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Invitae Q2 Revenues Increase 43 Percent

NEW YORK (GenomeWeb) – Invitae reported after the close of the market Tuesday a 43 percent increase in second quarter revenues, beating analyst estimates.

For the three months ended June 30, the firm generated $53.5 million in revenue compared to $37.3 million in Q2 2018, and above the consensus Wall Street estimate of $50.7 million.

Invitae CFO Shelly Guyer said during an earnings call that 70 percent of the company's revenues came from third party payors, and just under 30 percent from institutions, industry partners, and patient self pay. She attributed the increasing revenue contribution from third party payors largely to Medicare paying for deletion and duplication analysis for hereditary breast and ovarian cancer and Lynch syndrome testing, and due to increased payments from insurers in general. 

The firm accessioned more than 111,000 samples in Q2, up 52 percent from the year-ago quarter, when it accessioned 73,000 samples. The average cost per sample in Q2 fell 10 percent to $252 from $279 in Q2 2018.

"Our progress in the first half of 2019 gives us confidence in our ability to deliver on our guidance of more than 500,000 samples accessioned and more than $220 million in revenue [this year,]" Invitae CEO Sean George said during the call.

The company's net loss for the quarter widened to $48.7 million, or $.54 per share, from $31.7 million, or $.47 per share, in Q2 2018. The average analysts' estimate was for a loss per share of $.46.

R&D spending for the quarter increased nearly 60 percent to $25.3 million from $15.8 million, while SG&A costs rose 68 percent to $52.1 million from $31.1 million.

According to Guyer, the company increased its sales headcount to approximately 190 reps at the end of Q2. Invitae also incurred additional marketing costs related to its non-invasive prenatal screening offering launched in mid-February and its direct access, or consumer-initiated test sales channel launched in early June.

During the quarter, in mid-June, Invitae announced it would acquire Singular Bio, a company specializing in single-molecule, cell-free DNA analysis that it is developing for non-invasive prenatal testing. More recently, the company announced the purchase of Jungla, which has developed a cloud-based platform for genetic variant interpretation.

During the call, company executives explained how these two acquisitions align with Invitae's overarching strategy of continuing to expand access to its menu of tests in the market while bringing costs down. George noted during the call that Singular Bio allows the company "to dramatically reduce" the cost of goods for non-invasive prenatal screening. "We think that will be essential in hitting some of the price points that we think will really unlock the true global demand for it," he said. 

Meanwhile, the company has spent a lot of money on variant interpretation efforts, and the platform from Jungla could lower its spending in this regard and also allow it to scale testing services. "It's really the volume throughput, which allows us to have much more control in driving those long-term costs down," Guyer said. 

Invitae ended the quarter with $254.0 million in cash, cash equivalents, restricted cash, and marketable securities.

In late morning trading on the New York Stock Exchange, Invitae's stock price was up around 9 percent to $27.18.