NEW YORK (GenomeWeb) – Invitae reported Tuesday after the close of the market that it generated $1.2 million in first quarter revenues, a 10-fold increase from $118,000 in Q1 2014.
Invitae's revenues beat the consensus Wall Street estimate of $1.1 million.
The company billed 2,200 reports, marking 23 percent sequential growth from the fourth quarter of 2014. Invitae went public in February, netting $116 million in total gross proceeds.
Invitae's net loss for the first quarter was $18.6 million, or $1.09 per share, compared to $9.0 million, or $12.06 per share, in Q1 2014. Invitae used about 17.1 million shares to calculate net loss in the first quarter compared to 749,048 shares in the year-ago period. The average analysts' estimate was a loss per share of $.51.
Its R&D spending rose 70 percent to $8.5 million from $5.0 million in the year-ago period. SG&A costs also grew during the quarter to $8.1 million from $3.6 million.
During the quarter, Invitae focused on launching new gene testing. In this regard, the firm expanded its test catalog to include four new cancer-related genes, including full sequencing of CHEK2, a gene associated with increased cancer risk. The company also introduced a new hereditary high-risk gynecologic panel.
"We are well on our way toward our 2015 goal of expanding our content to over 500 genes, and in turn, to reach our goal of offering 1,000 clinically reported genes for less than $1,000 in 2016," Invitae COO Sean George said during a call with investors to discuss earnings.
Invitae ended the quarter with $68.3 million in cash and cash equivalents.
Additionally, the company announced new pricing schemes that will become effective as of June 1 for all its tests offerings. For third party payors where Invitae is out of network, the tests will be priced at $1,500 per indication. Institutions and payors with which Invitae has contracts and which bring Invitae in network, the price per test indication will be $950. Patients whose doctors have ordered tests online and who have decided to pay out of pocket will pay $475.
Invitae's new pricing strategy, particularly the first two pricing points, is aimed at diversifying the payor mix and giving customers an incentive to move to institutional pay. The $475 price point is aimed at bringing in patients for whom doctors have a clear medical reason for testing, but whose insurance policies don't cover the test.
The $475 patient price point is also in response to competition, Invitae CEO Randy Scott acknowledged. In April, genetic testing firm Color Genomics launched with a clinical-grade, comprehensive genetic sequencing test for breast and ovarian cancer risk that analyzes 19 genes, including BRCA1 and BRCA2, with a $249 price tag.
"Opening up the patient pay market, I think absolutely we're responding to competitive pressures that we're actually quite excited about," Scott said. "This is the direction the market is going."
According to Invitae Chief Commercial Officer Lisa Alderson, more than 170 new institutions ordered tests during the quarter, and the company now has ordering accounts with around 60 percent of National Comprehensive Cancer Network centers. Test requisitions mostly come from genetic counselors and geneticists, currently the company's primary target market.
According to Alderson the company is ahead of where it thought it would be in terms of reimbursement. The new pricing structure "will help to access new markets" and "should increase reimbursement and cash collection," she said during the call. The company currently has contracts with four private payors, including BlueShield of California, SelectHealth, Capital Health Plan of Florida, and Ohio State Health Plan. Invitae reaffirmed its prior estimate of delivering between 14,000 and 17,000 billable tests to customers by year end.