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Centogene Q1 Revenues Grow More Than Fivefold Driven by COVID-19 Testing

NEW YORK – Centogene on Wednesday reported more than fivefold year-over-year growth in Q1 revenues, driven by its COVID-19 testing business, while revenues from other business areas declined.

"We experienced a solid start to the year — reporting strong revenues, supporting rare disease patients with best-in-class diagnostic testing, and establishing new pharma collaborations," said CEO Andrin Oswald in a statement.

For the three months ended March 31, the Rostock, Germany-based company reported €65.0 million ($78.9 million) in revenues compared to €12.1 million in the year-ago quarter, beating the average Wall Street estimate of $71.7 million.

Q1 COVID-19 testing revenues totaled €55.0 million, up from €13,000 a year ago. Core diagnostic testing revenues were €6.4 million, down 15 percent from €7.5 million in Q1 of 2020, while pharmaceutical revenues totaled €3.6 million, down 22 percent from €4.6 million last year.

Of the diagnostics revenues, around 33 percent came from whole-exome sequencing, 23 percent from panel testing, 17 percent from standard genetic testing, 16 percent from whole-genome sequencing, 10 percent from noninvasive prenatal testing, and 0.1 percent from biochemical testing.

The overwhelming majority of Q1 revenues — €55.5 million — came from Europe, with €52.4 million from Germany, followed by €4.6 million from the US and Canada, €4.2 million from the Middle East, and less than €1 million from Latin America and Asia Pacific.

During the quarter, the company received 852,200 COVID-19 test requests, up from 300 a year ago; 13,100 diagnostic test requests, up from 12,700 a year ago; 13,800 pharmaceutical test requests, down from 17,600 a year ago; and 2,900 test requests for its internal research projects, down from 1,900 a year ago.

The company also entered into five new pharma collaborations in Q1 and completed 16 existing collaborations, resulting in 55 active collaborations as of March 31, down from 66 at the end of 2020. Revenues from new collaborations totaled €76,000 in Q1, with no upfront payments.

Centogene said the Q1 drop in diagnostic revenues resulted from a pandemic-related decrease in test requests for whole-exome and whole-genome sequencing. Revenues for these two tests totaled €3.2 million in Q1, down 24 percent from €4.2 million during the same period last year. Also, requests for these two tests dropped 11 percent to about 4,000 in Q1 from 4,500 a year ago.

The decline in pharmaceutical revenues in Q1 was primarily due to the impact of the pandemic, which slowed clinical studies of its pharmaceutical partners, according to the company.

In a statement, Oswald pointed to the extensions of collaborations with Takeda Pharmaceutical and Denali Therapeutics, as well as to a new study with Alector, as evidence for Centogene's increasing pharma business. He said the firm will provide further information about its growth plans at its virtual investor event on June 22.

R&D expenses in Q1 were €4.3 million, up 59 percent from €2.7 million last year, while SG&A expenses totaled €13.5 million, up 32 percent year over year from €10.2 million.

Net loss for the quarter was €4.8 million, or €.22 per share, compared to €8.7 million, or €.43 per share, a year ago. Wall Street analysts, on average, had expected a net profit of $.05 per share.

The company said the recent recovery of its diagnostics business and newly signed pharma partnerships "indicate a return to solid core business growth for 2021." While the future of its COVID-19 testing business is hard to predict, this year the firm "anticipates revenues from the COVID-19 testing segment to be at least on par with 2020."

Centogene ended the quarter with €45.2 million in cash and cash equivalents.

In morning trading on the Nasdaq, Centogene shares were up a fraction of a percent at $10.25.

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