Accelerated whole exome and genome test volume growth by 56% year-over-year
Total revenue of $48M in Q2 is inclusive of 36% year-over-year growth of exome and genome test revenue
Expanded gross margins and operating expense rationalization resulting in continued cash burn reduction of 36% year-over-year
Broadened network of strategic partners, including breakthrough research collaboration with PacBio and University of Washington
GeneDx to host conference call today at 4:30 p.m. ET
STAMFORD, Conn., Aug. 08, 2023 (GLOBE NEWSWIRE) -- GeneDx Holdings Corp. ( WGS), a leader in delivering improved health outcomes through genomic and clinical insights, today reported its financial results for the second quarter of 2023.
“Our goal at GeneDx is to end the diagnostic odyssey for patients and their families, and with the growth in exome volume and revenue this quarter, I’m pleased to say that we’re increasingly realizing that mission,” said Katherine Stueland, President and Chief Executive Officer of GeneDx. “We are accelerating physician conversion to whole exome and genome tests, which is not only better for patient care, but also better for the business. We expect this growth to continue through the second half of the year, which gives us confidence to meet our full year revenue guidance. In addition, we are continuing to rationalize our operating expenses and reduce our cash burn as we move forward to gain efficiency.”
Pro Forma Second Quarter Financial Results from Continuing Operations1
Pro forma results for GeneDx reported today include the combination of Legacy GeneDx and only the data and information business of Legacy Sema4, and assume Legacy GeneDx was owned for the entirety of 2022. Continuing operations exclude revenues and costs from the now discontinued Legacy Sema4 diagnostics testing business.
- Revenue: Pro forma revenue for the second quarter of 2023 was $45.2 million, compared to $40.1 million in the second quarter of 2022, representing an increase of 13% year-over-year. Revenues from whole exome and genome tests were $28.7 million compared to $21.1 million in the second quarter of 2022, representing an increase of 36% year-over-year, and an increase of 28% quarter-over-quarter.
- Test Volume: Total pro forma tests resulted in the second quarter of 2023 were nearly 55,000, compared to over 45,000 for the second quarter of 2022. Total whole exome and whole genome tests resulted were approximately 11,900, an increase of 56% year-over-year, and an increase of 36% quarter-over-quarter.
- Gross Margin: Pro forma adjusted gross margin expanded to 37% in the second quarter of 2023 up sequentially from 34% in the first quarter of 2023
Total Company Second Quarter Financial Results1
Total Company results reported today for the second quarter of 2023 include the combination of continuing operations and the now discontinued Legacy Sema4 diagnostic testing business. All comparable 2022 information presented below excludes any Legacy GeneDx revenues and associated costs prior to the second quarter of 2022 acquisition of GeneDx which closed April 29, 2022.
- Cash Position: Cash and cash equivalents and restricted cash were $157.6 million as of June 30, 2023. Excluding financing proceeds, total Company burn for the second quarter of 2023 was $53 million, an improvement of 36% year-over-year and 10% sequentially.
- Net Loss1: Total Company net loss for the second quarter of 2023 was $46.7 million. Total Company adjusted net loss for the second quarter of 2023 was $41.8 million2, an improvement of 37% year-over-year and 17% sequentially.
- Revenue1: Revenue for the second quarter of 2023 was $48.7 million, compared to $36.2 million in the second quarter of 2022.
- Gross Margin1: Gross margin for the second quarter of 2023 was 39%. Adjusted gross margin for the second quarter of 2023 was 42%.
Recent Business Highlights
Commercial Updates
- Continued to expand access to services, including state rapid whole genome sequencing (rWGS) in Medicaid populations in Florida and Arizona
- Eight state Medicaid programs now cover rWGS in the pediatric inpatient setting, and additional bills are pending in three states, including Massachusetts
- Announced strategic partnership with Prognos Health to help rare disease patients rapidly gain access to potential treatment options, allowing commercial biopharma companies to leverage real-time data within Prognos Marketplace
- Signed agreements with biotechnology companies to leverage GeneDx’s clinical and genomic data to advance drug development.
- Increased the number of ordering clinicians by 39% in pediatrics and 55% in neurology through the second quarter of 2023
Scientific Updates
- PacBio and GeneDx in collaboration with the University of Washington to study the capabilities of HiFi long-read whole genome sequencing (WGS, Financial) to increase diagnostic rates in pediatric patients with genetic conditions.
- Comparing long-read with short-read sequencing will help researchers explore whether novel variants, previously undiscovered by short-read technologies, may explain specific genetic conditions.
- Published research using PanGenome Research-Tool Kit (PGR-TK), a computational tool for scalable analysis of clinically relevant genes within the human pangenome
- Presented new data at the 2023 United Mitochondrial Disease Foundation’s (UMDF) Mitochondrial Medicine Symposium demonstrating urine mitochondrial DNA testing as a clinically impactful and non-invasive option for analysis of the m.3243A>G variant
- Recently hired team of engineers with decades of experience in building genomic analysis tools to accelerate clinical interpretation artificial intelligence (AI) platform
Financial & Corporate Growth
- Completed 1-for-33 reverse stock split effective on May 4, 2023
- Appointed Devin K. Schaffer, JD, MBA as general counsel and secretary, responsible for all legal, compliance, and regulatory activities
GeneDx Pro Forma Full Year 2023 Guidance
GeneDx is reiterating certain previously issued full year 2023 guidance. The continuing operations of GeneDx, excluding revenues and direct costs from the now discontinued Legacy Sema4 diagnostic testing business, are expected to:
- Generate revenues between $205 to $220 million for full year 2023;
- Expand gross margin profile in 2023 and beyond; and
- Turn profitable in 2025.
GeneDx is updating its previously issued cash use guidance and now expects to use $70 to $85 million of net cash for the second half of 2023, inclusive of servicing obligations of the previously exited business activities. The Company’s total cash burn in the fourth quarter of 2023 is expected to be nearly half of second quarter burn.
1 The pro forma unadjusted and adjusted results from continuing operations for the second quarter of 2023 and the comparable results for the second quarter of 2022 are presented on a pro forma basis assuming Legacy GeneDx and the Company were combined for the entirety of 2022 and exclude the revenues and costs from the now discontinued Legacy Sema4 diagnostic testing business, and include the combination of the Legacy GeneDx diagnostic business revenues and costs with the data and information revenues and associated costs derived from the Legacy Sema4 business. Actual results include the Legacy GeneDx business from the date of the Company’s acquisition of Legacy GeneDx on April 29, 2022, the purchase accounting associated with the acquisition of Legacy GeneDx, and also include the financial impacts of exited Legacy Sema4 business activities for the full quarter.
2 Adjusted gross margin and adjusted net loss are non-GAAP financial measures. See appendix for a reconciliation of GAAP to Non-GAAP figures presented.
Webcast and Conference Call Details
GeneDx will host a conference call today, August 8, 2023, at 4:30 p.m. Eastern Time. Investors interested in listening to the conference call are required to register online. A live and archived webcast of the event will be available on the “Events” section of the GeneDx investor relations website at https://ir.genedx.com/.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our future performance and our market opportunity, including our expected full year 2023 reported revenue guidance, our expectations regarding our gross margin profile in 2023 and beyond, our use of cash and our cash burn in 2023 and our turning profitable in 2025, our expectations for our growth and future investment in our business, our expectations regarding our plans to pursue new strategic direction, improve our operational efficiency and reduce our cash burn and our ability to scale to profitability, the associated cost savings of our business exits and impact on our gross margins. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) our ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (iii) the size and growth of the market in which we operate, (iv) our ability to pursue our new strategic direction, and (vi) our ability to enhance our artificial intelligence tools that we use in our clinical interpretation platform. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 16, 2023, and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.
About GeneDx
GeneDx ( WGS) delivers personalized and actionable health insights to inform diagnosis, direct treatment and improve drug discovery. The company is uniquely positioned to accelerate the use of genomic and large-scale clinical information to enable precision medicine as the standard of care. GeneDx is at the forefront of transforming healthcare through its industry-leading exome and genome testing and interpretation, fueled by one of the world’s largest rare disease data sets. For more information, please visit genedx.com and connect with us on LinkedIn, Facebook, Twitter and Instagram.
Investor Relations Contact:
Tricia Truehart
[email protected]
Media Contact:
Maurissa Messier
[email protected]
Pro forma select volume and revenue from Continuing Operations in the table below assume Legacy GeneDx was owned for the entirety of the applicable quarter(s) and are calculated based on the construct of our continuing operations inclusive of Legacy GeneDx combined with data revenues and associated costs from Legacy Sema4. Pro forma select metrics are presented for illustrative purposes only and are not necessarily indicative of the results that would have occurred had the GeneDx acquisition been completed on such dates or that may occur in the future.
Pro Forma Select Volume & Revenue from Continuing Operations
2Q223Q224Q221Q232Q23Volumes Whole Exome, Whole Genome7,5797,7227,8628,70511,855Exome based Panels3,1412,9833,0133,1363,472Hereditary Cancer7,3915,4456,0697,1207,142Other individual gene tests and multi-gene disease panels27,44628,76431,89133,81732,459Total45,55744,91448,83552,77854,928 Revenue Whole Exome, Whole Genome$21.1$24.0$23.3$22.4$28.7Exome based Panels$2.4$2.3$2.0$2.0$2.0Hereditary Cancer$3.8$3.5$4.4$4.3$3.8Other individual gene tests and multi-gene disease panels$10.5$15.6$14.3$10.6$8.6Data Information$2.3$1.8$1.9$1.3$2.1Total$40.1$47.2$45.8$40.7$45.2Unaudited Pro forma select financial information assume Legacy GeneDx was owned for the entirety of 2022 and is calculated based on the construct of our continuing operations inclusive of Legacy GeneDx combined with data revenues and associated costs from Legacy Sema4. Unaudited Pro forma select financial information is presented for illustrative purposes only and is not necessarily indicative of the results that would have occurred had the Legacy GeneDx acquisition been completed on such dates or that may occur in the future.
UNAUDITED PRO FORMA SELECT FINANCIAL INFORMATIONFOR THE THREE MONTHS ENDED JUNE 30, 2023(in thousands) GeneDx Continuing OperationsLegacy Sema4 Discontinued Business Combined GeneDx and Sema4 Revenue$45,226$3,480$48,706Adjusted Cost of Services28,452-28,452Adjusted Gross Margin$16,774$3,480$20,254Adjusted Gross Margin %37.1%-%41.6%2023 2022 (in thousands)Net (loss) income$(46,719) $(85,742)Interest expense, net (1,074) 408Income tax benefit (196) (49,077)Depreciation and amortization 10,332 8,964Stock-based compensation expense 108 22,721Transaction and acquisition costs — 9,099Restructuring 1,637 6,832Change in fair market value of financial liabilities (3,547) (28,182)Gain on sale of assets (2,954) —Third party payor reserve release (3,238) —Provision for excess and obsolete inventory associated with Legacy Sema4 2,620 —Other income, net (86) (56)Adjusted EBITDA$(43,117) $(115,033) Net (loss) income(46,719) (85,742)Stock-based compensation expense 108 22,721Depreciation and amortization 10,332 8,964Change in fair market value of warrant and earn-out contingent liabilities (3,547) (28,182)Transaction and acquisition costs — 9,099Restructuring 1,637 6,832Gain on sale of assets (2,954) —Third party payor reserve release (3,238) —Provision for excess and obsolete inventory associated with Legacy Sema4 2,620 —Other income, net (86) (56)Adjusted Net loss$(41,847) $(66,364)
2023
(unaudited) December 31,
2022Assets Current assets: Cash and cash equivalents$156,655 $123,933 Restricted cash — 13,470 Accounts receivable, net 32,710 42,634 Due from related parties 1,196 708 Inventory, net 11,531 13,665 Prepaid expenses and other current assets 11,185 18,212 Total current assets 213,277 212,622 Operating lease right-of-use assets 33,684 32,758 Property and equipment, net 43,332 51,527 Intangible assets, net 179,638 186,650 Long-term restricted cash 900 900 Other assets 5,559 6,485 Total assets$476,390 $490,942 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable and accrued expenses$54,767 $84,878 Due to related parties 4,338 3,593 Short-term lease liabilities 5,346 6,121 Other current liabilities 19,917 49,705 Total current liabilities 84,368 144,297 Long-term debt, net of current portion 6,250 6,250 Long-term lease liabilities 63,748 60,013 Other liabilities 22,411 22,000 Deferred taxes 2,250 2,659 Warrant liability 220 418 Earn-out contingent liability 1,030 1,600 Total liabilities 180,277 237,237 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred Stock, $0.0001 par value: 1,000,000 and 1,000,000 shares authorized at June 30, 2023 and December 31, 2022, respectively; 0 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively — — Class A common stock, $0.0001 par value: 1,000,000,000 and 1,000,000,000 shares authorized at June 30, 2023 and December 31, 2022, respectively; 25,761,147 and 11,773,065 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 2 1 Additional paid-in capital 1,528,240 $1,378,125,000 Accumulated deficit (1,232,129) (1,124,421)Total stockholders’ equity 296,113 253,705 Total liabilities and stockholders’ equity$476,390 $490,942
