NEW YORK (GenomeWeb) – NantHealth reported after the close of the market on Monday that its third quarter revenues rose 76 percent year over year, thanks largely to a 252 percent increase in sales from its software platforms such as NantOS.
For the quarter ended Sept. 30, the company reported revenues of $25.4 million, up from $14.4 million a year earlier. However, it missed Wall Street analysts' average estimate for revenues of $26.4 million.
"The significant increase of total net revenue was primarily driven by a 252 percent increase in SaaS revenue," said Chairman and CEO Patrick Soon-Shiong in a statement. "We continue to make great strides in healthcare interoperability and connectivity.
Revenues from software-as-a-service rose to $14.6 million from $4.1 million a year ago. Revenues from software and hardware sales fell to $2.4 million from $4.5 million, maintenance revenues rose to $3.2 million from $2.9 million, sequencing and molecular analysis revenues rose to $77,000 from $75,000, and revenues from other services rose to $5.1 million from $2.8 million in Q3 2015.
The company said that 524 GPS Cancer molecular tests were ordered in the third quarter. It also noted that it has signed contracts with payors to cover the test for approximately 200,000 people so far, and is in talks with 17 additional payors to negotiate coverage contracts. After the end of the quarter, the company reported a coverage agreement with Horizon BCBS for a pilot study of the test in patients from health systems across the mid-Atlantic.
In September, NantHealth also signed an agreement with Children's Hospital of Orange County to use GPS Cancer to generate, analyze, and annotate the molecular profile characteristics of children, adolescents, and young adults with rare, recurrent, or refractory tumors.
That same month, the company signed a commercial licensing agreement with Phoenix Children's Hospital to provide the institution with the company's suite of precision medicine and healthcare IT solutions, including GPS Cancer and services on its NantOS cloud-based healthcare platform.
"With regard to our GPS Cancer Test, education in the oncology community is progressing rapidly," Soon-Shiong said. "As the oncologists begin to understand that this test better informs them and their patients as to the biology of the cancer and which drugs may or may not be effective based on the genomics and proteomics signature, adoption is progressing as evidenced by the over 100 percent increase in number of oncologists ordering the test. We are gratified to experience this response since we believe the test is as important to guide the physician as to which drugs not to administer as well as which agents may show sensitivity. … We have ramped up our efforts to educate oncologists in target markets, secured new payer coverage, and streamlined IT implementations."
NantHealth's Q3 net loss widened to $36.9 million, or $.30 per share, from $23.0 million, or $.24 per share, in the year-ago quarter. On an adjusted basis, the company reported a Q3 loss per share of $.18, beating the average analyst estimate for a loss of $.20 per share.
The firm's R&D costs for the quarter nearly doubled to $13.9 million from $7.0 million in Q3 2015, and its SG&A costs rose 36 percent to $24.7 million from $18.1 million.
NantHealth ended the quarter with $75.8 million in cash and cash equivalents.
The company's shares fell 10 percent to $10.05 in Tuesday afternoon trading on the Nasdaq.