NEW YORK (GenomeWeb) – GeneNews today reported a 98 percent drop in its first quarter revenues, reflecting the restructuring of the Canadian diagnostics company's billing process.
For the three-month period ended March 31, GeneNews' revenues fell to $4,463 from $190,752 in the same period a year earlier.
In 2016, the firm struck a collaboration deal with JTS Health partners — a consulting firm cofounded by one of GeneNews' directors — to help secure deals for its cancer risk assessment tests with hospitals and other healthcare organizations. As part of that arrangement, JTS assisted with the implementation of a new billing process at GeneNews subsidiary Innovative Diagnostic Laboratory, which required GeneNews to cease and later restart billing. GeneNews noted that invoicing for tests run but not billed during this period will be submitted to payors in the second quarter and collected thereafter.
"Test volume is expected to grow from this point forward," GeneNews Chairman and CEO James Howard-Tripp said in a statement. "Q2 is showing progress in cash received."
The company reported similar issues when it published its fourth quarter 2017 earnings in April, blaming an 81 percent year over year drop in Q4 revenues on ongoing changes in how it billed for its ColonSentry colorectal cancer blood test and other diagnostics.
"While not yet reflected in the company's financial results, we estimate our current outstanding billings at approximately $4 million and continue to anticipate that our recognized revenue will begin to grow in the months ahead," Howard-Tripp said at the time.
GeneNews' Q1 net loss narrowed to $578,583, or $.00 per share, from $1.5 million, or $.02 per share, in the year-ago period, in part reflecting a $600,000 change in warrant revaluation.
The company's general and administrative costs during the quarter fell 21 percent to $788,622 from $1.0 million.
At the end of March, GeneNews had cash and cash equivalents totaling $7,913.
Separately today, the company announced that it has raised roughly C$1.2 million ($938,000) through the closing of the first tranche of a private placement it had announced in April along with its Q4 earnings report. GeneNews issued 15.5 million units at a price of C$.08 per unit. Each unit consisted of one common share and one half of a common share purchase warrant, with each warrant exercisable for one common share at a price of C$.12 per common share for three years from closing of the placement.
"As we focus very strongly on execution, these funds will allow us to accelerate activities," Howard-Tripp noted in a statement. "It is structured to allow GeneNews to actively implement those plans that offer the greatest potential for immediate growth."