Interpace Diagnostics Group Inc (IDXG) Announces Q1:17 Results; Shares Soar


Interpace Diagnostics Group Inc (NASDAQ:IDXG) announced financial results and business progress for the quarter ended March 31, 2017, as well as recent accomplishments.

“Continued commercial progress while managing costs to acceptable levels resulted in good financial performance for the quarter,” said Jack Stover, Interpace’s President & CEO.  Our restructuring and recapitalization plans were transformational and included raising over $14 million in new capital since late December, completely eliminating over $9.3 million of secured debt, reducing total liabilities by over $12 million since year end and adding in excess of $24 million to stockholders’ equity at March 31, 2017 while terminating significant future potential royalties and milestones related to assets acquired in 2014,” noted Stover. “Additionally, gaining reimbursement for our ThyraMIR assay with UnitedHealthcare, the largest healthcare insurer in the US, was critically important,” added Mr. Stover.

Q1 2017 Financial Performance

  • Revenue for the three month period ended March 31, 2017 was $3.5 million, an increase of 14% over the same prior year period and 11% over the last quarter of 2016.
  • Income from Continuing Operations grew to $1.9 million in 2017 up from $ (4.0) million in the prior year’s quarter due principally to a $5.8 million reduction in fair value of contingent consideration as a result of the reduction of potential royalties and milestones related to assets acquired in 2014.
  • Total Assets grew by $5.2 million while at the same time total liabilities were reduced by over $12 million compared to year end.
  • Cash balances improved to over $7 million at quarter’s end.
  • Net cash used in operations for the quarter amounted to $4.1 million in Q1-2017 as compared to $4.0 million in 2016. Included in cash used in the first quarter of 2017 was approximately $2.5 million of expenditures related to discontinued operations, transaction fees and payment obligations carried over from the contract sales organization (CSO) business we sold in 2015.
  • Total stockholders’ equity grew by over $18 million since year end 2016.
  • Adjusted EBITDA (in the attached schedule), which we believe is a meaningful supplemental disclosure that may be indicative of how management and our Board of Directors evaluate Company performance, adjusts Income or Loss from Continuing Operations for non-cash charges such as depreciation & amortization, asset impairment, loss on extinguishment, goodwill impairment and the change in fair value of contingent consideration. Accordingly, our Adjusted EBITDA for the three-month periods ended March 31, 2017 and 2016 was $(1.1) million and $(2.6) million,respectively, demonstrating continued operating improvement.

First Quarter 2017 and Recent Business Highlights

  • Announced that UnitedHealthcare, the largest health plan in the United States, has agreed to cover Interpace’s ThyraMIR test for all of United’s members nationwide.  Interpace’s ThyGenX and ThyraMIR thyroid assays are now covered for approximately 250 million patients nationwide.
  • Entered into an agreement with a major Healthcare system in Philadelphia for our two molecular tests for indeterminate thyroid nodules, ThyGenX and ThyraMIR.
  • The European Patent Office granted a Patent for use of microRNAs for distinguishing benign from malignant thyroid neoplasms. This patent covers the underlying technology of the Company’s ThyraMIR® microRNA Classifier.
  • Entered into an exclusive distribution agreement in Israel with Best Med Opinion Ltd (Best Med) of Tel Aviv, Israel, a provider of second opinion and clinical services for physicians and patients in Israel and several other countries.
  • Announced entrée into expanding our commercial footprint internationally as a result of the adoption of the ThyGenX test by Dr. Richard Payne of Montreal, Quebec. This is the Company’s initial step in launching its Thyroid products in Canada.
  • Participated in a major awareness campaign on Endocrine Health published in a “special insert” in in the March 17-19th edition of USA Today.
  • Six abstracts were accepted and presented as posters at the Digestive Disease Week (DDW) meeting being held May 6th-9th, 2017 in Chicago, Illinois. Three of the accepted abstracts address the clinical utility of PancraGEN™ in assessing long-term risk of malignancy in pancreatic cystic lesions in various real-world clinical scenarios and include data from 370 patients who underwent multiple PancraGEN tests over the course of 3 years. Three additional posters describe the expanded use of PancraGEN as an ancillary test for solid lesions of the pancreas and bile duct using the Company’s unique method for testing free-DNA obtained from bile duct brushings and fine needle aspirates. Notably, the abstracts describe results from a registry study of over 200 patients and a prospective study of 100 patients who received such testing for solid pancreaticobiliary lesions.

Shares of Interpace are up 23% to $2.94 in pre-marekt trading Monday. IDXG has a 1-year high of $19.80 and a 1-year low of $0.70. The stock’s 50-day moving average is $2.40 and its 200-day moving average is $2.33.

Interpace Diagnostics Group, Inc. provides commercialization services to biopharmaceutical companies. It focuses on developing and commercializing molecular diagnostic tests, leveraging the latest technology and personalized medicine for patient diagnosis and management. The company offers commercialized molecular tests which include PancraGen, ThyGenX, and ThyraMIR. PancraGen for the diagnosis and prognosis of pancreatic cancer from pancreatic cysts; ThyGenX, for the diagnosis of thyroid cancer from thyroid nodules utilizing a next generation sequencing assay and ThyraMIR, for the diagnosis of thyroid cancer from thyroid nodules utilizing a proprietary gene expression assay.