NEW YORK – Invitae reported after the market close on Tuesday that its total second quarter revenues rose almost 18 percent year over year, to $136.6 million, just shy of analysts' estimate of $136.85 million, and driven largely by the company's oncology business.
Invitae CFO Roxi Wen said on a conference call after the release of the financial results that within that segment, germline testing, therapy selection, personalized cancer monitoring, and companion diagnostics accounted for approximately $81 million in revenue, representing 14 percent growth year on year. Approximately $27 million in revenue came from Invitae's women's health offerings, representing 27 percent growth over the same period last year.
Wen also said that the firm's recent restructuring had an impact on the company's revenue growth. Nonetheless, she expected the second half of the year to remain flat compared to the first half, resulting in full-year revenue growth in the low double digits compared to 2021.
"About 15 to 18 percent of our 2022 revenue will not recur due to our plan to exit certain businesses," Wen said. "As such, this would set a new baseline in 2023. Offsetting this adjustment will be the growth of the remaining businesses in the range of 16 to 25 percent in 2023."
Invitae had recently announced plans to exit approximately 100 low-performing geographies, as well as its distributed oncology kit business.
"The kits business has several different offerings, of which we're having productive discussions with multiple parties," Wen noted.
Pharma and other commercial partnerships also helped drive revenue growth this quarter in the lab services and the data and data services areas, rising by 52 percent over the second quarter of 2022 to 232 partnerships.
Net loss for the three months ending June 30 was $2.52 billion, or $10.87 per share, compared to a net income of $133.8 million, or $.53 per share, for the second quarter of 2021.
Spending on R&D grew approximately 8 percent, to nearly $115.2 million in Q2 of 2022, from $106.5 million in the same period last year. SG&A expenditures for the quarter were $115.6 million, rising approximately 21 percent year on year from $95.3 million in Q2 2021.
For the recently completed quarter, Invitae also wrote down $2.3 billion of goodwill that Wen attributed to "a significant, sustained decline in the stock price and market capitalization as well as lower than projected national performance."
Nonetheless, Wen mentioned that Invitae has extended its cash runway through the end of 2024 and feels "very encouraged" by the early signs of success seen over the last quarters.
"We plan to hold our operating expenses at a stable level," Wen stated, adding that outside some adjustments in stock-based compensation, this was the firm's lowest non-GAAP operating expense as a percentage of revenue since the fourth quarter of 2020.
"We will be further reducing that figure by a significant amount going forward," she said, "as a result of multiple initiatives, including reduction in headcount, lab and office space, as well as [from] exiting starting businesses and geographies."
Invitae exited the quarter with $303.6 million in cash and cash equivalents and $423.1 million in marketable securities.
Invitae reiterated its cash burn guidance of $600 million to $650 million. Up to approximately $75 million of cash burn is expected to go toward realignment activities and severance, the firm said.
Cash burn for Q2 was $147 million, a $22 million reduction from the same period last year.
Investment bank JP Morgan downgraded Invitae shares to Underweight, citing uncertainties over how the company's restructuring will impact trends over the coming quarters.
"While we’re encouraged to see the company demonstrate an elevated focus on the path to profitability and take some long-overdue measures to refocus the portfolio," said analyst Julia Qin, "uncertainties remain around execution over the next 12-18 months, and we would like to see more evidence on the effectiveness of the restructuring program as well as the healthiness of the retained businesses."
In early trading on the New York Stock Exchange on Wednesday, shares of Invitae were up 22 percent at $2.81.