GeneDx Reports Second Quarter 2023 Financial Results and Business Highlights

Original from: yahoo! finance

GeneDx Holdings Corp. (Nasdaq: WGS), a leader in delivering improved health outcomes through genomic and clinical insights, today reported its financial results for the second quarter of 2023.

“Our goal at GeneDx is to end the diagnostic odyssey for patients and their families, and with the growth in exome volume and revenue this quarter, I’m pleased to say that we’re increasingly realizing that mission,” said Katherine Stueland, President and Chief Executive Officer of GeneDx. “We are accelerating physician conversion to whole exome and genome tests, which is not only better for patient care, but also better for the business. We expect this growth to continue through the second half of the year, which gives us confidence to meet our full year revenue guidance. In addition, we are continuing to rationalize our operating expenses and reduce our cash burn as we move forward to gain efficiency.”

Pro Forma Second Quarter Financial Results from Continuing Operations

Pro forma results for GeneDx reported today include the combination of Legacy GeneDx and only the data and information business of Legacy Sema4, and assume Legacy GeneDx was owned for the entirety of 2022. Continuing operations exclude revenues and costs from the now discontinued Legacy Sema4 diagnostics testing business.

·    Revenue: Pro forma revenue for the second quarter of 2023 was $45.2 million, compared to $40.1 million in the second quarter of 2022, representing an increase of 13% year-over-year. Revenues from whole exome and genome tests were $28.7 million compared to $21.1 million in the second quarter of 2022, representing an increase of 36% year-over-year, and an increase of 28% quarter-over-quarter.

·    Test Volume: Total pro forma tests resulted in the second quarter of 2023 were nearly 55,000, compared to over 45,000 for the second quarter of 2022. Total whole exome and whole genome tests resulted were approximately 11,900, an increase of 56% year-over-year, and an increase of 36% quarter-over-quarter.

·    Gross Margin: Pro forma adjusted gross margin expanded to 37% in the second quarter of 2023 up sequentially from 34% in the first quarter of 2023

Total Company Second Quarter Financial Results

Total Company results reported today for the second quarter of 2023 include the combination of continuing operations and the now discontinued Legacy Sema4 diagnostic testing business. All comparable 2022 information presented below excludes any Legacy GeneDx revenues and associated costs prior to the second quarter of 2022 acquisition of GeneDx which closed April 29, 2022.

·    Cash Position: Cash and cash equivalents and restricted cash were $157.6 million as of June 30, 2023. Excluding financing proceeds, total Company burn for the second quarter of 2023 was $53 million, an improvement of 36% year-over-year and 10% sequentially.

·    Net Loss1: Total Company net loss for the second quarter of 2023 was $46.7 million. Total Company adjusted net loss for the second quarter of 2023 was $41.8 million2, an improvement of 37% year-over-year and 17% sequentially.

·    Revenue1: Revenue for the second quarter of 2023 was $48.7 million, compared to $36.2 million in the second quarter of 2022.

·    Gross Margin1: Gross margin for the second quarter of 2023 was 39%. Adjusted gross margin for the second quarter of 2023 was 42%.

Recent Business Highlights

Commercial Updates

·    Continued to expand access to services, including state rapid whole genome sequencing (rWGS) in Medicaid populations in Florida and Arizona

    - Eight state Medicaid programs now cover rWGS in the pediatric inpatient setting, and additional bills are pending in three states, including Massachusetts

·    Announced strategic partnership with Prognos Health to help rare disease patients rapidly gain access to potential treatment options, allowing commercial biopharma companies to leverage real-time data within Prognos Marketplace

·    Signed agreements with biotechnology companies to leverage GeneDx’s clinical and genomic data to advance drug development.

·    Increased the number of ordering clinicians by 39% in pediatrics and 55% in neurology through the second quarter of 2023

Scientific Updates

·    PacBio and GeneDx in collaboration with the University of Washington to study the capabilities of HiFi long-read whole genome sequencing (WGS) to increase diagnostic rates in pediatric patients with genetic conditions. 

    - Comparing long-read with short-read sequencing will help researchers explore whether novel variants, previously undiscovered by short-read technologies, may explain specific genetic conditions.

·    Published research using PanGenome Research-Tool Kit (PGR-TK), a computational tool for scalable analysis of clinically relevant genes within the human pangenome

·    Presented new data at the 2023 United Mitochondrial Disease Foundation’s (UMDF) Mitochondrial Medicine Symposium demonstrating urine mitochondrial DNA testing as a clinically impactful and non-invasive option for analysis of the m.3243A>G variant

·    Recently hired team of engineers with decades of experience in building genomic analysis tools to accelerate clinical interpretation artificial intelligence (AI) platform

Financial & Corporate Growth

·    Completed 1-for-33 reverse stock split effective on May 4, 2023

·    Appointed Devin K. Schaffer, JD, MBA as general counsel and secretary, responsible for all legal, compliance, and regulatory activities

GeneDx Pro Forma Full Year 2023 Guidance

GeneDx is reiterating certain previously issued full year 2023 guidance. The continuing operations of GeneDx, excluding revenues and direct costs from the now discontinued Legacy Sema4 diagnostic testing business, are expected to:

·    Generate revenues between $205 to $220 million for full year 2023;

·    Expand gross margin profile in 2023 and beyond; and

·    Turn profitable in 2025.

GeneDx is updating its previously issued cash use guidance and now expects to use $70 to $85 million of net cash for the second half of 2023, inclusive of servicing obligations of the previously exited business activities. The Company’s total cash burn in the fourth quarter of 2023 is expected to be nearly half of second quarter burn.

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Source: GeneDx Reports Second Quarter 2023 Financial Results and Business Highlights