Earnings call transcript Q1 2023

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Operator

Hello, everyone, and welcome to the Invitae First Quarter 2023 Financial Results Conference Call. My name is Emily, and I will be your conference coordinator today. [Operator Instructions] I will now turn the call over to our host, Hoki Luk. Please go ahead.

Hoki Luk

Thank you, operator, and good afternoon, everyone. in participating for you today's call. Thank

today CFO, Roxi us Robert are Science President our Kight; Daber. Ken CEO, Wen Dr. and Officer, Joining and Chief our

that the remind begin, operating reduction not are in results; financial company's the those and our that burn rates, Certain like strategic products, will future we make vision of and Safe includes on meaning Harbor to expectations our model, within Before and various call of and product I'd historical remarks and business we about that provisions business Private make this services constitute pipeline Act. of growth Reform future timing. the you the statements we points the future forward-looking Litigation Securities of realignment,

to that services actual across any particular difficult don't is XX-Q to on and from stated our demand and things, predict section most could recent additional results acquisitions, settlements. company restructuring in outlook. accurately other we titled you our future among our to Risk or refer Statements materially XX-K legal differ investments, We conclude the business Factors. assumes, therefore, performance It

information could differ from statements to current that actual results materially hereof. forward-looking of on speak expectations. additional These the as factors our only date cause For

To company's which ir.invitae.com. the the can GAAP in principles several visiting supplement non-GAAP our available We with in website our slide access are which release the measures. GAAP, of review accordance in consolidated monitor accounting section appendix reconciliations, press you of financial to at consider Investors earnings non-GAAP and and the statements deck, both the of you by the accepted or generally prepared in we United States, encourage to

will growth Daber guidance. well highlights first the our recent Today, cover quarter, the and discuss QX Roxi as financials to related our our our Ken PCM, key and on plan. and will metrics Dr. XXXX clinical updates as will discuss XXXX

Q&A. conclude will with then the call We

Ken. the over turn With that, call to I'll

Ken Knight

you We cash thank the team XX% and year-over-year reduced basis. today. margins plan. Thank all revenue, our you, for $XXX.X a growth year-over-year to which forma approximately first pro posted in In Hoki, and gross quarter, improved our us burn. Along with continued million against on joining execute is

side, upside. publication operational technology the believe drivers that nature, partnerships, on and on saw readout We from macro utilizing our our genetic and substantial efforts. robust. has the information PCM an And growth via On capital and encouraging for for space remain genomic in we benefited in enterprise-wide revenue our management the opportunity new testing

guideline of industry and advances technology, in advances. grow. expansion validation, the catalyst driving With been to and these is has recent reimbursement, clinical leader in poised Invitae many And a a

is nearly interpretation functional serving spectrum We and by This is have a capabilities. that modeling industry-leading capability bolstered X clinical a variant learning areas. of million patients diverse of machine our across result

We are scale. best at the positioned of provide industry-leading an to highest interpretation quality

We have a strong presence. commercial

we of regarded centers and have example, oncology genetic major provider and counselors For a become respected and among choice. are alike well

deep opportunity relentless to mainstream addressing information team medicine data innovation most patient of Our includes genetic approach dedicated the our bringing growth of partnership to our with into and largest with is and products and revenue outcomes. market pursuit that is mission our importantly, lead great comprehensive science and and better

in lead will And to closer profitable capital of be key look that areas beyond. to the and continues growth plan. our our we are business, in XXXX growth allocating we As foundation at our

oncology. start Let's with

forma a On and year compared oncology a in Our oncology the to business quarter basis, pro fee-for-services million approximately include biopharma. hereditary sales first with million, cancer was ago. our revenue testing $XX $XX

timing, due year-over-year flow contract to which lower and was varies. revenue fee-for-service Our

signs expansion, improved of testing, both underway improved and quarter. the practice April showing showing revenue in of low volume QX assist of we to hereditary efforts With and year-over-year and with cancer for providers. in non-genetic In this expert for we are rates. traction adoption growth These ahead growth year-over-year adoption are cancer guideline testing, hereditary reimbursement saw determined single-digit outcomes improved

exciting benefits updates recently also our as some MRD on in our announced published platform PCM were franchise, clinical We nature. technology

We optimistic will more this and drive Daber further PCM's efforts our are adoption this to Dr. will support from cover additionally gain reimbursement that in underscores payers. detail.

anchor germ our medium-term, comprehensive for the most ongoing the cancer. between risk with and of hereditary Together, who efforts synergies or they individual for for our somatic considering is line Looking physician offerings we at a diagnosed will valuable see one product. our options an at of

treatment, and We will prognosis, for information critical drug interactions family risk, provide monitoring.

saw In genetics and pediatric really cardio by forma QX the of driven in growth rare we neuro pro as disease as revenue year-over-year, panels. XX% well solid category, approximately

We of have programs to reimbursement also improve a rates. number introduced

efforts gross drive in growth Our profitable to already yielding are improved category. this margins

screening encouraged see continued pro particular, enhanced we to our well, carrier approximately health, to has drive are forma panel helped women's product performing is adoption. In In our momentum that year-over-year growth. thanks with XX%

We are our in productivity team, of consolidation. share with market industry light increased gains sales also seeing with along

effective are Invitae's prescription precise researchers partners to and to biopharma enable with of On and ultimately patient deepen journey, the the population. their side, most data we to the genetic data deliver patient a linking data therapy understanding and clinical, more claims

genetics in development and enabled in On will and The an discovery Deerfield we advance that drug exciting discovery development front, and data broad clinical March. diseases. data expertise Deerfield's announced has to our partnership from genetics-based drug the partnership and rare leverage partnership platform with us

We and to together on delighted work the potential explore strength. opportunities based are our respective

her working our provide initiatives, growth top capital. more and in will Roxi improve remarks we further details to On later. also cycle revenue working of are our

But updates go which minimal recent is monitoring will product into impressive journey. for we disease we cancer the surveillance before PCM, dig March is joined this for prognosis, residual like in words Medical Dr. a in deeper our Next, of clinical Dr. to our our and Korn. I'd demonstrating hired about us Chief during he Oncology; Officer value at later Medical the few Chief Michael recently PCM, oncology clinical say for year intersection the for Officer W. Korn He at large Precision founded at in a and of laboratory the the commercial laboratory. was led luminary commercial UCSF genomics Oncology Initiative the five him in initiatives. years. to Korn the will you additional we our as to oncology welcome provide many We of that the team. on coming months be getting I'm know sure updates and and Dr.

of to laboratory important Now made as current development helping that to been Daber is career. with the published data into us on of PCM call his the many Dr. updates insights founded. and lead as Daber, the Invitae is He commercialization for recently during Daber Hoki vast came well via additional XXXX since Invitae. Chief as Science initiative. he mentioned, are the plans. has to also with him to key technology Officer the Dr. provide on He Dr. our of experience Generosity, here other clinical And our elements we us Robert product both formation platform. which has this have with acquisition underlie our fortunate and

the call you, to over now Dr. Daber. I'll turn

Robert Daber

color Thanks, today. I appreciate the recent opportunity be I some TRACERx. and publication of with of to Ken, to shed you like call the on would on the all

presence. team in some and Let the leader study. X X London. spend tool. correlate genomic useful collaboration Stage a current his a as Dr. at on conducted is background Swanton University the giving up MRD me and a through for patients in with first cell followed ctDNA years a lung the molecular The study with of XXX PCM the outcomes to and College with pioneer involved use clinical Swanton of to non-small five our development research oncology represented cancer both first Dr. Charles minute and We technology

used detection our LDT up demonstrated recurrence. variants results include for treatment The detection been ctDNA we currently is of both assay and platform commercialized leverage same clinical a the tool variants. The goal to has PCM ctDNA the assay prognosis optimized to The to looked early to to study via technology, study the in our ultimate guide that to at maximize in of decisions. underlying the is Using sensitive up performance. XX XXX order

explored paper to cancer therapeutic At can of the view as testing interventions Currently, can we the be be showed integrate with XX and XX our of We input findings internal prognostic a of intensification journey. trials. nanograms surveillance, this used cell-free for other a AF, as consistent DNA XX.X% key greater in than X.XXX% specificity a the at context for studies. and work while level, across high of in with variant sensitivity information panel clinical largely

value defined patients, XX Now on were Out within patients detailed additional analysis. for of plasma patients period. study There was as analysis eventual of utilizing relapsed window Landmark collected samples value was detected XXX in available during about surgery. relapse, of via these a some of the and of positive to days Landmark XXX results. demonstrated predictive our early technology negative ctDNA their a the forecast XX%. to landmark predictive and PCM XX% patients, half

by In detection more the continued beyond Importantly, clinical landmark lead positive median than clinical recurrence sensitivity surveillance further was months. period. over the seven for was time patients landmark study, improved

prior of median As far standard of by was as relapsing today's time to detected patients care, compared imaging ctDNA months. value to to in the almost practical patients a four

XX.X%. patients, or and filtering was a qualifying based XX%, minimum study Clinical anomalies. known of additional XX.X% XX and were XX Specificity sensitivity on sensitivity patient of samples removing respectively. The with of and sensitivity specificity XX%, after assessed reported a yielded

These results delivered a few important takeaways.

patient analytical equivalent, compared performance previously demonstrated population. technologies better, First, this the study to if with not utilized

the validated alike need monitoring. that patients through the results a cancer ongoing data-driven for and create importantly, More process physicians PCM like treatment products for

-- PCM cancer detection value early And of prognostic in this large cohort overall a of for the residual disease technology recurrence, data of which well benefit demonstrated and the value as as patient's of cancer our journey. all patients,

the been I technology has and my purpose developments. comments gravity, validation a few recent both history there platform, for and of on the a While development PCM near-term focus of of will long

cancer detection. of clinical year the San breast data PCM over patients ability to breast of results of last were lead-time demonstrating a a presented, with Cancer Symposium, cancer XX.X Late study Antonio recurrence the technology's with recurrence months detect at in Breast

a was relapse-free limited done association studies are findings clinical by PCM detection routinely a These follow-up between where ctDNA There surgery. the only strong survival. important surveillance during are and also after in disease

impact Non-small assays nature Invite's validated the differentiated technology data the its study from performance. in TRACERx cell and cancer lung of were month, last clinical MRD published and PCM which

see to which hope validation study in Recently, we also the a months. submitted publication, coming peer-reviewed for we technical

and what study with validation to impact what and is else data, So, come? is readouts these the technical

points here. There are a key few make to

can more biopharma and platform, we the adoption. for more we the and customers that deliver the research volume be will technology this technology more validation biotech anticipate in and will the First, community. We effectively through activity market the data collaborators PCM generated drive on fee-for-service help potential

and needs other more achieve clinical considerations. maximum continue addition, allows while to real-world data In commercial to us product clinical performance patient our balancing optimizing

Invitae trial are our prospective design We further environment including our as PCM validate to in multi-cancer as breast, cancer cancer the lung, Maria our studies clinical currently other of optimizing studies, sponsored other well that CRC, types. a include platform benefit PCM ovarian and clinical

on are well as we adjuvant the obtain expanding to as addition, treatment In registry real-world assay utilization in study setting. our program data monitoring

identifying are existing cohorts allow We clinical collaborators further will to strategic that demonstrate patient with on also working populations. utility analyses in new retrospective patient

cancer enhance impact to the these indications. is time We and fully further cancer competitive care we studies many clinical clinically PCM before testing robustness additional objective become the treatments. readout for will genomic overall a can enhanced that trial to potentially drive and accelerate of the provide profile lines of as relevant and during address and Our standard efforts following expect our that proof

And call Q&A over session. Roxi? look your the to I Roxi fielding to will We in questions the discuss turn to financials. the that, with forward

Roxi Wen

Thanks, Bob.

quarter In providing We're our of to performance solid and the and on forma the on We first of reported revenue progress. XXXX, financial for clarity. pro quarter Moving had results. basis breakdowns we another in decline $XXX our result the product last and with The the of of exited reflects territories of million compared approximately fact revenue million summer. a realignment as $XXX lines, countries year. generated prior

business pro a around from forma the XX% last year. grow basis, On we

which data a impacted to offered exit details by and was and category by $XX million the partners timing cancer million of on disease, basis, oncology, size of from management network the quarter-to-quarter. health was the hereditary our contracts, our revenue including million. this from Data programs, the and category million This about pharmacogenomics reported kids projects. patient of NIPS fee-for-service products. at PCM partnership $XX from our sponsor Looking testing testing from pharmaceutical of testing includes $XX number carrier business fee-for-service business, women's data $XX vary business a rare and and services, other and including and testing

pro by In a in forma growth year-over-year Now, revenue creditory our contracts Overall, look profile X% basis. quarter-over-quarter lines. let's for offset we of partially growth and specific fee-for-service XX% modest the growth. business the oncology, lower revenue approximately form growth the at year-over-year our cancer. PCM on demonstrated performance in impacted around

group by our XX%, largely identification also our revenue by year-over-year, to Health as of XX% panel. led Data our our cardio, year-over-year, data pediatric over as contracts for grew thanks carrier partnership Rare management patient Women's tests growth efforts. primarily grew rose well programs around business led products. continued business testing and genetic business XX% neuro,

similar gross of quarter Non-GAAP of XXXX XXX% Non-GAAP the margin XXX% and of million QX was over the slightly operating to the QX $XXX quarter. XX.X% XXXX to in expenses or improved and XXX% revenue in QX in million in significantly to compared or in last revenue of XXXX, first which XX.X%, $XXX improved XX.X% in compared XXXX. was

cash $XXX million on securities December and March XXXX, Cash, $XXX on compared to restricted equivalents, totaled XX, to Moving marketable XX, cash on and performance. cash million XXXX.

and changed includes cash $XXX QX. with refinancing in million, total conjunction investment which in the the position by loan of linked $XXX first Our million term the paydown

our to we the burn the our burn the which million, represents was for about continue approximately XX% $XX cash business improve from ongoing In quarter, reduction first QX. prior and

In capital benefited in cash the ongoing reduction the addition of the inventory in management previous with realignment quarter, in improvement, also associated of the to quarter burn from first business. million particular, $XX Archer approximately AR first working

through the still further fundamental end capital closer we the for deliver at should be are burn we Looking anticipate guidance. levels of and efforts improvement to of the that year, working able to confident the this expected lower cash rest

we burn our million close to addition had rate, secured Lastly, capacity debt in us. to strong to $XXX position declining cash a with available also additional

that measured also previous quarter-over-quarter ordering the the Now of patient We're revenue. in percent further in we the $XXX. by the by is company When was happy cost metrics. comparison, future. exclude stepping QX quarters in and as In revenue. patients revenue per business revenues last improvement well as those you as variable stable XXXX were quarters for the to first the higher for the new can cash see continued to couple due productivity anticipate The patient baseline of has quarter. metrics per the divided of to total Revenue revenue improvement number quarter, the business been burn against a see kits three we

Moving financial our guidance. to

For XXXX, our to revenue guidance $XXX representing we're reiterating for more than million, low-double-digit year-over-year growth.

in anticipate year the XX% to XX% first breakdown We the the continue revenue to to be roughly half. XX% of to for second and half the XX%

additional of to We revenue. as as a percent product also mix color gave total expressed

Thanks quality and for in sustained expected more XX.X% Our year. lab to as continue well XX% non-GAAP to portfolio, chain margin operations, full the QX is be improvement to revenue supply from as gross the to XX% expand to logistics. in between higher our focused of

reduced burn ongoing of our we're million, guidance maintaining voluntary our the OpEx to by $XXX of guidance result from basis, continued improved towards of than ongoing and end line than this million an term at XXXX capital lower a growth, and are calls our but the will that figure. as is target gross repayment cash point. margin, loan, figures higher tracking a for driven we of cash range burn as expected XX% as previous improvement. On burn XXXX, our are be top improvement well This be working $XXX In optimistic the reported more cash

Ken. you, to Back

Ken Knight

summarize To today's Roxi. Thanks, call.

expert in channels. on track near-term growth to growth for business are catalyst are cancer and achieve expanding adoption our including focus, The XXXX non-genetic hereditary the First, to goals. we execution

expand ahead to are gross slightly cash of efforts and margins plan. reduce burn Our

PCM pathway improved all Second, preparation near-term of commercial evidence is we our and And sheet. in fee-for-service and adoption are clear, current becoming need balance oncology our in the payer more drive and physician addressed substantially for for recently we beyond our finally, to debt launch collected revenue. have our a being

remaining additional funding have potential capacity a secured also as option. We

the portfolio, of bets chapter mission, new recipe big path, are next for same Invitae. and again, So the and profitable integrated connected growth

it now over I'll you Operator, hand for questions. to

Operator

Thank comes you. first Puneet go ahead, with today Souda Securities. SVB question The [Operator from Please Instructions] Puneet.

Unidentified Analyst

to for for color Hi. potential PCM. healthy XXXX. wondering time was line your to appreciate I’m to Puneet. wanted on a if lung start start with We I details any, on to CMS Congrats some on indications Michael provide data, you have I Medicare? additional get the guess, getting the submit expecting through you reimbursement could and I you're on

Ken Knight

Hey, Bob, take that to do question? you want

Robert Daber

Sure.

studies we one was that this lung So our started cancer. had in earlier of

presented that And in last and a for we're evolving year, we and and mentioned additional us additional in in generating evidence anticipate this we areas had lung publication data indicated December then that colorectal well. was of ovarian. we've into We outside as really on have breast, focusing as breast

so And what so you are California, favorable private Medicare with evidence Shield to the Earlier conferences. parallel having Blue to generate form And coverage in as the Cross presentations year, and swing. in and as conversations at continuing full saw from payers. those are are of in all form this abstract parallel just the we're we're that well in proceeding doing of Blue additional clinical these in studies

Unidentified Analyst

I of you I was offer was you. the know some mentioned if I could details disease, you And you guess, segments? trend on Thank other wondering I any, some ASP any wondering seeing then by have rare Great. color if segment. improvement. on

Ken Knight

first take I'll is this that. Yes, part of that Ken.

happening the have ASP, reimbursement the and efforts at improving our looking market been we've our on working As rates. been see we really with unfolding, stability

working which and are kind profit on we in in significant our hard gross we rates, so And of showing up reimbursement but margin performance. is don't any see gross change ASP, our

Unidentified Analyst

one. have I If it makes quick Okay. sense. one just could Yes,

levered highlighting opportunities? women's these have from carrier I expanded peers been inclusion. how and Some microdeletion was screening also potential of upside some Invitae’s health your wondering guideline to much business to

Ken Knight

about bit. that our a been our carrier We've business we've women's to that's launched health some little from expanded improvements the able adoption some consolidation, driving ourselves, and just some to Yes. talked and it in and industry seen we product Roxi grab we've share. due carrier upside in definite general, seen better business,

of So more the product microdeletion in piece, We're for to Is far microdeletion have the we're option. offering. our prepared start demand the way good shape. as that we drive

ready and real prepared we're so turns And that, into that demand. for if

Unidentified Analyst

Great. you very Thank much.

Operator

with question Sachs. go Please comes from Sykes ahead, Matthew Our Goldman Matthew. next

Matthew Sykes

questions. Thanks first for you, good afternoon. Hey, burn. just for taking my the maybe Roxi, the one on cash

Just QX year, we be are burn run seasonality year? of would as making there those, at made think million and you've progress we reduce efforts that about, the the quarter, rate out more the of XX sounds that a like there but at imply step-up where guide in should the later impacts you're there is burn you've of the continue to something course or noting the a the decent burned in to over way Should that that. guide look it burn you or to that in some put look

Roxi Wen

Yes.

you, thank So for the question. Matthew,

we'll focused is company are entire something is continue and on. very We effort, -- this reduction burn cash our the

The and some that benefited -- improvement some RUO of business And the said, burn other end in most capital guidance, year, likely our assets this Archer lower we business units we that from the to being we XX, exited going is so cash to of with QX. QX confident that of closer reiterating as And the the we from pretty guidance. business. resulted the that be our total year we working are the exit

number, reflected through million our of working core year year. through well continue capital the So remaining will there's but end the as some on burn working fundamental that's cash capital of the the the as business $XX improvement improvement in

Matthew Sykes

do within dynamics you you've assuming any Got that of way. biopharma about how you, smooth because could as lumpiness you expect that within do to you if it. But some a think and it contracting business you Thanks, maybe grows? And can for Ken, that And you're the that could the as then out, business, business parse starting Do one kind fee-for-service Dr. remain PCM in companies just that? talk Roxi. I'm with that way to out or lumpy fee-for-service -- helpful Daber, the that little the see bit maybe about oncology would trending? you you're PCM be it tends on fee-for-service of business out or willing be kind you as to talked

Ken Knight

closer much to Yeah. myself. Dr. Daber is than so this

with if Dr. let I'll So Daber response, mind. you don't start

Robert Daber

Yeah.

So where is A it's really project-based of the a is to projects. due work the the this of of from lot large samples number nature cohorts. retrospective lumpiness

released board. And healthy and when on just of from those samples the so coming labs, we've coming got get central a of timing in based projects new on pipeline clients

grow And with think will as the given a samples now is lumpiness month-to-month in it but respect there, continue swings extremes basis? not so I we numbers still to as of just be funnel, that on the to where to large

Matthew Sykes

all Got Are keeping within group? it. within that Thanks. same overall you breakout fee-for-service And the any the of oncology?

Roxi Wen

this Matt, Rox. is So

you'll just pro included Just of Daber forma this revenue four for page back product the well. that quarter also the XXXX deck the on section, the revenue of to slide by prior the categories breakout Dr. in as starting And of in you the at see to QX by appendix add of as the see quarter each well. oncology our will said

Matthew Sykes

Perfect. Thanks, Roxi.

Ken Knight

-- And would Ken. I is this Yes. Matt, add

We put up some also have pipeline. shore commercial we making that into sure efforts

got determined we've pharma and product, grow are a great we to continue business. So to we're that

Matthew Sykes

very Thank much. you

Operator

no At have further [Operator Instructions] this registered. questions time, we

turn I'll to closing Ken call So remarks. the for back

Ken Knight

sharing to for all. a operator, Have in appreciate updates you, you, evening. and future. us look the joining call everyone, Well, today. near continued great afternoon and thank on you the with and more your support We forward thank Bye

Operator

This our may today. disconnect for you everyone, lines. call, your joining you, and now concludes Thank us

Invitae (NVTAQ) 9 May 232023 Q1 Earnings call transcript