NEW YORK – GeneDx said on Monday afternoon that it will reduce its workforce by approximately 10 percent as part of a plan to save roughly $40 million in annual operating expenses.
A year ago, GeneDx — at the time, still named Sema4 — had already eliminated about 500 positions, or a third of its workforce.
In addition, the Stamford, Connecticut-based clinical genetic testing company has entered into a five-year secured credit facility with Perceptive Advisors that will provide it with up to $75 million in cash. The financing includes an initial tranche of $50 million, subject to closing conditions, and a subsequent $25 million tranche, subject to certain timelines and other criteria. GeneDx plans to use the proceeds primarily for general corporate purposes including working capital and strategic investment opportunities.
Under the terms of the agreement, Perceptive will receive warrants to purchase 800,000 class A shares of GeneDx stock on the closing date with an exercise price of $3.17. For the second tranche, Perceptive will be issued warrants to purchase another 400,000 class A shares.
GeneDx also reported its earnings for the quarter ended Sept. 30. Revenues, almost all from diagnostic tests, totaled $53.3 million in Q3, down 36 percent from $83.2 million in Q3 2022. Analysts, on average, had expected $52.4 million in revenues.
Excluding the discontinued Sema4 diagnostics testing business, revenues increased 7 percent to $50.4 million from $47.2 million a year ago. Revenues from exome and genome sequencing tests increased 42 percent year over year from $24 million to $34 million.
The company ran almost 58,000 tests in Q3 compared to nearly 45,000 tests during the same period in 2022.
Its net loss for the quarter totaled $42.3 million, or $1.64 per share, compared to a net loss of $77.6 million, or $6.72 per share, in Q3 2022 and missing the average Wall Street estimate of $1.31 per share.
R&D expenses for the quarter were $14.3 million, up 7 percent year over year from $13.4 million, while SG&A costs totaled $42.9 million, down 52 percent from $89.3 million in the year-ago period.
As of Sept. 30, GeneDx had $87.4 million in cash and cash equivalents and $26.9 million in marketable securities.
The company lowered its revenue guidance for 2023 to between $187 million and $192 million from a previous range of $205 million to $220 million. The firm still predicts it will become profitable in 2025.
In morning trading on the Nasdaq, GeneDx's shares were down 13 percent at $2.31.