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Invitae Q1 Revenues Jump 47 Percent, Fall Short of Expectations

This story has been updated from a previous version to add comments made by company executives during Invitae's earnings call.

NEW YORK (GenomeWeb) – Invitae reported after the close of the market Tuesday a 47 percent increase in first quarter revenues, missing analyst estimates due to seasonally lower accessioned test volumes.

For the three months ended March 31, the firm generated $40.6 million in revenue compared to $27.7 million in Q1 2018, and below the consensus Wall Street estimate of $47.2 million.

In a confererence call recapping Invitae's earnings, company executives noted that revenue fell short of analyst expectations due to several changes. These included a 10 percent reduction of Medicare rates under PAMA for cancer testing, adjustments to expected payments from acquisition-related reproductive tests, payor mix shift and collection issues with third-party institutional and pharmaceutical groups, and a lowered average revenue per test of $455.

"We've demonstrated that not only can more people benefit from genetic testing across all stages of life, but that artificially high prices and restrictive policies for such testing imposes unnecessary limits on the number of people that can receive the genetic information they need," Invitae Chief Medical Officer Robert Nussbaum said during the call. "Beyond cancer, we have found exactly the same to be true in other areas of medicine." 

The firm accessioned more than 94,000 samples in Q1, up 64 percent from the year-ago quarter, when it accessioned 64,000 samples. The average cost per sample in Q1 fell 19 percent to $226 in the first quarter from $279 in Q1 2018.

The company's net loss for the quarter widened to $37.7 million, or $.47 per share, from $36.1 million, or $.66 per share, in Q1 2018. The average analysts' estimate was for a loss per share of $.48.

R&D spending for the quarter increased nearly 17 percent to $18.0 million from $15.4 million, while SG&A costs rose 22 percent to $37.5 million from $30.7 million.

Invitae ended the quarter with $252.5 million in cash and cash equivalents in $28.7 million in marketable securities.

"We have capital totaling nearly $300 million, which we will invest in advancing the development of our total cancer care offering, accelerating the development and commercialization of our new direct channel for patients, and continuing to invest in further engineering capabilities to reduce costs, add content, and enhance the quality of our offering overall," Invitae CFO Shelly Guyer said in the conference call.

In February, Invitae partnered with BioMarin, Stoke Therapeutics, and Xenon Pharmaceuticals to expand its free genetic testing program for children with epilepsy.

In March, the firm completed a public offering of common stock, which resulted in net proceeds of $184.5 million.

In Wednesday morning trading on the New York Stock Exchange, Invitae's stock was down nearly 13 percent at $20.77.