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NantHealth Q3 Revenues Tick Up Slightly

This story has been updated from a previous version to include comments made by NantHealth executives in an earnings call.

NEW YORK – NantHealth said after market close on Thursday that its third quarter revenue increased by less than 1 percent to $18.8 million from $18.3 million in Q3 2019.

The El Segundo, California-based company had total software-related revenues of $18.7 million, up 2 percent from $18.3 million in Q3 2019.  

The Q3 2020 software revenue total includes $18.4 million from software-as-a-service offerings, up slightly from $18.3 million a year ago.

During a conference call with analysts, COO Ron Louks said that NantHealth landed several unspecified new customers during the quarter for its clinical decision support product, thanks to its network of Evitii sales partners. 

Additionally, it had $299,000 in revenues from maintenance and $62,000 from professional services, thanks to its July 22 acquisition of the OpenNMS Group, an open-source network management company, for about $6.1 million. NantHealth reported no revenues from either business in the year-earlier period. 

The acquisition, Louks said, "provides a number of cross-marketing opportunities by leveraging NantHealth's data science and AI competencies and OpenNMS' network monitoring solutions for critical data flows. Additionally, we believe the acquisition will enable OpenNMS to substantially grow revenues by leveraging NantHealth's operation expertise and experience."

He added that OpenNMS gives the firm the opportunity to expand into other industries beyond healthcare but did not elaborate.

Meanwhile, revenue from sequencing and molecular analysis tumbled 82 percent to $49,000 from $276,000 a year earlier. NantHealth has previously said that it expects soft sequencing revenues until the firm receives a positive coverage determination from the US Centers for Medicare and Medicare Services for its  Omics Core technology, a whole-exome tumor-normal in vitro diagnostic that measures overall tumor mutational burden in cancer tissue and reports somatic mutations in 468 cancer-relevant genes.

NantHealth gained US Food and Drug Administration clearance a year ago for Omics Core. In May, the firm received a positive coverage determination notice from a molecular diagnostics service for NantHealth's Omics Core technology, a whole-exome, tumor-normal in vitro diagnostic that measures overall tumor mutational burden in cancer tissue and reports somatic mutations in 468 cancer-relevant genes, Louks said earlier this year.

"We continue to explore monetization opportunities" for the sequencing and molecular analysis business, Louks said.

NantHealth's net loss narrowed during the recently completed quarter to slightly more than $11 million, or $.10 per share, from $16.4 million, or $.15 per share, in the same period a year earlier.

The company's R&D costs grew 43 percent to $4.7 million from the previous year's $3.3 million. Its SG&A expenses decreased by 9 percent to $12.4 million from $13.7 million a year earlier.

The company had $25.9 million in cash and equivalents as of Sept. 30.

CFO Bob Petrou said on the call that the company expects to see about $18 million in revenues for the fourth quarter.

NantHealth shares opened Friday at $2.20, up 1 percent from Thursday's close at $2.17.