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Centogene Q4 Revenues Soar 52 Percent as Loss Widens

This article has been updated with additional information from Centogene's earnings call.

NEW YORK – Centogene on Thursday morning reported a 52 percent year-over-year increase in Q4 revenues, driven by its pharmaceutical business, and a 21 percent increase in revenues for 2019.

"To date, we have been able to operate our business throughout this crisis without too much disruption," said Centogene CEO Arndt Rolfs during a conference call to discuss the financial results, commenting on the COVID-19 pandemic.

Centogene, headquartered in Rostock, Germany, reported €15.2 million ($16.4 million) in revenues for Q4, up from €10.1 million in Q4 of 2018. Analysts, on average, had predicted $15.05 million in revenues.

Of those revenues, €8.0 million came from its pharma business, representing 110 percent growth, and €7.2 million from its diagnostics business, which grew 16 percent over the previous year's quarter.

Centogene's rare disease repository has grown to approximately 500,000 patients in 120 countries, up from 380,000 patients a year ago. In February, the firm received accreditation from the College of American Pathologists for its biorepository, the first outside the US to do so.

In addition, in March Centogene started providing COVID-19 testing and acquired a lab in Hamburg from Provecs Medical this month where the testing will be conducted. Centogene expects that COVID-19 testing, for which it uses Roche LightCycler real-time PCR technology, will generate additional revenues of an unspecified amount.

About 75 percent of Centogene's employees currently work from home, Rolfs said, but the firm is now taking steps to gradually reopen its offices.

The company's Q4 net loss was €5.0 million, up from €3.5 million during the year-ago period.

The firm had €3.5 million in R&D expenses in Q4, up 40 percent from €2.5 million the previous year. Its SG&A expenses totaled €9.8 million, up 42 percent from €6.9 million a year ago.

For full-year 2019, Centogene booked €48.8 million in revenues, up 21 percent from €40.5 million in 2018. Of those, €27.3 million came from its diagnostics business, which grew 18 percent year over year, and €21.5 million from its pharmaceutical business, which grew 24 percent.

Of the pharmaceutical revenues, €14.5 million came from existing contracts, representing 20 percent growth over 2018, and €7 million from new contracts, representing 35 percent growth over 2018.

The company started 28 new pharmaceutical collaborations in 2019 and had 76 active or completed collaborations at the end of the year with 39 pharma firms, covering 45 rare diseases.

New collaborations included an agreement with Pfizer to access Centogene's data repository for the discovery and validation of new genetic and biochemical targets for rare disease therapies, and the extension of an agreement with Shire, a subsidiary of Takeda Pharmaceutical, to provide diagnostic services in 2020 and to conduct research-related hereditary angioedema (HAE) kininogen testing.

Of diagnostic revenues in 2019, €24.5 million came from tests other than noninvasive prenatal testing (NIPT), representing 24 percent growth, and €2.8 million came from NIPT, 14 percent less than in 2018, which reflects the firm's de-emphasis of this test.

Centogene had 51,600 test requests in 2019, up 22 percent over the prior year. Of those, 29 percent were related to whole-exome sequencing and whole-genome sequencing, 21 percent to standard genetic testing, 15 percent to panel sequencing, and the remainder to NIPT and biochemical testing. The firm said it expects the fraction of WES and WGS test requrests to continue to grow in the future.

Net loss for the year totaled €20.8 million, up from €11.3 million in 2018.

The firm's R&D expenses for the year came to €9.6 million, up 52 percent from €6.3 million the year before. This increase was primarily due to the expansion of the company's proprietary information platform, as well as due to the development of new products and solutions.

S&GA expenses in 2019 totaled €32.4 million, up 24 percent from €26.1 million in 2018, primarily due to an increase in personnel costs and operating expenses as a result of the expansion of the business. Costs were also higher because of increased investment in IT infrastructure and data security.

The company ended the year with €41.1 million in cash and cash equivalents.

Due to the uncertainties surrounding the ongoing COVID-19 pandemic, Centogene did not provide financial guidance for 2020.

In mid-morning trading on the Nasdaq, Centogene's shares were down almost 2 percent, at $18.10.