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Invitae Posts Mixed Q1 Results, Reducing Cash Burn in the Wake of the COVID-19 Pandemic

By Keith Speights – May 6, 2020 at 7:00AM

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The medical genetics company achieved record-high testing volume growth in Q1. But the COVID-19 outbreak began taking a toll late in the quarter.

Invitae (NVTA 1.87%) shares have been all over the map so far in 2020. By mid-February, the genetic testing stock was up nearly 70%. A little over a month later, Invitae stock had dropped more than 70%. But its shares have rebounded quite a bit in recent weeks, with Invitae now up by a single-digit percentage year to date. 

The company announced its first-quarter results after the market closed on Tuesday. Those results don't seem likely to cause yet another huge price swing. Here are the highlights from Invitae's Q1 update.


Image source: Getty Images.

By the numbers

Invitae announced first-quarter revenue of $64.2 million, a 58% year-over-year jump. This result easily beat the average analysts' Q1 revenue estimate of $59.41 million.

The company reported a preliminary net loss in the first quarter of $102.2 million, or $1.03 per share, based on generally accepted accounting principles (GAAP). This reflected significant deterioration from Invitae's net loss of $37.7 million, or $0.47 per share, in the first quarter of 2019.

Invitae posted an adjusted net loss in Q1 of $79.8 million, or $0.80 per share, compared to an adjusted net loss of $36.4 million, or $0.46 per share, in the prior-year period. The result narrowly missed the consensus analysts' adjusted earnings estimate of $0.79 per share.

Behind the numbers

The primary key to Invitae's strong revenue growth in the first quarter was a 64% jump in samples accessioned. Invitae reported 154,000 samples accessioned in Q1, more in one quarter than it did in the entire year of 2017.

However, Invitae's bottom line didn't track along with its top line. The company's average cost per sample rose 16% in Q1 to $262 on a GAAP basis. Invitae's operating expenses also soared to $121.6 million from $94.8 million in the prior-year period. These numbers are only preliminary for now, though. Invitae is finalizing acquisition-related adjustments that will be included in its quarterly filing to the Securities and Exchange Commission on or before May 11, 2020. 

CEO Sean George said that Invitae began the year on a strong note. However, the company started to feel the negative effects of stay-at-home orders, lockdowns, and delays of elective procedures resulting from the COVID-19 pandemic in the second half of March.

Looking ahead

The impact of the COVID-19 outbreak on Invitae's testing volume is likely to continue for a while. The company said that these effects will vary across geographic regions, clinical areas, and clinician types.

Like many companies in the healthcare sector, Invitae withdrew its previous full-year 2020 guidance. It also has taken steps to reduce cash burn in response to the ongoing pandemic. Despite the challenges, George stated that the company is "well equipped to drive growth across an increasing number of customer segments as we drive genetics into mainstream medicine."

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Invitae. The Motley Fool has a disclosure policy.

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