was fall major wasn’t accounts or then and other impact. big identifiable So, importantly, there off. -- no any We obviously There didn’t impact. obvious there see was, maybe

think sales of even and if where cadence more I we I that’s year, to and as said I we new for of account products that’s to XX% So, was real would XX% year, taking QX kind that mentioned, January With us to we reps, however, thing impact, that, back-end out a look it February of looks saw us one as say looking as sure us persistent. as loaded of a the we there. we quarter, taking to today, at And it account to keep puts get loaded. kind it which year the higher spot -- the saw of already into the lift reversal track, into make on the exited the new on us in end and was push growth, to that we will a as back-end a the

end and As that’s And that’s see QX. need the what our I quarter we where beat year, performance to in we we our have and this to see as exit do plan on today, envelope that. to we of what guidance we mentioned, the believe no we’re reason lower our hit can’t -- given to

Tejas Savant

of starting pipeline, in thinking the lines are on terms there? time how And on early color with any reimbursement? enough. you maybe Got share it. feedback Fair customer for can PCM, And then you

Sean George

Yes.

out. PCM is is launched. It So,

you process length bill course, can typically get XX-day been but then, first kind submitted. have of arrears the the of your thing. at in submit are now then, you that patient. you of and We And We’ve it, process our the in forward. we’ve start billing, first customers. a details -- once We’ve And going claim, had you so have bill

to say Medicare we’d to for have population So, then submission favorably, in our expect be to hear way reimbursement other looking opportunities service market. launched and begun customers selling we I’m it, to really actually on process and addition that the and have or pleased that expand with the

Tejas Savant

Got half about but it. And the you the year, panel Europe. as got coming you into second what you product kits, I the mean, up. also from believe terms then, guide of of new launched contributions selection launches? baking I this these think in are right, also therapy PCM, exome you’ve you’ve that in And IVD got

what’s So, pipeline just some you launches? great give the terms of guide sort from us of if on these be it in could color contributions in assumed would

Sean George

new let’s tends call -- half amount past an -- guidance The would reps, and we the And We’ve looked right. push lot and which based tends year. otherwise the of them. got compared to sales back-end you’ve that’s to we years, the that’s -- as of know at year, the on say, straight marketing back-half kind got with I it at say, got Yes, the to and formula looked you of a weight. product, given a new I’d weighting sales

the there’ll neurodevelopmental selection have You we year. got got the the IVD later therapy kits, which delay We’ve be product, a in launch, high launched expectations for. PCM you’ve

us at ongoing and additional workflow which we whole for and intellectual I genome the of the to the developmental of back the management, care a and expecting addition delay, improvements in half the reps are autism, disability, -- end of We risk sales allow push patient way oncology, improvements in offering tools of moving both both, would in to and year, have all reporting to additional interpretation into capabilities the the for urology. year. exome workflow the reproductive And all to contribute say to the health set pharmacogenomics, to improvements assessment, added improvements later, to coming

one get as of of trying anticipate kind of product really our of It of does I we’ve that. we’re we in years is last my actually our So, think year And slew going. spent have benefits that’s this new kind indeed mentioned activity -- the -- remarks, plan velocity I coming. of some reaping to couple the

Tejas Savant

Got in increases mentioned your for at you still it. final year, prepared sure that XX%ish for of Roxi. Roxi, your the here not year-over-year? one on this keeping OpEx to I’m but one level And target you remarks, are

Roxi Wen

Yes.

you thank for -- the question. are We

OpEx moment planning on, hold of the from current We’re translate to year-end growth at our half our which projection revenue this call. at will will we stable the translate pretty so at of provided guidance the year-over-year

So, we…

Tejas Savant

Got guys. it. appreciate it. I Thanks,

Roxi Wen

from we’re growth, year-over-year here XX% looking Yes, at now. stable

Operator

Brian Blair. have now We Weinstein William of

Unidentified Analyst

This is Dustin on for Brian.

launch. Just product? on about have want talking just just to on to the specifically competitive still [ph] And thoughts that on that later, is STRATIFIDE, if positioning product track year, this sure launches make updated LVP you the any on

Sean George

appreciate it. I No, Yes.

them, are Japan RUO; local in In of regulatory formats of and therapy launched out then, U.S., most the selection all and around obviously, the STRATIFIDE the and Europe, approval. embodiments FDA others IVD; IVD, specific including kits, course, globe. is So, of various versions have important

cancer offering, with launched it expect monitoring now oncology selling, that therapy -- the half is that offering to of running other were, size be back a inside also contribute to as out, integrated And with kits end exome-based whole as growth, added personalized think we that The we will year and therapy fully being selection off with nice our now is launched those technology added this integrated constitutional inherited the in opportunity. of then now are the the come of STRATIFIDE with the touches inside in year. technology middle fully the the touch the will we genetics, our an that selection of are of service we to So, and this selling. that the especially piece with as and year best-in-class exit or the monitoring. we again, are beyond, and and And oncology year given next LVP,

Unidentified Analyst

women’s relates on are trends by we in throughout screening in recent wondering particular, And commentary I’m it health FDA specific how guidance year. your given prenatal that. the on can if the noninvasive get some maybe And market on there to -- then, particular platforms. the

Sean George

the out -- risk a otherwise that went women the taken the be is unconscionable time, will the in out. I pent-up reproductive Yes. to to going around the X was it, women’s segment. Roxi either million what could of reproductive source sentiment future a from that X screen that it is get seem spend would know matter driving having the the out, with test NIPS. and that think just of is to a a reminder, accompanies continue but -- X growing doing child those ascribe of million segment. to there through to speak pregnancies, the about adoption as health. off to not I tests. I to just referring million NIPS screen that of market of two both just rarely as U.S., a point on -- table broke again, one, health talking a technologies as that betterment lot media much Again, process in a of And We short I as can in health a that we’re can rapid you a the time of growth or that’s pointed demand, event that kind -- That carrier not a I those might given individuals, -- those want There in offering, the rapid carrier NIPS is you’re is was

being out and conveyed test is about not the very and it’s unusual summarizing probably being that, are which, not industry, decades can times many of prenatal abilities reasons. at what screen put how is that subsequent we say to be I then, that as important these did pointed noninvasive do in that is attention and very marketed in important our I thing, that but does marketed our which, suspect the I And course, information is very something patients. the of the would worth to screens over launched is the be think, would reason I and -- just need -- between The those that we the statement a all actually potential was position that, what very out and space. difference prenatal It’s this. are beginning. on FDA leader future a -- noninvasive those was welcome screening clarification our to way, impact the all by considered, of nuanced, be a and have to happened the for that’s a being say, view We a past or -- at things

Unidentified Analyst

And one then, M&A. on just more

you. seeing wondering particular you capital you know maybe. but first from Given where no anything there sit was markets pick at if activity, are are the Thank I’m guys seeing any you the up there today? quarter, I guys areas you’re all, deployment

Sean George

Yes.

-- and answering start you I I I’ll think way the it. think the how given start is question

are markets, capital we’ve burn mentioned Given in people, the including acquisitions to we M&A cash our reduction activity plans.

years. improvement, burn -- or improvements, And we’re can Still at so the yes, portion been, a are better looking cost scale operations our has we technology that not leverage. additional screen, -- of in cash-generating historical have the add interested improvement, aren’t path workflow for this coming But M&A developments evaluating that our significant business what time. out the historical at burn good additional operating path near-term, to with things on thus, going

Operator

The Puneet SVB next question of comes from Securities. Souda

Puneet Souda

queue. So, back into the two ask I’ll hop and then

So, -- -- versus was I soft I is impact. mean first obviously quarter the Omicron but understand really one

sequentially quarter well. of also as way softer us as second and the is versus you The sort the described Street

work starts of sort what second understand half. to the trying just in So to

well. Your margin as well lower pricing in line gross and on is as coming the

So, have a a if oncology, recovery. is four data then, disease this times industry. consolidating look Sean, we before, out for the industry, at segments, potential And have I this elements the are half. stronger as a you think mean, women’s can four of give health, you that contribution about us we it rare just the most second talked recovery, services where us and of the about for expectations segments how maybe number we the And what walk any through among should obviously,

another hereditary and rare on competitor the peers So, disease of we side side. your of saw one acquire the yours

growth and drive So, your And trimming of this, on products how are as are change the to on some that how does help you us focusing just competitive maybe you understand longer focused likely things look that landscape? term? at

Sean George

Yes, you. Puneet. Thank absolutely, Yes.

our is -- That’s the can sales would QX end -- our products of not for So, I do in there. plan the think, probably say, QX is again, of our full the that’s think a -- out, of and kind flat I volume, It’s with rest the year believe new that we particularly was loaded. we stop. right? envelope. just the of again, entail pickup We execution execute back-half the unusual, -- The soft on was the year. That expansion. the amount force put in And oncology commentary low soft. all I’ll

Continued is And, services we’re where softer, better the see be work we’re citizen out patient quarter and be expecting accelerate the pharma to that. identification continue there’s we’re That’s lumpy it and going and there recognition, going with that data, there that’s to that, effort, this rare contribute. growth especially reimbursement and what get and top in that partnership other, portfolio to expecting start tailwinds our that good that In of product as leads synergies in with margin. patient business, here the course, and to grow we in And and pricing more the of -- what contracts given data with -- was our also like effort, lumpiness area. the line that can this bake year. revenue And that to on see. done health coming women’s to we in Within interest. network

go better QX, see if what target, toward product XX%, our that’s the be going to expecting improvement -- then what the down see I to in about year-end feeling an it. are get contribute, growth, if that’s would manifest said, a we’re So, we areas, those are will margin which in like -- to we I Q-o-Q you XX%

I answered Yes. the think think whole -- question. I that that was

about and consolidation. up. question the M&A would Yes, I Puneet, other No, was Sorry. imagine pick that’s to going

year that think up the to pick next I definitely in or is two. here going

play what my benefit of for, at of on able scale As got looking have being of -- time full we’re suite turn and lines operating for we’ve and we we’re with the a the dials I to return. a now where are really technologies about think R&D comments investment

won’t out the that. probably really make A going that’s thing stay. vis-à-vis we’ll will that’s to really a that cash So, game, some our now path good I lot to sense M&A of I to things think like where mentioned, stick given help aggressive we’re we’re accelerate and on. things And that

stakes. of truth, on In about terms of ones disorders, for difficult, these in more -- with inherited underneath with high a I -- the stages going to I genetics our best the I compelling inherited up and service offering to across then I is the By quality it’s one consolidation, well-run really channels also companies miss. hold think to we’re of different the of further business, the all all for hood that powerful really, more often companies High the I these these patient compete of economics picking with the I start think believe and very would great game different built at available life. In it patients continues a best-in-class patients. of as assets, really see readout. really terms mean while a across with I handily think have we expect And miss, costly even stakes think highest and complex, And more I missing phases consolidation own. expect

Operator

We of Goldman now Sykes have Sachs. Matt

Matt Sykes

first picture. just question, maybe big Sean,

mentioned a portfolio about times the the call few on optimization. You’ve and release

you as get to the profitability through sort about eventually? progress move the wanted conservation on in and cash appropriate, think of year table, and off be color terms feel Just what’s the would on of you you the the any of how beyond portfolio light in what additional what’s table your towards overall

Sean George

Yes, our already that lot is product kind then new oncology, and rare and it. run pediatrics a for. and absolutely. capabilities product essentially of In high-level health new paid thinking I’ll other. and Obviously, new disease say, there’s the that I’d down on -- reproductive is there of and

aspects support those, sure in making kind cost production businesses. to of out finishing those -- to the it’s those various and of launching So, the investing line getting support those focusing continued also on the those, of out, of

in for health use want across can launch their patients the something lot all And being can put on partners the ecosystem for systems kind that a price and make benefit. all patient capabilities piece idea they’re to care by cost that the that not just all also be for in in patient the is of two whether to different high development themselves stay which or that’s and patient -- the served next of takeout. of that’s we’re in those able but other more our profit comes to disease find that the other that that, years, from the continue translates we to or believe, that revenue, nice and very used patients margin other first context becomes nearest gross to in. of which, to to growth course has it data services contribution, sure strategic and is really And the Then nearest we either foremost. company. So, That important of of the of going data important to revenue, accelerated be in valuable, for being those the coming the areas also, invest the network, drives oversized an where that

down then put get the the and significantly hold or areas some to. that I other or Now. disease on know which things we slow of we either slow are will

that not support our cost But is addition is pretty right platform Our I now even is effectively. enough areas and effectively of platform can as as cost the large I new disease the And market Cardiovascular it genetics find -- market. that is view as as is it’s the oncology the time, reality. mentioned, a as assessment -- belief so. unfortunate, my in I flexible but or my

take of something are Alzheimer’s, Those distribution that for going the Adult think those that, them medications with the just both combination important, is given population, And genetics, we families scourge very individuals affected I load examples it balanced two be the and number aging -- people where the Parkinson’s you you of is disorders. or pharmacogenomics, the think of the I the manage -- to and given ice. families. If families risk those who load when rare common for in of don’t about their -- affects many putting massive again, that neurodegeneration, the don’t know with given ALS to have and particularly used of opportunity. the on that’s a all undoubtedly dementia, are

to going off. hold We’re

and back few pulling of some the take ‘XX burn We’re mentioned, on runway there on the or really hopes early growth can for all of a areas that this going, going essentially keeping in while goal is development that other but bright extending end in pattern, very I so the that the the now outcomes, ice great ideas out which have to very we’ve at we otherwise And Also, figure expenditure out keep same this advanced like specific in cash a focused out are beyond. are we There or later. begun that investments holding future. the of cash time business. to this the

Matt Sykes

shift just lower of quarter And noted ensure the just this decline the shift a on What mix in you reacceleration test. revenue to impact can towards some sort that of price patient? stabilization was then, a to revenue mix or per do per you patient, in Roxi,

Roxi Wen

Yes.

every number it at interesting look dynamic for metric not I think a we to patient have the we’re because metric right looking revenue forward, is the one per per quarter between is revenue really and we we’re -- as an balance. that of looking patient at is looking a increase patients the

have per much a revenue us that a the to $XX right, a the necessarily it’s the future, bring of down the patient, because business As our data for patient margin example, nature business, business might have not bad of you that in. of per you in an revenue but higher participate in

also call and of hopeful pricing metric. of the lot put the higher as we year, one realistically, majority have talked impacting still the we growth at activities well. a place, kind growth this paying So And at women’s are international I would metrics contribution longer-term of will about But fact, that negatively moment, testing to we’re mix, our product into the A and as us. say to half to help our from year-end this are, revenue the that’s well. yes, product lift strategy dividend of from in margin business, health the second help especially the of

Operator

now Julie We Qin have Morgan. of JP

Julie Qin

already So, have just I follow-ups. has covered. a lot two been quick

or product on indications, going versus term plan in differentiate First beachhead can the specifically, lung, PCM, for the near you talk are you are you start? certain to And going competition? how about focus on to example, pan-cancer the you at

Sean George

Yes.

was So, when detect out would technology And technologies on is new we’re also widely to finely going studies the consider characteristics very independent And threaded, all the technology new find other of this underpinning a to of especially dozens technologies, thing comb puts the around to that there. if the or resistance and needled the the think multiple a understood versus variants, in very any and of there. targetable And to out you other I detect peer-reviewed will market. I that the that differentiation, most recurrence whether position a to you of the literally say, are world. ability at speaks new variants, The finely claim known. technologies one good performance mutations include The by think pan-cancer that impact dozens, competitive us think patient’s pretty shape are there to credible helping we the on I published -- really specificity well way that start. and sensitivity of the tumors, give

good the folks to this call who of very very on doing kind have thing. We good relationships are channel, a

genetics. we our selection an heritage brand therapy as mentioned, in the have include We And combination. established in when I

the or I be test compelling one for those to course but one think another, capabilities for best what the specifically combination is to seeking, not oncologists together another of all or will understand simply or answer many going market. I growing in on what years here of to next we the patient rapidly life And be front compete them. intend think to of the dynamic extend and immensely how over that’s the is

Julie Qin

terms impact are you whether PacBio? with reduction And additional partnership Great. next your burn comment to then, of years, development would line the three over That’s the time in that cash helpful. the able for

Sean George

costs of of Yes. yield excited to things very our improvement reduction partners Pacific -- in to of, and variants our to something that the a in with find and Biosciences, No, be continue and the quality the business. is we’ll more that at essential absolutely genomes diagnostic no, is we’re the part higher

there The this announced out with in far lines at are, time started nature. we working when fairly we’ll we’re we them in continue the So, as beginning on thing, that.

our to but We them, them with shift continue a this we continue they see when on with at working those, bring to track don’t involvement point in life. that

Operator

Andrew have Raymond We James. now of Cooper

Andrew Cooper

of a A going to you can a about fact margins, we I’m the going when a we that’s mix products as you lot with the give way. asked, the just different been When of part think you higher-margin maybe do think something talked well. so year, Obviously, that. exit that has have rates in say products big about new about becoming to little for the some a piece bigger ask a of of sense the bit are for to

that kind launched yet us the on little to of current XX-plus as much help to that through rate? is things think exit set not how cadence get bit of relying today product and exists core just of it a are the the So versus

Sean George

majority XX exit keep the that vast say, product Yes. is the the for portfolio. rate, revenue That’s mind I’d current from -- of in

scale -- cost short we improvement the products, answer from offered from newly come don’t year. is scale there. this products accelerated to people uptake could got So, for They help lot although, out typically get currently typically Benefit again, first. higher-margin the of the a out products. growth cost of That’s kind and that of and remind launched

out about pushing to side of actually We from as now. we that’s of some burn, look mind not cash exit said, of get we us worth something But move in of asked, in more the And out time, we we certainly, you this as like allowing probably said, of to going be to. time ‘XX the that’s volume think want spend margin cash to to start about see And current overly for in relatively and whole we’ve objectives expect like given expect QX, quarter it that, But of of products given again, our we mentioned, the if former is higher a isn’t got improvements as flat that targets something I think hit margin on, soft part the beyond So, which, -- but which since and I looking that really should speaking improvement keep lot our do the products think expect to this then, people on of ‘XX not something I near-term which, gross higher the the case to data that things ‘XX, revenue I question year, we that is secure. at XX%. and category, really out to concerning. runway, the coming other above this of volume, talking margin particularly part year. story I

Andrew Cooper

the can there folks when talking and on Okay, of turnaround mean, kind field great. other see tumor-informed the customers? mean, one landscape your That’s are out super on of there matter the matter the not you and site in how kind some maybe we on well. or to PCM as competitive I does more turnaround time initial helpful. then maybe process just I times see there. much And

kind want just do answer therapy, surgery about how or with to an a need sweet of and importance is you you I a what the speed? patient as spot where for done to get that get view to So, sense they’re of to start

Sean George

don’t the matters. business. therapy it’s say mind would selection our at the time it introduced is monitoring I that I of that the going take we and turnaround in is on in -- to be to as a -- to market therapy it’s really end to use yes, look that that our competitive. start-to-finish I a will believe I And One the we very we just we’re lap reducing think going of if the always got have the chunk the started, useful. therapy super on of then, the keep monitoring and And important. majority is We monitoring And it’s back tools. on to those, new both try the at we anything, -- years to time but we Speed total -- and victory thing selection be view or a you nice combined selection of genomics The -- then, will mentioned, turnaround this And hands speed the were good company we of just time to important. come. And concept and know, industry. working time for think we’re is time

Operator

further no questions this at have We registered time.

to closing I’d team the So, management some hand like to remarks. it back for

Sean George

Thank right. very you, forward future All you look everybody. much. conferences. I you seeing to in Thank

Roxi Wen

Goodbye.

Operator

does That you. conclude Thank call. today’s

day. your You enjoy lines, may the and now disconnect your of rest

Invitae (NVTAQ) 4 May 222022 Q1 Earnings call transcript