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Invitae's Q4 Revenues Increase More Than Threefold

This article has been updated to include additional information from Invitae's earnings call held Tuesday.

NEW YORK (GenomeWeb) – Invitae reported on Tuesday after the close of the market that its fourth quarter revenues increased more than three-fold year-over-year.

The San Francisco-based genetic testing firm recorded $3.2 million in revenues for the three months ended Dec. 31, 2015, compared to $875,000 in the fourth quarter of 2014 and beat analysts' consensus estimate of $2.9 million.

Invitae said it delivered approximately 7,000 billable tests during the fourth quarter, a 36 percent increase sequentially from Q3, and accessioned around 8,000 samples.

Its net loss for Q4 2015 was $24.4 million, or $.76 per share, compared to a net loss of $15.3 million, or $16.56 per share, in Q4 2014. Analysts' consensus estimate was for a loss of $.72. The firm used around 31.9 million shares to calculate its net loss for Q4 2015 versus 924,139 shares for the calculation in Q4 2014. Invitae went public in February 2015.

The firm's R&D spending rose 75 percent year over year to $11.4 million from $6.5 million, while its SG&A costs increased to $10.6 million from $7.3 million.

For full-year 2015, Invitae reported revenues of $8.4 million compared to $1.6 million in 2014, and beat analysts' consensus estimate of $8.1 million. The firm delivered around 19,000 billable reports in 2015, marking a 400 percent year-over-year growth, and accessioned more than 20,000 samples during the year.

Its net loss in 2015 came in at $89.8 million, or $3.18 per share, compared to $47.5 million, or $56.14 per share, in 2014. Analysts, on average, had expected a net loss of $3.17.

Its R&D costs were $42.8 million in 2015 compared to $22.1 million in 2014, while its SG&A spending rose to $38.5 million in 2015 from $21.3 million in 2014.

The company finished 2015 with $73.2 million in cash and cash equivalents, $53.8 million in marketable securities, and $4.8 million in restricted cash.

The company estimates that in 2016 it will deliver between 50,000 and 70,000 billable tests, and reduce its cost of goods sold to below $500 per report by year end. Invitae said it will ramp up its menu of genes tested from 1,000 to 3,000, aiming to combine "all the world's medically relevant genetic tests into a single service" with a lower price point than most single-gene diagnostic tests.

"That will serve as the foundation for all future genetic testing for Invitae, to help bring genetics into mainstream medicine [and] help millions of people," Invitae CEO Randy Scott told investors and analysts during a conference call to discuss the results on Tuesday.

At the annual JP Morgan Healthcare Conference last month, Scott had dicussed the company's plans to launch new tests in the pediatric setting. During the call, company representatives elaborated that Invitae was launching a comprehensive pediatric cancer panel for solid tumors, hematologic tumors, and brain tumors.

The company launched numerous tests during 2015 based on the thesis that "more content leads to more volume," which so far has proven true. "We saw significant volume increases across all disease areas following each major and minor content release, especially in cancer," said Invitae COO Sean George. He noted that new launches in the cardiovascular space last year had also resulted in test volume growth in this space in December.

In 2016, the firm is planning to pilot programs in "genome management" by launching a prevention panel for healthy adults who want to learn about their risks for common, actionable genetic conditions. "Invitae will pool from the best of our content, including the most, common actionable genetic tests for cancer and cardiology," Scott said.

The offering will be for patient pay but will be offered through the medical community. Within Invitae's tiered pricing structure, out-of-network and non-contracted institutions pay $1,500, in-network third-party payors and institutions pay as low as $950, and patients who do have insurance coverage pay $475.

The panel will gauge "key actionable genes" that the American College of Medical Genetics and Genomics and others have pinpointed as important in patient health. Invitae will also add carrier testing and pharmacogenetic assessments to its menu of offerings. "We plan to begin our efforts with the view that someday, everyone in a modern healthcare system will view genetics as a standard component of their health and wellness for preventative medicine," Scott said.

Last, year Invitae made progress on the reimbursement front, by publishing two peer-reviewed papers and signing its first coverage contracts. In Q4, the firm submitted a technology assessment data package to Medicare contractor Palmetto's MolDx program.

"Securing third-party pay for our tests, staring with Medicare, is one our main objectives for this year," Scott said, highlighting that Invitae is among the first in the industry to undergo tech assessment through MolDx for germline panel testing.

 

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