NEW YORK (GenomeWeb) – Invitae reported after the close of the market Tuesday a nearly 14 percent decline in second quarter revenues from the prior year, which was still better than the consensus Wall Street estimate.
For the three months ended June 30, the firm generated $46.2 million in revenues compared to $53.5 million in Q2 2019. The consensus Wall Street estimate was $39.6 million.
"While we experienced significant disruptions in the healthcare system due to the pandemic, we quickly established a solid recovery during the quarter," said Invitae CEO Sean George in a statement. "Our results highlight the strength of our operations and the benefits of our diversified menu, investments in telehealth capabilities and longstanding customer relationships, all of which position us to adapt and meet the changing needs of our customers."
Specifically, during the quarter the company launched new capabilities for its Gia chatbot, which Invitae garnered through its acquisition of Clear Genetics last year. Invitae added new workflows within Gia to support ObGyns, oncologists, genetic counselors, and others who order genetic testing. The company also increased the use of at-home, saliva-based sample collection kits since many people couldn't come into healthcare facilities due to the pandemic.
The firm accessioned more than 120,000 samples in Q2, up 8 percent from the year-ago quarter, when it accessioned 111,000 samples. The average cost per sample in Q2 rose 42 percent to $358 from $252 in Q2 2019.
In a call with market analysts, Invitae CFO Shelly Guyer noted that the pandemic affected the company early in the quarter but as the quarter progressed, test volumes steadily recovered due to the actions taken by the company. "Previously, we noted overall volumes were down approximately 50 percent when the pandemic first hit in mid-March and into April," Guyer said. "From these lows, we obtained volume recovery each month of the quarter and through July across all clinical areas."
The company's reproductive health test volumes have remained "resilient," while hereditary cancer, cardiovascular, neurology, and pediatric testing have "recovered nicely," according to Guyer. "Overall, we're down just slightly from our pre-COVID levels by the end of the second quarter," she said. "And July accessions and billable volumes continue to trend to recovery."
The company's net loss for the quarter widened to $166.4 million, or $1.29 per share, from $48.7 million, or $.54 per share, in Q2 2019. The average analysts' estimate was for a loss per share of $.70.
The firm's R&D spending for the quarter nearly tripled to $75 million from $25.3 million, while SG&A costs rose 35 percent to $70.4 million from $52.1 million.
During the quarter, the company closed the YouScript and Genelex acquisitions, and announced its acquisition of ArcherDx, which is slated to close in Q4. Invitae has committed $325 million in cash to close the deal.
Invitae ended the quarter with $428.5 million in cash, cash equivalents, restricted cash, and marketable securities.
Guyer noted that during Q2, Invitae received a one-time pandemic relief payment of $3.8 million under the CARES Act, which the company records as "other income." The negative impact from the pandemic will change how the company looks at test volumes for the rest of the year, she added. The company is now expecting moderate growth in test volumes in the third and fourth quarters.
"While we're presently seeing our top and bottom lines recover from the Q2 COVID-19 impact, that recovery continues to be very regional and still somewhat sporadic," said George, noting that despite the uncertainty in terms of how the pandemic will impact hospitals and clinics, Invitae's customers are committed to continuing to see patients. "Through our online and remote capabilities, we can further support them to transition rather seamlessly to this new reality."
In early morning trading on the New York Stock Exchange on Wednesday, Invitae's stock price had decreased around 5 percent and was trading at $31.45.