NEW YORK – Sophia Genetics said Tuesday that its second quarter revenues rose 5 percent year over year, reflecting growth in adoption of its genomic analysis platform.
For the three months ended June 30, the firm reported $15.8 million in revenues, up from $15.1 million in the same period of 2023 and falling short of analysts' average estimate of $17.4 million.
On a constant currency basis and excluding revenue from COVID-19 testing, the firm said that its Q2 revenue rose 7 percent to $16.0 million.
During a call with investors and analysts, Sophia Genetics CEO and Cofounder Jurgi Camblong said that the results fell below the company's expectations and attributed this to challenges related to its BioPharma business and its efforts to penetrate the European market.
As it takes steps to resolve those challenges, Camblong said that the company has also reallocated resources towards its highest-growth markets, which include the US, the UK, Germany, the Middle East and Asia-Pacific regions.
"These decisions have already paid off as we signed major new customers in each of these regions this year," Camblong said, naming the Detroit Medical Center and the UK National Health System North Bristol Trust as two of the most recent.
The Swiss-American bioinformatics company said that it had 457 total core genomics customers as of the end of Q2, up from 434 customers a year ago. The firm also brough on 20 new core users during the quarter, driven by adoption of its solid tumor offerings and the recently launched MSK-ACCESS product.
The company recently announced a collaboration with Microsoft and Nvidia to launch a scalable whole-genome sequencing application on its Sophia DDM platform by the end of the year. Also coming by the end of 2024 is a decentralized version of Memorial Sloan Kettering's MSK-IMPACT test powered by Sophia DDM.
Sophia said it has already signed two customers to the application, several months ahead of launch. During the firm's conference call, Camblong said that one of those early signers is Abu Dhabi's National Reference Lab.
The firm's next step, Camblong said, will be a full modernization of the Sophia DDM platform planned for later this year. The update will move the firm's software from Java to web technology and micro-services.
"This upgrade not only creates [a] better experience for customers, but it will also enable us to compute data more efficiently and launch new applications more quickly," he said.
Although Camblong said that the US Food and Drug Administration's move to finalize new rules of lab-developed tests delayed some of its discussions with new customers, Sophia believes that the LDT legislation may make the market for the decentralized options it provides even more attractive than it is today.
Sophia's net loss for the second quarter was $15.2 million, or $.23 per share, compared to $21.4 million, or $.33 per share, in the year-ago quarter. Wall Street analysts, on average, had expected a loss of $.28 per share.
The firm's R&D spending in the quarter dropped 10 percent to $8.0 million from $8.9 million. It's SG&A costs shrank about 16 percent to $17.9 million from $21.2 million.
Sophia projects for full-year 2024 revenue of $65 million to $67 million, representing growth of 4 percent to 7 percent compared to 2023.
Sophia ended the quarter with $105.4 million in cash and cash equivalents.