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Progenity Q1 Revenues up 46 Percent

NEW YORK — Women's health diagnostic firm Progenity announced after the close of the market on Thursday a 46 percent year-over-year increase in first quarter revenues.

For the three-month period ended March 31, 2021, Progenity reported $24.5 million in revenues, up from $16.8 million in the year-ago quarter and short of the consensus Wall Street estimate of $25.4 million.

The company did not provide year-over year comparisons for Q1 but said it performed 78,915 tests in Q1, down 3 percent from 81,640 tests in the fourth quarter of 2020.

Progenity CEO Harry Stylli said on a call to discuss the results that the turnaround of the core lab after the pandemic is continuing to gain momentum. He added that reimbursement for average-risk noninvasive prenatal testing and new carrier testing panels is getting faster and should accelerate as volume increases.

Stylli noted that the firm has stopped marketing its COVID-19 testing to focus on its core business opportunities, while CFO Eric d'Esparbes said the firm would no longer provide COVID-19 revenue guidance. D'Esparbes also said the bad weather in Texas throughout February affected demand dynamics for Progenity's tests in the first quarter.

Revenues for the quarter reflected an accrual of $188,000 recorded as a reserve for potential payer settlements, the San Diego-based company said.

Progenity posted a Q1 net loss attributable to common shareholders of $32.3 million, or $.56 per share, compared to the Q1 2020 net loss of $17.2 million, or $3.43 per share. The consensus Wall Street estimate was for a loss per share of $.81.

D'Esparbes said that the firm continues to target breaking even and eventual profitability by the end of 2022 or beginning of 2023.

The company's R&D spending in the quarter was up 4 percent to $11.7 million from $11.2 million year over year, while its SG&A expenses rose 17 percent to $36.9 million from $31.5 million.

During the quarter, Stylli said the firm made "significant progress" on its innovation pipeline programs, including its Preecludia rule-out preeclampsia test. The algorithm-based immunodiagnostic is expected to launch commercially in the fourth quarter of this year, he said.

Last month Progenity presented data from its verification study of the test at the American College of Obstetricians and Gynecologists' annual meeting showing the test demonstrated nearly 88 percent specificity and 97 percent negative predictive value.

The company is currently performing analysis on samples from its validation study and expects to share data from that study in June or July. Stylli said that it should positively contribute to revenues by 2022 and that the market opportunity in the US is between $2 billion and $3 billion. Preecludia will have a targeted launch and the sales force is currently being trained on the product, Stylli said.

Progenity also has been developing its Innatal 4 test, a next-generation version of its current NIPT, the Innatal Prenatal Screen test. Stylli said the test should be ready for commercialization toward the end of the second quarter of 2022.

The firm also is working on a gastrointestinal diagnostic product, PIL Dx, that involves a patient swallowing a capsule that can perform a range of in situ fluorescence-based tests without the need for capsule recovery, Stylli said. The data can be transmitted to a wearable receiver.

It's part of the firm's efforts to develop a bacterial detection system for small intestinal bacterial overgrowth infection, but Progenity also is interested in other infectious disease areas and colorectal cancer, Stylli said.

As of March 31, 2021, Progenity had cash and cash equivalents totaling $65.3 million.

In February, the firm raised about $25 million in gross proceeds from a private placement with two healthcare-focused investment funds.

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