NEW YORK (GenomeWeb) – Invitae reported after the close of the market Monday a more than threefold year-over-year increase in second quarter revenues.
For the three months ended June 30, Invitae reported $5.6 million in revenues compared to $1.8 million in the year ago period, falling short of the consensus Wall Street estimate of $5.8 million.
Invitae grew its test volume by 170 percent year over year, billing more than 12,000 reports and accessioning more than 12,500 samples.
Invitae said that it reduced its cost of goods sold from $600 per sample in the first quarter down to approximately $500 per sample accessioned in Q2, getting close to its year-end goal of lowering its COGS to under $500 per sample.
During a earnings call with analysts, Invitae President Sean George said that in coming months the firm will implement a higher-throughput sample extraction platform, install a next-generation sample processing automation system, move testing from Illumina HiSeq 2500 to HiSeq 4000 platforms, make improvements to its sample targeting methodology, and improve workflow and automation in its clinical interpretation and reporting software. "All of these in turn are intended to continue the march of COGS reduction for many quarters to come," George told analysts.
The San Francisco-based company had set a goal of testing for 3,000 genes by the end of the year. During the call, Invitae CEO Randy Scott said the firm was "leapfrogging" this and "jumping to approximately 20,000 genes" by launching a medical exome test by the first quarter of 2017.
The test will have deep coverage for more than 3,000 clinically relevant genes and have basic coverage for the approximately 17,000 genes in the genome, Scott told analysts during the call. He noted that the exome sequencing test will be useful in resolving diagnostic odysseys and in assessing complex pediatric disorders, including developmental delay and intellectual disability.
Invitae's net loss for the second quarter was $24.8 million, or $.77 per share, compared to $24.3 million, or $.76 per share, in Q2 2015. The average analysts' estimate was for a loss per share of $.76.
Its R&D spending fell to $10.7 million from $11.8 million in the year-ago period, while its SG&A costs grew to $12.5 million from $10.2 million in Q2 2015.
Invitae ended the quarter with $31.6 million in cash and cash equivalents and $53.7 million in marketable securities.
Invitae said it established reimbursement with Aetna to be part of its lab network effective Aug. 15, and secured contracts with Blue Cross Blue Shield affiliates as an in-network lab providing testing for hereditary breast and ovarian cancer and Lynch syndrome. The company began receiving Medicare payments in April for its panel tests for breast cancer related disorders (reimbursed under CPT code 81432 at an interim rate of $622.53), and signed contracts with more institutional customers.
The Aetna contract is broad, Scott told analysts, covering tests across Invitae's panels, including tests for hereditary cancer and Long QT syndrome. Approximately 80 percent of Invitae's testing volume is in oncology, mainly in hereditary breast and ovarian cancer, according to chief financial officer Lee Bendekgey. "That is the indication for which most of the payors, including Aetna, have the clearest eligibility criteria and where coverage is easiest and most straightforward," he told analysts.
Invitae has a pricing scheme under which its tests are $1,500 per indication when they are out of network. For the institutions and payors with which Invitae has contracts and which bring Invitae in network, the price per test indication is $950. The price is $475 for patients whose doctors have ordered tests online and who pay out of pocket.
"With 95 million covered lives, we're now in a position to actively support [these insurers] moving other providers out of network and transferring the volume smoothly, as well as working with them as they put incentives into place for providers to shift genetic testing volume our way," George added.
Invitae said it has signed its first contracts with drug developers, such as MyoKardia and Parion Sciences. Scott said during the call that biopharma partners have approached Invitae wishing to access rare disease patients or genetic testing for targeted clinical trials. "This is the beginning of a network effect that will allow us to play a key role in directly newly diagnosed patients toward researchers and clinical programs that can help," he said.
Additionally, the company highlighted that it recently submitted data on more than 10,000 genetic variants into the National Institutes of Health's ClinVar, an archival database of genotype/phenotype relationships into which Invitae has made 22,000 submissions in total.