Interpace Biosciences (IDXG) 14 May 192019 Q1 Earnings call transcript

Greetings, and welcome to the Interpace Diagnostics Group First Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. [Operator Instructions] In addition, to supplement the Generally Accepted Accounting Principle or GAAP numbers, we have provided non-GAAP information. non-GAAP in meaningful assessing this may information that helpful be the believe information supplemental provides and We company’s performance. the company’s is reconciling included table GAAP non-GAAP to A information in the on earnings available which release, its website. information is over turn Jack like of CEO conference now Interpace to I'd to Diagnostics, Stover. sir. go ahead Please

the first all With Thank Interpace's business and financial you us today quarter March afternoon XXXX. for call the XX, ended you, on Early, Hector, Financial and for Jim this me results highlights joining Officer. thank our a of is for review Chief

summary For as today's call, of key our I'll our some detail. as in a provide milestones. update a business performance will review brief financial general upcoming Jim results, well more

for questions. Following we that, call will open the up

would company personalized technology that and diagnostic molecular diagnostic decisions We and start remind is pathology leveraging improved call, currently to patient services Interpace management. mission. first-line latest better I everyone four provides bioinformatics fully in Interpace's every integrated and by tests medicine clinical test a have for I like informed and commercialized. related commercial of As the

and that endocrine typically for on classifier includes or next-generation nodules our test ruling ThyGeNEXT cancer nodule identification microRNA thyroid Our for in risk is thyroid ThyraMIR of work out ruling ThyGeNEXT, for cancer the ThyraMIR cancer. indeterminate assessment expression thyroid. sequencing first endo-franchise focus gene on focused together.

first commercially as and or well now of US masses molecular and the Gastrointestinal bioinformatics includes strictures. sophisticated only solid PancraGEN, biliary test evaluation cysts Our pancreatic G.I. franchise and available for as

primary cancer. which helps product in or launched smaller physicians newly have RespriDX, metastatic a market also recently We differentiate between lung formed the

not and high-end business, to physicians is metastatic are an will at it tool focused risk who important patients. cancer or both specialty that we on think both important note patients classifying for I progress diagnostic will especially to a

and expanding us. make products acceptance which continue a Now for the during this we reimbursement quarter, coverage, progress quarter; review excellent and to improving the use to remains of priority highlights for high our

product products. over pleased Most importantly, received million We are for clinical the year. range $XX quarter. date, to net net revenue we provide growth advanced $X XXXX and last XX% performance revenue validation annual our the further $XX our also to pipeline Based we over of in million on or guidance million recognized in approximately for our to

and commercial about we a strong our highlighted the growth plan the PancraGEN for especially Marketing are franchises. quarter our the to XX% support our XX% to year importantly assays key was assay, and first opportunities. added are our For to we and unit eight in our team on by continue a we of Head our our net and XXXX by of Today and very overall both new already G.I. endo by quarter recently added representatives invest businesses. or our To balance. G.I. revenues Commercially, growth our or end, that for both thyroid new growth in nice endo of generated

for of retained FFPE in choices of test. Accreditation also validation New known samples, thyroid specimen our and Pennsylvania both American slide support To psychology our samples, lab finalized or Pathology customer samples responsiveness our of third as and industry, the first Connecticut or clinical the needs. During the including received flexibility to assay formalin-fixed for set College biopsy our now offers quarter, CAP now paraffin-embedded increasing samples expensive most we we RNA type the Interpace labs. our FFPE and Haven processing, thyroid Pittsburgh,

fixation and value is in properties the advanced independent global in the payer FFPE with of which future our and provides potential for Midwest, health the slides are with further Barrett's differentiating for samples plans in ThyraMIR patients supporting approved stages regulatory associated cytology groups Interpace and New indeterminate combination retained thyroid one FFPE utility largest molecular the us the patients extending the services Importantly, with used products, first our important thyroid Cytopathology reimbursement nodule to Medica, fine identifying first our on with indeterminate the approval tissue provides State samples. rule-in of in business very of Cross, life we to our deeply the course product to Open We use reimbursement. Accordingly, it's RNA helps who credibility of BMJ believe we all of our to provide into opportunities. in of properties now deal to lead announced likely pipeline care ThyraMIR test on great X.X market Shield the next and the Interpace's New both published BarreGEN, ThyGeNEXT new which our marketplace ThyraMIR management confirming thyroid well sequencing of be expansion needle microRNA a is only to an obtain from of only System of key thyroid as Medical State that products the a of to represent XX difficult XXXX. complementary now network is clinical on the thyroid in and received us is ThyraMIR York announced ThyGeNEXT of the coverage LabCorp, of presented that to data a York. and includes progress and classifier disease Blue aspirant for we both test BarreGEN brought thyroid as of the a rule-out via and of several in quarter, products important covered products million during on integrated the the or guiding and sciences customer, Maryland single plans on University lives with to access studies also Blue we patient and Gastroenterology generation and evidence ThyGeNEXT entered expanding in Currently both Maryland and which data published company we Diagnostic cancer. clinical Esophagus provide largest thyroid to more our agreement of entire The products cytology. nodules ThyraMIR continue by transition more also testing leading

Dr. on Barrett Narick BarreGEN, activities in of the is space. our leading leadership our of now team Tina all Focusing

partnership Nick of Dr. the Along with Shaheen new of developing Shaheen's engaged lead participate for in prominent The has groundbreaking Barrett's progress are North group. recent and epidemiologist we Shaheen also University major Dr. on Barrett's to and give is are Barrett's. confidence and Barrett Dr. well KOLs as that asset we commercially research track A was studies also gastroenterologist Narick with in research Shaheen, our of opinion We with BarreGEN. secured theme as Dr. agreements Dr. esophagus. on that making, me that patients our been is XX and for treatment endoscopic of key important his data leader. Carolina discussions Barrett's methods potential is have developing testing known gastroenterologist to a Interpace's clinical a

do plans are significant clinical revenue continuing not financial seeking or program. we for reimbursement include Our while BarreGEN, experience from XXXX and our approval CEP

forward we very stands GI productive approval, All first and to throughout However, look ready continued all, in expanded launch. our year. a and progress the had to team strong upon quarter receiving

be guarantee event, any for cannot several important us. do have inflection accomplishment that points the believe that future value we important we of While could we milestones

provide additional sophisticated expansion that G.I. prepared bring and reps and commercial our synergistic are Endo us are BarreGEN products. products we to additional the franchises ready. our \ to existing Our opportunity of are We launch on to in infrastructure when expecting

work we gather as process learning constant improve a meet to and opportunities obvious more offerings is and business product Our and expectations. see customer data our

established customer us and future in and in reimbursement awareness helped business elevate Barrett's, discussions. like ourselves higher working the in has for expanding Endo, group G.I. position credibility with market further The additional now base with further sophisticated LabCorp we we With whom provided of to our should advising Our partnering. active partner marketplace. model top and to recognition with three support in have now KOL should ourselves a improved the has a validate payers level we are

arrangement three years exclusive for this extended more have to recently. pleased We’re

that, development of for are important and focus us we opportunities pipeline to discuss as BarreGEN CFO beyond on experience to data leverage Canadian a successful well our product base our our our hand highlights activities Molecular, is our more expanding both potential into to With like the growth Early, near-term believe detail international sector I’d priority. the in financial our to quarter. Jim biopharma off Jim? the lastly call Our key as the for

some I’d like Today, everyone. focus performance on elements financial afternoon to good and of and position. our key Jack you, Thank

franchises. endo revenue in was for mentioned, quarter net the million, of both our XXXX. for $X.XX XX% QX growth As was up of growth XXXX unit first GI The our principal and reason from net previously

the due the $X.X as related G&A or revenues, Our required from of indicating from costs other anticipated to first our last in current collaborations. that well for XX% quarter. due from first an of in expense million to costs quarter period investments offering the in the from management. are processed gross QX quarter continuing Important percentage appropriately and we increase first Sales of as commercial and our the for percentage the increasing XX This profit as Research our is leveraging related well of million, percentage especially throughout recent year-ago note to improved most as to quarter General an the for million higher increase year quarter was leverage the sales prior activities million the first for over investment. administrative first XXXX costs primarily growth XX% $X.X as quarter XX% in quarter year. net up the up marketing marketing and due costs first public the were in $X.X XX% cost continued costs QX in our XXXX was year our commercial the revenue year’s points quarter of XXXX. to of a of of were support potential professional units $X.X of were improvement for to and to development volume X% XX% quarter principally

noted As a result for XXXX XXXX million above, million $X.X continuing from of of loss and operations $X.X full-year respectively. of and the QX was QX information

adjusted liability March evaluating compensation, negative amortization adjusted release for months operations the continuing often $X.XX as and excluding XX, and define depreciation EBITDA refer As for other earnings relating XXXX stock-based million three well the warrant as our asset mark-to-market debt contingent revaluing value loss to our costs non-cash EBITDA and and was impairment million respectively. ended adjusted taxes, negative XXXX or as fair purposes we EBITDA income adjustments consideration, cash of of Accordingly, when and our before expenses to amortization measure usage. and financial charges. noted extinguishment discussed $X.XX interest, interest, taxes, or in above, non-GAAP a our We from loss depreciation earnings and to our we

$X.X XXXX. Our quarter cash in monthly first burn million operating average the of

Our due first quarter deposits spend year year first to the billing and was payments new primarily higher to service this in transition and provider collections a for normal XXXX. than the and quarter

effective that QX groups $XX of as our growing XX, the our from accounts XX, Prior to to Therefore due we on Our on revenue as accrual compared adoption been to an March required $X.X XX accrual increased the revenues for date, and have impact payer ASC to basis X, the only March million were recognized million to January being of basis. three of the receivable begin XXXX. XXX using of was to XXXX. XXXX principally months XXXX months as at we of a due basis full of when all end from of partially certain recognizing cash revenue

finalizing and previously transition. still XXXX X, effective mentioned, the our collection the As provider and of we we’re process in billing service January changed

impact QX QX. net early process receivable we million of collected did While in in accounts be that our not was in transition that will the believe the of hung-up excess do revenues, $X.X transition or

a we credit and and capital later Total from with growth not this term projection that total an any $XX.X borrowed have $XXX,XXX $X.X diluted. the XXXX $XX.X $XXX,XXX long-term burn our line Cash will March Valley of of outstanding. we including totaled no were assets monthly liabilities $X.X today, for million of average proceeds and not credit facility revolving credit entered last XXXX. year, million of XXXX. of $XXX,XXX At included to quarter-end per is our for this in three-year debt spending equivalents working resulting of line for $XX.X January cash XXXX March and million year. cash a in were offering plans stockholders reminder million approximately of we as line million in month XX, under million with and To-date, approximately funds as equity declining Also in to Our for estimated facility purposes Bank Silicon have public is $X a as up clarity as line XX, component. a net into an

Our Account me and Managers, XX at headcount is and as turn compared of sales to commercial lab Jack added XX the the as several With personnel Hector? quarter the marketing our resources as planned let currently to Hector fourth to back that, end the we operator. call team. reps,

this At a will with Thalmann. the Jeffrey from Instructions] first proceed time, [Operator we of conducting your Our Please comes session. question. be Ladenburg question-and-answer Cohen line with question

Jim, Hi are Jack how you? and

Good Jeff.

few Just kind you. a of first for through

XXXX? of what number think of talk by covered about you you and can reimbursement, covered So can of get to end insurances lives, the lives number payers,

Jeff. order That's of a big, big questions

as On there PancraGen, of of as that our our which in Medicare by far except covered our franchise is development. GI Let way products overview all me as Medicare covers the in basically you of with the goes. BarreGEN and by reimbursement kind virtually that give majority is

In issue, typically is cancer right. a cancer disease. younger terms and disease, typically related age an patients of older is thyroid Pancreatic an patients that's

because in of Barrett. patients the to by of and if at effort patients million are A as adding focused covered recent brought XXX thyroid have smaller lives we today deal our and that Medicare. cancer, younger converting of as including you plans thyroid is terms are good thyroid typically the over look those we appropriate coverage, to on a careers cancer percentage of will prospect most our we thyroid In contracts covered younger terms the

added. see as mean about today? from that do adds about And the far Okay, talk you I end were got How year you eight size, could by that team it. the commercial as one you of spoke plus more that

oriented prospects point of you in add coming more process growth of is we hiring in the some plan Yes, see target the individuals the people little this our will is organization. we along not plan any in and Managers a differently. skill a took Managers sales different they're base. you if went with then starting QX, reps, added and to that basically we are after true our place. more our year out and we begin in on so in have with or have gate, those previous We've and Account this year-end the what the supporting we're time, effectively and that group identify This reps at Account administratively They’re that leaked sales

In Head addition to brought a new well. that, we of Marketing as on

well. side And as so XX% at on that's growth. typically to look the XX% about it of growth commercial in in headcount we've And translating terms been targeting around total basis, and revenue on been year-to-year as we a

G&A $XX may. or quarter, line Okay, for to It as Could got the this it. bit. if heavy a One I the you G&A million line closer year? think about more for a this talk million of a should G&A little little we seemed $XX

And in concerned cash question think virtually that the the basis cash number, There's case, than are two the in opposed of cash is $X so component a that's closer the of pieces analyzed our the a on year. boost first cost, that. that that million G&A tend component to there up about the cost I an to that in as what's G&A to $XX as items number. are people Yes, million non-cash part mostly it we've number the is

it super. Thanks the me. That’s questions. for Okay, from again

Jeff. thanks Yes,

line the H.C. next question. Please with Wainwright. question Our your from Yi of with Chen comes proceed

test, and both give driving Could revenue between breakdown taking us you you for XXXX? going during Thank the pancreas the were question. a drivers rough test forward main maybe what thyroid tests of my

XX% assay product Yes, Sure, business, Yi. from And I seeing our in pancreatic on as about business in How XX% that expansion growth factors. of our we’ve not XX% was terms growth added the a growth the into Adding terms well units lesions marketplace our in favor basis. focusing lead expanded are growth significance. or our the where team our thyroid that is a units. PancraGEN to of what the a year and so about been thyroid thyroid commercial was driven you? into as our in adding GI biomarkers issue. about our growth course PancraGEN and PancraGEN our issue team we've basically themselves last or the core biliary fact split solid of lesions what in focused year-to-year novelty between of endo current the is That's really that additional of on dollars say expansions lines has did headcount we endo by product commercial or to of of existing And as our primarily the product in have in of or in been we're

Got it. Thank you.

line Our the Alliance next Ben with question. proceed of Please from Haynor question comes with your Global.

afternoon Thanks the Good for guys. taking questions.

there year How comes on of new do place the in the is do the process it think of the where completely where terms territories. stand you individuals when how also territories, it there? about year, of work the about now? each headcount about internal you then kind think team, those team commercial following-up the you does time when expanding And commercial is splitting to Just

you are how today? and Ben questions good Yes,

Doing great, thank you.

been where the based year-to-year selecting go picking It's the sales or The identifying which with put reps where to added we information about has you XX the in I emphasis, varies nice us time this so haven't our the ones or terms that the and solidly allowing would basis business cautious And based. Account we've and bit we've it's mentioned but now also commercial there’s patients with we strictly team done expansion really we group, reps. would GI people. now today commercial our assist cetera I field, big. sales The in a of reach have field. mean not basically managing analytics upon to of a adding acquire existing in too cetera we're data And is intermediary part in on, of while I and how as about our spend our We in people what us and or that of deal and sales our utilizing force on by and an it of we've to then that lab and we've really endo our is start that what almost sales et that physicians business. I Managers and decisions terms make to the geography effectively great the scientific we've that it about is of more experience. XX XX to of additional our that personnel, been added in call algorithm et are those got are Managers, terms be reps that Ben we identified so into thyroid but first and both at Managers territories an say et I GI in look part the providing And terms that are which number data in called process in teams and as cetera acquire between we come Liaison physicians our we is physicians of able year all XX believe in our the right territories geography Account

five they business the is that of the have And addition accretive we're And relationships. with a is sales of that, can in book become time in of years. a come really in around of they series to or what several short minimum proud period we're needs sector I typically a think rep relatively in to today, experience a months.

model pretty So it's powerful right a now.

to very any been of and but helpful. have have that And publication time thyroid guys gauge recent know that's then then kind gotten you now only paper I short reaction the these also Great, came just out? BarreGEN a from the looking it's papers out

thyroid is to very side, team data of customers first credible especially it and them that to talk thrilled information potential source our commercial information have gives all so on Yes, about. another to the of

On independent it really the I our registry. by the first information credible us done very from BarreGEN evaluation side a that organization provided was basically that mentioned, as

as we're so And to studies well help that additional expecting follow-on expand opportunity.

dovetails terms that final then Okay, is kind we clinical of in what and be should the on lookout great. into my And during publications question of data potential for additional XXXX?

that every I happen have as are say Barrett's we I will the studies, in areas studies in major areas one clinical think but I all pancreatic Yes, can’t today, our areas. year are results of XXXX those promise working important we of that look will and on a out from would key thyroid, three

great is basically is us moving time Of be to experience that data course, studies it XX to the and clinical readily in most And up KOLs that the products course have together, we nice to of also evaluation accessible to prognostic of part partners have we the for years evaluating our especially takes data. don’t those have utility focus determining able sector. today of of provide those are we and basically in about able future some the pull that where the with to expanding

into of to kind future to build assessment utilize able data or our evaluation models. future we’re that So

So a data. obviously us and emphasis that's I big think and we're running is for really clinical up

for thanks color. the Good luck DDW. at Great,

Thank you.

line your next from McCarthy Maxim proceed comes Jason of Our question. question with the with Group. Please

on shall different that progress. was on have three in future the see platforms from? and the Naureen Congrats just come patient we ThyGeNEXT where and specimen be to do demand assess good the you platform, Jason. with for you I ThyraMIR volume demand to or would actually of types three say afternoon. greatest within This and that can samples, regards your Hi, is in context now you With endo the different wondering

been been have yes greatest selling samples of our that group. Naureen, with has historically and a the primary our basically so cyst accessioning focus

that see slide area the also of also Rosetta well. especially acquisition in opportunity tremendously. of of and that's to assets that And lot activity as would a seen that last really helped beginning we've the FFPE say with with I the growth expand with Genomics our year basically However we're

So a biopsy I most able and are that of and pathology the now kinds services reps what comfortable they're with. real approach our group to based seeing think go to offer effectively individually a balanced you're is biopsies sales into them

Great. you've terms And launched is ThyGeNEXT, in in few right that a translated about an now. for physician the been of that’s in to interest it the maintaining seen now space? quarters increase Has more or launch of a edge competitive

it's say from point biomarkers in to I'd reps certainly driving of matter unit see trend our biomarkers which view, gets and growth terms interests I Yes, in what's and revenue that that interest and increased is sales think access of both general the you growth. certainly providing certainly physicians a able get also of they’re

one just from And more me. Right.

territories mentioned your and You beyond will focusing the be on what be U.S. you might Can Canada. international your you next? expanding expand base of outside commercial speak that to to what strategy

a we're that, on utilization physicians have and people we our of our space we that a samples. we up assay system and been or capabilities doing additional lot area in and wide With to In Yes, in opportunities we many physicians to we of Canada. other we're to access evaluate we have and add able in package to of the easy have we've We've a of in having successful market. thyroid get focus, and to interest advantage also areas. samples. is one of in in in believe now medical though, group One to able that that Retain what been our a especially stability have that, ThyraMIR microRNA have RNA get or relatively Canada that the able have spite opens our for there, refrigerate number of in reasons. That samples avoid not we’re

looking regions. been not we’re and need view of and Canada, people but there a point to that outside in a from commercial build Israel we’re currently necessarily through Countries, other we’ve in with sales establish already partnering presence our we So of those bit a to of own Western

me Great, that’s helpful. today. from That’s you. it Thank

you, thank Yes, Naureen.

François with Instructions] the comes Please from next [Operator Our Brisebois. question. line proceed question of your

Hi, Jack Jim. and

one just the growth sales right here. wondering we going about talk sales that make something correlation of growth that I how was it between sales kind could kind expecting see could and rep be difference seems this a Just between growth, should the like anything and is that to trigger couple rep type add we higher forward, growth you the the the you is just now growth? a percentage one versus to that can of higher of

not in are terms dollars sales it’s the revenue, XX% how a costs that not number increasing we’re so It’s in we’re that hi, XX% of of far XX% or and of number issue, simple, sales that XX% you revenue. to we’ve driving into dollar way by not dollar it’s It’s translated like not same today? growth sales adding around looking while reps quite been the to at the by

marketing drop. when talking number seeing to I leverage Jim we’re revenue, continue of We’re said costs percentage we’re getting and about And remember from that. that know greater what was I a as sales

of it but drive our seeing course the adding reps, near in cost far as QX along development do leverage, think I to continuing so be the pretty we're in to of But we’re as here factor kind the territories, sit has with that much across of a of a managing is a sure and more I plan better with is Managers going with those limiting at the a various picking growth in job see growth Account team if is we and we're be of individual future concentrated additional of not the right our this a we're process in want activity, will bit terms end It's the as products to somewhat been hope terms really commercial that, getting well. sales we're sales And force look and you model people for the able we larger well. over the So sites right new and that much doing management that and front experiment in well. territories. of spending of

helpful very you a the lot It's of analyzing the AI like it. ton so thoughts intelligence out can machine it potential process? of players molecular Okay. of guys would all get and the your a Any this data accelerate together, all help data learning and side data it have seems to on of artificial kind terms there to the bioinformatics in

are look we Yes, when we sequencing at Targeted group. Sequencing a approach, our

microRNA next-gen where very when very out I our sequencing maintain the reasonable well. of And to think sequencing have to two in of samples key looking more it able terms also that data in broadening find as to sectors as machine working add we it and seeing even our been the what we in opportunity reduced the would have. RNA you that cost ways in space model, and believe a market of for reasonable call capability, the us thyroid that, even what and sequencing both we're learning have cancer. looking areas we unique which I we're clinical is developed, to actually is pancreatic we to to but long for targeted like pancreatic so bioinformatics And in be puts AI we guess we and evaluate we us to the understand I and is trials position the with in for therapeutics, products cancer, and a add a Retain looking as are of cost Certainly cost

might launched. lastly is much you comment cancer. pancreatic just thyroid had this or mentioned had more be of then been on and that -- there, you the $X Understand sales that million still Any how RespriDX RespriDX

that we're focused and pancreatic on. a It's thyroid assays more

terms I it, lung in differentiates us. into the the to put that were ago, relatively small launched we commercial toe looking cancer disappointed for it a of I RespriDX really how experience and space. a not We're it's while this product dip but it, when behind think haven't resources said learning our we we either. itself potential long been The product with is

you Understand. for Thank Jack. That's me. it

conference. reached question-and-answer we gentlemen, and concludes the This of Ladies have end session. the today's

participation. your We this lines time. your disconnect for may You you at think