Invitae Reports Third Quarter 2023 Financial Results

Original from: Invitae

Invitae (NYSE: NVTA), a leading medical genetics company, today announced results for the third quarter ended September 30, 2023.

"The Company executed well on key operating and financial metrics in the third quarter, and remains on track to meet or beat annual guidance," said Ken Knight, president and chief executive officer of Invitae. "On the operational front, we added key executive talent and achieved a number of clinical milestones that should strengthen the health of our business, deliver continuing market expansion and further differentiate our testing portfolio from competitors."

Third Quarter 2023 Financial Results

-    Third quarter revenue decreased 9% to $121.2 million compared to $133.5 million in the same period in the prior year, primarily reflecting the impact of exited businesses and geographies completed in 2022. After adjusting for revenue of $17.2 million in the prior year period related to the discontinued businesses, third quarter revenue increased approximately 4% on a pro forma basis, with U.S. hereditary cancer testing volume achieving double-digit percentage growth compared to the prior year period.

-    Gross profit was $39.1 million in the quarter, compared with $16.6 million in the same period of 2022, or 135.6% year-over-year growth. Non-GAAP gross profit was $63.6 million in the quarter, compared with $61.2 million in the third quarter of 2022, representing a year-over-year growth rate of 3.8%.

-    Gross margin was 32.2% in the third quarter, compared with 12.4% a year ago. Non-GAAP gross margin was 52.4% compared with 45.9% in the third quarter of 2022. This represents Invitae's ninth consecutive quarter of non-GAAP gross margin improvement.

-    Operating expense for the third quarter of 2023 was $1.0 billion, compared with $306.5 million in the third quarter of 2022. Operating expense in the third quarter includes $877.3 million in restructuring, impairment and other costs primarily related to an impairment charge of the Company's long-lived assets, compared with $125.2 million in the prior year period. Non-GAAP operating expense was $122.1 million for the third quarter of 2023, compared with $150.0 million for the third quarter of 2022. Non-GAAP operating expense as a percentage of revenue was 101%, compared with 112% in the third quarter of 2022.

-    As of September 30, 2023, Invitae had $264.7 million of cash, cash equivalents, restricted cash and marketable securities compared to $557.1 million as of December 31, 2022.

-    Net decrease in cash, cash equivalents, restricted cash and net changes in investments in the quarter was $72.2 million. Cash burn in the quarter was $64.1 million.

-    Total patients served as of September 30, 2023 was approximately 4.4 million with 64% available for data sharing.

-    Third quarter net loss per basic and diluted share of ($3.42) included impairment and losses on disposals of long-lived assets, net, employee severance and benefits and other restructuring costs of $877.3 million primarily related to fair market value assessment of the Company's intangible assets. Third quarter non-GAAP net loss per basic and diluted share of ($0.10) excludes this charge. Compared to a year ago, net loss per basic and diluted share and non-GAAP net loss per basic and diluted share were ($1.27) and ($0.42), respectively.

Operational improvement efforts and expense control have resulted in margin expansion and stronger financial performance. In addition, the Company is engaging with stakeholders to strengthen the balance sheet, and the Board of Directors has formed a special committee focused on improving the Company's capital structure. The Company is exploring a number of options, including, but not limited to, raising capital, asset sales, business and R&D refocusing efforts, capital expenditure and operating expense reductions and addressing its debt obligations.

Reaffirming Fiscal 2023 Outlook

For the full year, Invitae is reaffirming its fiscal 2023 outlook. The Company expects revenue in the range of $480-$500 million and non-GAAP gross margin in the range of 48-50%.

Ongoing cash burn includes cash, cash equivalents, marketable securities and restricted cash and excludes certain items. The Company continues to expect ongoing cash burn to be in the range of $220-$245 million in 2023. In 2023, cash burn will be higher than ongoing cash burn as a result of the Company's voluntary repayment of its $135 million term loan in the first quarter of 2023. 

Source: Invitae Reports Third Quarter 2023 Financial Results