NEW YORK – Centogene on Tuesday morning reported a more than fivefold year-over-year increase in Q2 revenues, largely driven by its COVID-19 testing business.
"We delivered a strong quarter on the top line and made meaningful progress on our strategic priorities," said CEO Andrin Oswald in a conference call to discuss the financial results. Q2 revenues were strongly driven by COVID testing, he said, "but most importantly, we're seeing the return of growth in our core business."
For the three months ended June 30, the rare disease diagnostics company, based in Rostock, Germany, reported €51.9 million ($61.5 million) in revenues compared to €9.7 million in the year-ago quarter, significantly beating the average Wall Street estimate of $41.4 million.
Q2 COVID-19 testing revenues totaled €42.3 million, up from €2.1 million a year ago. Meanwhile, revenues from the company's core business, which consists of clinical diagnostics and pharmaceutical contracts, increased 25 percent to €9.5 million from €7.6 million.
Specifically, clinical diagnostic revenues grew 81 percent to €6.7 million from €3.7 million in Q2 of 2020, while pharmaceutical revenues were down 38 percent to €2.8 million from €3.9 million last year.
Around 34 percent of its diagnostics revenues came from whole-exome sequencing, while 23 percent came from panel testing, 17 percent from standard genetic testing, 15 percent from whole-genome sequencing, 11 percent from noninvasive prenatal testing, and 0.1 percent from biochemical testing.
CFO René Just said during the call that diagnostics revenues increased primarily because of higher requests for whole-exome and whole-genome sequencing tests.
Pharma revenues decreased during the quarter because of the pandemic, but Centogene has already signed pharma contracts in the first half of 2021 that exceed those signed during all of 2020 in value, he said, including seven new pharma services contracts signed in Q2.
During the quarter, the company processed 679,900 COVID-19 tests. It also had 29,100 diagnostic test requests, up 54 percent from 18,850 in Q2 of 2020, and added approximately 24,000 patients to its bio/databank, which now has more than 650,000 patients.
Centogene also started a new collaboration with immunoneurology firm Alector to diagnose patients with frontotemporal dementia, a genetic neurodegenerative disease; extended its partnership with Takeda to diagnose patients with certain genetic disorders; and extended the Rostock International Parkinson's Disease (ROPAD) study, which now aims to recruit and test an additional 2,500 patients with Parkinson's disease.
Centogene's R&D expenses in Q2 totaled €4.1 million, up 32 percent year over year from €3.1 million, mainly due to increased personnel and IT-related expenses. Its SG&A costs totaled €12.4 million, up 22 percent year over year from €10.2 million, related to increased personnel expenses, legal and administrative costs, IT support, and data centers.
The firm's net loss for the quarter was €8.2 million, or €.37 per share, compared to a net loss of €10.4 million, or €.52 per share, a year ago. Wall Street analysts, on average, had expected a net loss of $.23 per share (€.19 per share).
As of June 30, Centogene had €34.8 million in cash and cash equivalents.
For all of 2021, the company expects to have total revenues surpassing those of 2020. Its core business is expected to grow in the second half of 2021, while the COVID-19 testing business, which is difficult to predict, will likely slow down, according to Oswald. "We are fully confident that we will return to solid core growth, not only in diagnostics but also in pharma," he said.
In morning trading on the Nasdaq, Centogene shares were up a fraction of a percent at $10.60.