Nvta q3 2016 earnings final final fina lv2
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Transcript of Nvta q3 2016 earnings final final fina lv2
© 2016 Invitae Corporation. All Rights Reserved. 1
INVITAE: Bringing genetic information into mainstream medical practice T H I R D Q U A RT E R E A R N I N G S C A L L N O V E M B E R 7 , 2 0 1 6
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 2
Safe harbor statement
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating
to the company’s expectations regarding its ability to obtain reimbursement; the company’s beliefs regarding its positioning in the market; the company’s
expectations regarding being cash flow positive; future financial and performance levels; the indicators of the company’s success and its expected actions with
respect to those indicators; the company’s belief that it has industry-leading market share in the genetic testing industry; the company’s prioritization of driving
revenue; the company’s expectation that it will begin to operationalize contracts with major payers, and that payment rates and volume will increase
throughout 2017 and beyond; the utility of genetic testing and its impact on diagnoses and patient outcomes; the applicability and utility of the research studies
to diagnoses and patient outcomes; the ultimate functionality, features, availability and processes used by the Invitae apps and the Helix marketplace; and the
company’s beliefs with respect to the benefits of the Invitae apps and the Helix marketplace. Forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and
uncertainties include, but are not limited to: risks associated with the company’s ability to develop and commercialize new tests and expand into new markets;
the company’s ability to use rapidly changing genetic data to interpret test results accurately, consistently and quickly; the company’s history of losses; the
company’s need to scale its infrastructure in advance of demand for its tests and its ability to increase demand for its tests; the company’s ability to drive
revenue; the company’s ability to successfully operationalize payer contracts; the company’s ability to achieve and maintain positive cash flows and to execute
its strategy to create a profitable long term business; the risk that the company may not obtain or maintain sufficient levels of reimbursement for its tests; laws
and regulations applicable to the company’s business, including potential regulation by the Food and Drug Administration; that Medicare may change the
pricing or other terms for reimbursement, or not reimburse the company for other tests in the future; the risk that the company’s apps on the Helix platform are
not ultimately launched; and the other risks set forth in the company’s filings with the Securities and Exchange Commission, including the risks set forth in the
company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. These forward-looking statements speak only as of the date hereof, and
Invitae Corporation disclaims any obligation to update these forward-looking statements.
NOTE: Invitae and the Invitae logo are trademarks of Invitae Corporation. All other trademarks and service marks are the property of their respective owners.
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 3
Consistent execution positioned us to drive revenue to cash flow positive
ü Reduced COGS from $500 to $450 in the quarter
ü Expanded to more than 1,000 genes in production ü ~200% year-over-year growth: increased volume to approximately 15,200
billable reports per quarter
ü Billing at an annual run rate of ~$70M, rapidly growing ü Over 200% growth in cancer business, over 400% in the rest
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 4
41M
Q2:16
Covered lives: now at more than 160 million
Q1:14
0.0M
Q2:14
0.0M
Q3:14
0.1M 0
Q4:14
4.5M
Q2:15
4.5M
Q1:15
4.5M
95M
Q3:16
100 million
50 million
Q1:16
5.5M
Q4:15
5.5M
Q3:15
5.5M
Q4:16
160M 150 million
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 5
Over the next two years you will see us emerge from a disruptive concept -- bringing genetics into
mainstream medicine -- into a rapidly growing business generating positive cash flow by the end of 2018
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 6
Introducing new indicators of success
§ Volume § Value of billable tests § Revenue and revenue per test at ~90 days payable § Average COGS per sample § Gross margin per sample § Opex with breakout § Change in cash
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 7
$118 $301 $310 $876 $1,200 $1,800 $2,200 $3,200
$4,000 $5,600
200 500 1,100 1,800 2,200 4,500 5,100
7,200
9,700 12,000
Billable tests
Revenue ($k)
§ Approximately $71.4 million in cash, cash equivalents, restricted cash and marketable securities at September 30, 2016
§ Expenses are incurred for tests in the period in which the test is conducted
§ Billable test numbers and revenues are approximate
Strong volume growth, with revenue following
15,200
$6,300
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 8
Improving our gross margins by decreasing COGs G
ross
mar
gin
per b
illab
le re
port
($100)
($300)
$0
-$74
Q2 2016
($500)
-$64
Q3 2016
-$342
Q3 2015
-$335
Q4 2015
-$209
Q1 2016
-$465
Q2 2015
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 9
Operating efficiency: growing volume while holding costs steady
Q3 2016 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q2 2015 Q1 2015
% R
even
ue
100
300
500
0
700
$0.0
$2.0
$6.0
$4.0 Rev
enue
($M
)
R&D Commercial G&A Revenue
$6.3M
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 10
Now that we have concluded contracts with a critical mass of third party payers, we are confident that we can build a genetic testing business that will generate positive cash flows by the end of 2018
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 11
In my experience, the pace at which we have converted payers in the last several months
is unprecedented and reflects a transition in the industry to a more modern billing and pricing system
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 12
Dramatic growth across all clinical areas
Q3 2016 Q4 2015 Q1 2016 Q2 2016
3,000
2,000
1,000
0
900
1,500
2,500
3,200
Q3 2016 Q4 2015 Q1 2016 Q2 2016
12,000
8,000
4,000
0
6,300
8,500
9,500
12,000
Quarterly oncology billable tests* Quarterly non-oncology billable tests*
*Billable test numbers are approximate. *Billable test numbers are approximate.
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 13
Advocacy organizations
Invitae’s network: established and growing
Biopharmaceutical
Payers & others
Platform
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 14
Invitae is no longer a concept story -- but a company with what we believe is the fastest
growing market share in the genetic testing industry and a clear path to becoming cash flow positive
CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 15
ü Reduced COGS from $500 to $450 in the quarter
ü Expanded to more than 1,000 genes in production
ü ~200% year-over-year growth: increased volume to approximately15,200 billable reports per quarter
ü Billing at an annual run rate of ~$70M, rapidly growing ü Over 200% growth in cancer business, over 400% in the rest
ü Significantly expanded in network coverage to more than 160 million lives
ü Building genome network with biopharma, advocacy, payers, clinicians and industry partners
ü Guiding towards positive cash flow by end of 2018
Consistent execution positioned us to drive revenue to cash flow positive