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Exagen Q3 Revenues Rise 4 Percent Despite COVID-19 Pandemic Challenges

NEW YORK – Autoimmune disease testing firm Exagen said after the close of the market on Tuesday that its third quarter revenues increased 4 percent year over year.

For the three months ended Sept. 30, the San Diego-based company reported revenues of $10.8 million compared to $10.4 million a year ago, beating the analysts' average estimate for revenues of $8.9 million.

The company said that in Q3, its testing revenues dropped 5 percent year over year to $9.5 million from $10.0 million. Lower testing volumes were attributed to COVID-19 impacts and a decrease in average reimbursement per test.

Exagen's Simponi (golimumab) co-promotion initiatives contributed a more than threefold increase in revenues in Q3, up to $1.3 million from $400,000 in the prior-year quarter.

The company had entered into a co-promotion agreement with Janssen Biotech in December 2018 to exclusively promote Simponi, a biologic prescribed in combination with methotrexate in the US for the treatment of adults with moderate-to-severe rheumatoid arthritis. 

Exagen said that despite reduced patient visits resulting from the COVID-19 pandemic in Q3, it delivered 26,201 Avise CTD tests, which are used to detect lupus and connective tissue diseases. The number of ordering healthcare providers was 1,665, with a record 600 adopters, the company added.

Further, an agreement with Humana Tricare East led to in-network coverage of its Avise tests for approximately 6 million lives, and an agreement with Provider Network of America led to the tests' in-network coverage for 8 million lives.

Exagen said it has expanded its testing solutions for rheumatologists by launching Avise Vasculitis AAV, a panel to monitor anti-neutrophil cytoplasmic antibody-associated vasculitis. 

In the third quarter, patients continued to have challenges visiting their healthcare providers due to the COVID-19 pandemic, Ron Rocca, president and CEO of Exagen, said in a statement, adding, "Despite these headwinds, our testing volumes have approached the level of Q1 2020 volumes, which were only marginally affected by COVID-19."

The co-promotion agreement with Janssen continues to supplement its top line and enhance its gross margin, Rocca added.

Rocca said on a conference call to discuss Exagen's financial results that the firm is developing a test for fibromyalgia, with a large addressable market. "While not an autoimmune disease [fibromyalgia] is often confused with connective tissue diseases and is therefore frequently diagnosed by rheumatologists," he said.

Additionally, Exagen's Avise CTD test combines lupus biomarkers with markers for organisms that often overlap with the condition, providing the convenience of taking one instead of several tests, Rocca said.

Meanwhile, in a partnership with Brigham and Women's Hospital, the firm is exploring whether COVID-19 patients are exhibiting autoimmune disorders at a faster rate than patients without the coronavirus, Rocca added.

He further announced that Chet Burrell is retiring from Exagen's board of directors, effective Dec. 31.

The company reported a net loss of $4.3 million, or $.34 per share, in Q3 2020 compared to a net loss of $3.1 million, or $11.29 per share, in Q3 2018, and beating the analysts' average estimate for a loss of $.48 per share. The weighted-average number of shares used to compute the per-share loss figure in Q3 2020 was about 12.6 million shares, up from 1.5 million shares in the year-ago period.

Exagen went public in September 2019.

In Q3, Exagen's R&D spending doubled year over year to more than $1.0 million from $507,000, while its SG&A spending rose 26 percent to $9.2 million from $7.3 million.

The company finished Q3 with $61.4 million in cash and cash equivalents.

Exagen shares were up more than 2 percent to $16.50 in morning trading on the Nasdaq.