NEW YORK (GenomeWeb) – NantHealth's revenues fell 6 percent year over year during the second quarter, the company reported after the close of the market on Thursday.
For the three months ended June 30, total revenues declined to $22 million compared to $23.5 million in the same period a year earlier, which included $4 million from a since-ended large implementation in its connected devices business segment, according to NantHealth.
The company reported growth in its two other business segments in the recently completed quarter. In its largest division, software, sales fell 10 percent to $19.5 million from $21.7 million in Q2 2017 due to steep declines in software-hardware and maintenance revenue that included last year's large implementation project. However, revenue from software as a service spiked to $16.2 million, a 9 percent gain from the year-earlier period.
Chief Operating Officer Ronald Louks said during a conference call that the SaaS boost was due in part to a contract that NantHealth's NaviNet communications portal landed with a "major East Coast payor."
Sales of sequencing and molecular analysis products and services more than doubled year over year to $924,000 million from $450,000. NantHealth also had a gain of 19 percent in home healthcare services as it banked $1.6 million in sales during Q2 2018, compared to nearly $1.4 million a year earlier.
At the American Society of Clinical Oncology's annual meeting in early June, NantHealth formally launched a previously discussed liquid biopsy test called Liquid GPS. The company said Thursday that it had 266 Liquid GPS tests ordered during Q2. That includes tests being used in molecular studies on 53 patients under a pilot annual subscription program, according to Louks.
NantHealth has booked about $150,000 in sales of Liquid GPS since the test became available in March, company officials said.
NantHealth also reported orders of 642 of its established GPS Cancer test in the quarter. That is down from 677 orders in Q1, but higher than the 379 reported in 2Q 2017.
Through its Eviti clinical decision support brand, NantHealth in May introduced Precision Insights Portal, a web application for ordering and receiving results of molecular tests, including GPS Cancer.
Despite lower revenue in Q2 2018, the Culver City, California-based informatics and molecular testing company narrowed its net loss to $23.4 million, or $.21 per share, in Q2 2018 compared to a net loss of $70.1 million, or $.58 per share, a year ago. Adjusted EPS was $.10 per share.
R&D expenses declined by nearly 30 percent year over year to $5.9 million from $8.4 million. SG&A costs dipped to $18.4 million, down by 4.3 percent from $19.2 million in the second quarter of 2017.
As of June 30, NantHealth had $29.4 million in cash and cash equivalents.
To fund ongoing operations, NantHealth said that it has secured a $100 million line of credit from sister company NantCapital, the investment vehicle of NantHealth Chairman and CEO Patrick Soon-Shiong. Louks said that the firm has not yet drawn on that credit line.
Soon-Shiong said on the call that the new financing is to fund future operations while NantHealth works through the process of convincing payors to cover its molecular diagnostic tests. "We have real confidence in the company, real confidence in the science, real confidence in the product. We just have to work on the reimbursement," Soon-Shiong said.