- Total Q1 Revenue of $22.3 Million,
Up 17% from $19.1 Million in Prior Year Q1
- SAAS Revenue of $16.2 Million in Q1,
Up 9% from $14.8 Million in Prior Year Q1
- Total Gross Margin increased to 50%
in Q1, Up from 40% in Prior Year Q1
- Study Results Demonstrating Benefits
of Performing Tumor/Normal DNA and RNA Sequencing Published in
Peer-Reviewed Medical Journal, Oncotarget
- Molecular Analysis Revenue for Q1
Increases 65% from Prior Year Q1
- 677 GPS Commercial Tests Ordered in
Q1, Up 12% from Q4 2017
- GPS Tests Ordered Continued to Grow
in Q1
- Restructuring Plan and Sale
of Provider/Patient Engagement Solutions Business Continued to
Reduce Operating Loss
Changes have been made to the "Supplemental Revenue Schedule"
and "Non-GAAP Net Loss and Non-GAAP Net Loss Per Share" financial
tables.
The corrected release reads:
NANTHEALTH REPORTS 2018 FIRST-QUARTER
FINANCIAL RESULTS
- Total Q1 Revenue of $22.3 Million,
Up 17% from $19.1 Million in Prior Year Q1
- SAAS Revenue of $16.2 Million in Q1,
Up 9% from $14.8 Million in Prior Year Q1
- Total Gross Margin increased to 50%
in Q1, Up from 40% in Prior Year Q1
- Study Results Demonstrating Benefits
of Performing Tumor/Normal DNA and RNA Sequencing Published in
Peer-Reviewed Medical Journal, Oncotarget
- Molecular Analysis Revenue for Q1
Increases 65% from Prior Year Q1
- 677 GPS Commercial Tests Ordered in
Q1, Up 12% from Q4 2017
- GPS Tests Ordered Continued to Grow
in Q1
- Restructuring Plan and Sale
of Provider/Patient Engagement Solutions Business Continued to
Reduce Operating Loss
NantHealth, Inc. (NASDAQ-GS: NH), a next-generation,
evidence-based, personalized healthcare company, today reported
financial results for its first quarter ended March 31, 2018.
Molecular Analysis – Highlights
- Expanded Molecular Analysis
Portfolio: Molecular Analysis portfolio expanded to include
proprietary blood-based tumor profiling services, with beta launch
of 26-analyte profiling test.
- In-Vitro Diagnostic (IVD) Filing
with FDA for circulating free DNA (cfDNA) Liquid Biopsy
Platform: In Q1 2018, the company submitted a medical device
application with the FDA for its proprietary cfDNA liquid biopsy
platform.
- Commenced Beta Launch of GPS
Ordering and Results Portal enabling ordering physicians to
electronically receive GPS results and request molecular tumor
board and Medical Affairs consultations.
- Test Growth: The company
reported 677 GPS Cancer® commercial tests were ordered in Q1 2018,
up from 606 in Q4 2017.
- Key Publication: In Q2 2018,
results of a company sponsored study were published in Oncotarget,
a peer-reviewed bio-medical journal. The study results demonstrate
the significant gains in accuracy by performing tumor/normal DNA
and RNA sequencing and the risks associated with high error rates
of tumor only sequencing. https://nanthealth.com/Oncotarget
Publication
- New National GPS Cancer Payer:
In Q1 2018, as previously announced, the company signed a new GPS
Cancer reimbursement contract with a large, national healthcare IT
company.
- New Lab Services Arrangement: In
Q1 2018, as previously announced, the company signed a laboratory
services agreement with a 20+ facility hospital system for the
availability of GPS Cancer testing to its patient community.
- Expanded International Adoption:
In Q1 2018, as previously announced, the company signed a strategic
reseller agreement with a partner in the United Kingdom for the
provision of molecular analysis services for clinical studies and
other research initiatives.
- FDA Submission: In Q1 2018, as
previously announced, the company submitted a 510(k) premarket
notification application to the FDA for tumor/normal DNA
sequencing.
“We are excited about the opportunity to feature GPS Cancer and
our new liquid biopsy platform in 11 presentations at next month’s
American Society of Clinical Oncology (ASCO) Annual Meeting, a
significant and auspicious milestone for NantHealth,” said Sandeep
(Bobby) Reddy, M.D., Chief Medical Officer of NantHealth. “In
conjunction with these presentations, we plan to unveil to the
oncology community at ASCO and commence the commercial launch of
our liquid biopsy test, a 26 analyte test for circulating-free DNA
(cfDNA) and RNA (cfRNA) extracted from patient blood permits
non-invasive detection of expressed biomarkers and monitoring of
response to immunotherapies such as Keytruda® or Opdivo® or
resistance to anti-androgens such as Xtandi®.”
Software and Services Highlights:
- Payer Engagement (NaviNet):
- In Q1 2018, NantHealth’s industry
leading Document Exchange solution was upgraded to include an
enhanced document viewer and the ability for payers to tag and
categorize documents.
- In Q1 2018, as previously announced,
the company signed a three-year renewal contract with a total
contract value of approximately $17 million.
- Clinical Decision Support
(Eviti):
- In Q1 2018, introduced new dual
eligibility features, enabling payers to concurrently manage dual
membership patients covered under Medicare and Medicaid, and drug
shortage configuration features that provide improved management of
high cost drugs.
- Connected Care:
- In Q1 2018, released DeviceConX5.14
(MDE), the first MDI solution to adopt the Fast Healthcare
Interoperability Resources (FHIR) standard.
- In Q1 2018, released VitalsConX2.1,
with support for offline mode, enabling clinicians to continue
nurse rounding when connectivity is lost and to submit data to the
EMR once connectivity is restored.
- In Q2 2018, completed first CE Mark
submission for the DeviceConX software platform.
“Our 2018 first quarter performance reflects a 17% increase in
consolidated revenue and a substantially improved gross margin over
the prior year period,” said Paul Holt, Chief Financial Officer of
NantHealth. “We were delighted to see continued growth of our SaaS
business, with revenue increasing 9% over the same quarter last
year. Our year over year improvement in operating results was
positively impacted by our revenue growth and the restructuring
program, implemented late last year.”
Business and Financial Highlights
In August 2017, NantHealth sold its provider/patient engagement
assets to Allscripts to focus on core competencies and accelerate
the plan to achieve profitability. As a result, the company has
classified the current and prior period operating results of its
provider/patient engagement business as discontinued operations.
All results presented below represent the company’s continuing
operations.
The company adopted a new revenue recognition standard on
January 1, 2018. Please note that the financial results presented
below include both amounts “as presented,” which reflect
implementation of the new revenue recognition standard, as well as
amounts prior to the impact of the new revenue recognition standard
to allow for comparability against historical results. Starting in
fiscal year 2019, the company will no longer present its GAAP and
Non-GAAP financial results under the previous revenue recognition
standard. For additional information and reconciliations of our
financial results between the new and previous revenue recognition
standard, see the additional tables included in this press release
and in the company’s Form 10-Q to be filed with the Securities and
Exchange Commission.
For the 2018 first quarter, total net revenue as presented was
$22.3 million. Total 2018 first quarter net revenue prior to the
impact of the new revenue recognition standard increased 14% to
$21.7 million from $19.1 million in 2017 first quarter. Gross
profit as presented was $11.2 million, or 50% of total net revenue.
Gross profit prior to the impact of the new revenue recognition
standard was $10.7 million, or 49% of total net revenue, compared
with $7.6 million, or 40% of total net revenue, for the prior-year
first quarter. Selling, general and administrative (SG&A)
expenses as presented were $20.7 million. SG&A prior to the
impact of the new revenue recognition standard was $21.2 million
compared with $17.4 million. Research and development (R&D)
expenses as presented was $5.2 million decreased from $8.9 million;
the new revenue recognition standard did not impact R&D
expenses.
Net loss from continuing operations, net of tax, as presented
was $22.0 million, or $0.20 per share. Net loss from continuing
operations, net of tax, prior to the impact of the new revenue
recognition standard narrowed to $22.8 million, or $0.21 per share,
from $28.1 million, or $0.23 per share for the 2017 first quarter.
Loss from discontinued operations, net of tax, as presented was
$193,000, or breakeven on per share basis, compared with $13.0
million, or $0.11 per share; the new revenue recognition standard
did not impact loss from discontinued operations. Net loss as
presented was $22.2 million, or $0.20 per share. Net loss prior to
the impact of the new revenue recognition standard was $23.0
million, or $0.21 per share, compared with $41.1 million, or $0.34
per share, for 2017 first quarter.
Financial results for the 2018 first quarter included
approximately $3.3 million loss from related party equity method
investment including impairment loss, $2.7 million of stock-based
compensation expense, $2.2 million of intangible amortization, and
$1.2 million of non-cash interest expense related to convertible
notes, totaling $0.09 per share. On a non-GAAP basis, adjusted net
loss from continuing operations as presented was $13.5 million, or
$0.12 per share, for the 2018 first quarter. On a non-GAAP basis,
adjusted net loss from continuing operations prior to the impact of
the new revenue recognition standard was $14.3 million, or $0.13
per share, compared with $18.8 million, or $0.15 per share, for the
2017 first quarter.
Conference Call Information and Forward-Looking
Statements
Later today, the company will host a conference call at 1:30
p.m. PT (4:30 p.m. ET) to review its results of operations for the
first quarter ended March 31, 2018. The conference call will be
available to interested parties by dialing 844-309-3709 from the
U.S. or Canada, or 281-962-4864 from international locations,
passcode 8963439. The call will be broadcast via the Internet at
www.nanthealth.com. Listeners are encouraged to visit the website
at least 10 minutes prior to the start of the scheduled
presentation to register, download and install any necessary audio
software. A playback of the call will be archived and accessible on
the same website for at least three months.
Discussion during the conference call may include
forward-looking statements regarding topics such as the company’s
financial status and performance, regulatory and operational
developments, and other comments the company may make about its
future plans or prospects in response to questions from
participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial
measures, including adjusted net loss and adjusted net loss per
share, which are financial measures that are not prepared in
conformity with United States generally accepted accounting
principles (U.S. GAAP). The Company’s management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor’s overall understanding of the
financial results for the Company’s core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company’s core business between current, past and future
periods. Other companies may define these measures in different
ways. Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S. GAAP.
Non-GAAP per share numbers are calculated based on one class of
common stock and do not incorporate the effects, if any, of using
the two-class method.
About NantHealth, Inc.
NantHealth, Inc., a member of the NantWorks ecosystem of
companies, is a next-generation, evidence-based, personalized
healthcare company enabling improved patient outcomes and more
effective treatment decisions for critical illnesses. NantHealth's
unique systems-based approach to personalized healthcare applies
novel diagnostics tailored to the specific molecular profiles of
patient tissue and integrates this molecular data in a clinical
setting with large-scale, real-time biometric signal and phenotypic
data to track patient outcomes and deliver precision medicine. For
nearly a decade, NantHealth has developed an adaptive learning
system that integrates our unique molecular profiling solution,
software and hardware. Our system infrastructure collects, indexes,
analyzes and interprets billions of molecular, clinical,
operational and financial data points derived from novel and
traditional sources to continuously improve decision-making and
optimize our clinical pathways and decision algorithms over time.
For more information please visit www.nanthealth.com.
About GPS Cancer®
GPS Cancer® is a unique, comprehensive test available through
NantHealth. GPS Cancer integrates tumor/normal DNA and RNA
sequencing, with enhanced expression analysis and bioinformatics of
complex biologic pathway systems, providing oncologists with a
comprehensive molecular profile of a patient’s cancer to inform
personalized treatment strategies. GPS Cancer testing is conducted
in CLIA-certified and CAP-accredited laboratories. For more
information, visit www.gpscancer.com.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Forward-looking statements can be identified by the
words “expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. Risks and uncertainties include, but are not limited to: our
ability to successfully integrate a complex learning system to
address a wide range of healthcare issues; our ability to
successfully amass the requisite data to achieve maximum network
effects; appropriately allocating financial and human resources
across a broad array of product and service offerings; raising
additional capital as necessary to fund our operations; achieving
significant commercial market acceptance for our sequencing and
molecular analysis solutions; establish relationships with, key
thought leaders or payers’ key decision makers in order to
establish GPS Cancer as a standard of care for patients with
cancer; our ability to grow the market for our Systems
Infrastructure, and applications; successfully enhancing our
Systems Infrastructure and applications to achieve market
acceptance and keep pace with technological developments; customer
concentration; competition; security breaches; bandwidth
limitations; our ability to continue our relationship with
NantOmics; our ability to obtain regulatory approvals; dependence
upon senior management; the need to comply with and meet applicable
laws and regulations; unexpected adverse events; clinical adoption
and market acceptance of GPS Cancer; and anticipated cost savings.
We undertake no obligation to update any forward-looking statement
in light of new information or future events, except as otherwise
required by law. Forward-looking statements involve inherent risks
and uncertainties, most of which are difficult to predict and are
generally beyond our control. Actual results or outcomes may differ
materially from those implied by the forward-looking statements as
a result of the impact of a number of factors, many of which are
discussed in more detail in our reports filed with the Securities
and Exchange Commission.
NantHealth, Inc. Condensed Consolidated Balance
Sheets (Dollars in thousands, except per share amounts)
March 31, December 31, 2018
2017 (Unaudited) Assets Current assets Cash
and cash equivalents $ 46,390 $ 61,660 Accounts receivable, net
14,701 11,491 Inventories 805 839 Deferred implementation costs 11
1,960 Related party receivables, net 643 585 Prepaid expenses and
other current assets 6,995 5,358 Total
current assets 69,545 81,893 Property, plant, and equipment, net
23,570 18,517 Deferred implementation costs, net of current 2 3,951
Goodwill 115,930 114,625 Intangible assets, net 71,626 69,424
Investment in related party 145,169 156,863 Related party
receivable, net of current 1,706 1,727 Other assets 3,777
2,195 Total assets $ 431,325 $ 449,195
Liabilities and Stockholders' Equity Current
liabilities Accounts payable $ 5,149 $ 3,164 Accrued and other
current liabilities 12,413 18,134 Deferred revenue 13,080 10,057
Related party payables, net 5,973 4,504
Total current liabilities 36,615 35,859 Deferred revenue, net of
current 8,729 7,126 Related party liabilities 13,029 11,500 Related
party promissory note 112,666 112,666 Related party convertible
note, net 8,049 7,947 Convertible notes, net 75,937 74,845 Other
liabilities 5,262 5,950 Total
liabilities 260,287 255,893
Stockholders' equity Common stock, $0.0001 par value per share,
750,000,000 shares authorized; 108,591,946 and 108,383,602 shares
issued and outstanding at March 31, 2018 and December 31, 2017,
respectively (including 3,490 shares of restricted stock) 10 10
Additional paid-in capital 885,200 886,669 Accumulated deficit
(714,138 ) (693,233 ) Accumulated other comprehensive loss
(34 ) (144 ) Total stockholders' equity 171,038
193,302 Total liabilities and stockholders'
equity $ 431,325 $ 449,195
NantHealth, Inc. Condensed Consolidated Statements of
Operations (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended March
31, 2018 2017 Total net revenue $
22,263 $ 19,104 Total cost of revenue 11,068
11,518
Gross profit 11,195
7,586
Operating Expenses: Selling,
general and administrative 20,737 17,435 Research and development
5,151 8,926 Amortization of acquisition-related assets 1,054
1,054 Total operating expenses 26,942
27,415 Loss from operations (15,747 )
(19,829 ) Interest expense, net (4,197 ) (3,969 ) Other income, net
180 235 Loss from related party equity method investment
(3,261 ) (4,526 ) Loss from continuing operations before
income taxes (23,025 ) (28,089 ) (Benefit from) provision for
income taxes (1,050 ) 37 Net loss from
continuing operations (21,975 ) (28,126 ) Loss from discontinued
operations, net of tax (193 ) (12,989 ) Net loss $
(22,168 ) $ (41,115 )
Net income (loss) per share:
Continuing operations Basic and diluted - common stock $ (0.20 ) $
(0.23 ) Discontinued operations Basic and diluted - common
stock $ — $ (0.11 ) Total net income (loss) per share
Basic and diluted - common stock $ (0.20 ) $ (0.34 )
Weighted average shares outstanding: Basic and diluted -
common stock 108,579,271 121,618,039
NantHealth, Inc. Condensed Consolidated
Statements of Operations Reconciliation of results under ASC
606 and ASC 605 (Dollars in thousands, except per share
amounts) (Unaudited)
Three Months Ended March 31,
Adjustments due to Without new As
Reported ASC 606(1) Revenue Standard 2018
2018 Total net revenue 22,263 (533 ) 21,730
Total cost of revenue 11,068 (37 )
11,031
Gross profit 11,195
(496 ) 10,699
Operating
Expenses: Selling, general and administrative 20,737 470 21,207
Research and development 5,151 — 5,151 Amortization of
acquisition-related assets 1,054 —
1,054 Total operating expenses 26,942
470 27,412 Loss from operations
(15,747 ) (966 ) (16,713 ) Interest expense, net (4,197 ) — (4,197
) Other income, net 180 — 180 Loss from related party equity method
investment (3,261 ) — (3,261 ) Loss
from continuing operations before income taxes (23,025 ) (966 )
(23,991 ) (Benefit from) provision for income taxes (1,050 )
(119 ) (1,169 ) Net loss from continuing operations
(21,975 ) (847 ) (22,822 ) Loss from discontinued operations, net
of tax (193 ) — (193 ) Net loss $
(22,168 ) $ (847 ) $ (23,015 )
Net income (loss) per
share: Basic and diluted - common stock $ (0.20 ) $ (0.01 ) $
(0.21 )
Weighted average shares outstanding: Basic
and diluted - common stock 108,579,271 —
108,579,271 1 Financial Accounting
Standards Board, ASC 606, Revenue from Contracts with Customers
NantHealth, Inc. Supplemental Revenue
Schedule (Dollars in thousands) (Unaudited)
Three Months Ended March 31, 2018
2017 Revenue: Software-as-a-service related $
16,166
$
14,797
Software and hardware related
1,455
598
Maintenance 2,446 2,019 Total software-related
revenue 20,067 17,414 Sequencing and molecular analysis 840 510
Home health care services 1,356 1,180 Total net
revenue $ 22,263 $ 19,104
Cost of Revenue:
Software-as-a-service related
$
6,602
$
6,233
Software and hardware related
885
1,004 Maintenance 215 161 Amortization of developed technologies
1,173
1,743
Total software-related cost of revenue 8,875 9,141 Sequencing and
molecular analysis 1,431 1,593 Home health care services 762
784 Total cost of revenue $ 11,068 $ 11,518
NantHealth, Inc. Non-GAAP Net Loss and Non-GAAP Net Loss
Per Share (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended March
31, 2018 2017 Net loss from
continuing operations $ (21,975 ) $ (28,126 ) Adjustments to GAAP
net loss: Loss from related party equity method investment
including impairment loss 3,261 4,526 Stock-based compensation
expense from continuing operations 2,718 250 Corporate
restructuring from continuing operations — 220 Acquisition related
compensation expense — — Acquisition related sales incentive 145
662 Change in fair value of derivatives liability (1 ) (215 )
Non-cash interest expense related to convertible notes 1,194 1,051
Intangible amortization from continuing operations 2,227 2,797
Securities litigation costs 73 — Tax benefit resulting from certain
non-operating activity (1,123 ) — Total
adjustments to GAAP net loss from continuing operations
8,494 9,291 Net loss - Non-GAAP from
continuing operations $ (13,481 ) $ (18,835 ) Weighted
average shares outstanding 108,579,271
121,618,039
Net loss per share from continuing
operations - Non-GAAP $ (0.12 ) $
(0.15 ) Reconciliation of Net Loss
per Common Share to Net Loss per Common Share - Non-GAAP
(Unaudited): Three Months Ended March
31, 2018 2017
Net loss per common share from continuing
operations
$ (0.20 ) $ (0.23 ) Adjustments to GAAP net loss per common share
from continuing operations: Loss from related party equity method
investment including impairment loss 0.03 0.04 Stock-based
compensation expense from continuing operations 0.03 — Corporate
restructuring from continuing operations — — Acquisition related
compensation expense — — Acquisition related sales incentive — 0.01
Change in fair value of derivatives liability — — Non-cash interest
expense related to convertible notes 0.01 0.01 Intangible
amortization from continuing operations 0.02 0.02 Securities
litigation costs — — Tax benefit resulting from certain
non-operating activity (0.01 ) — Total
adjustments to GAAP net loss per common share from continuing
operations 0.08 0.08
Net loss per
common share from continuing operations - Non-GAAP $
(0.12 ) $ (0.15 )
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version on businesswire.com: https://www.businesswire.com/news/home/20180509006370/en/
NantHealth, Inc.Investor Contact:Robert
Jaffe424.288.4098rjaffe@rjaffeco.com
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