PR Newswire | Feb 17, 2021 04:06PM EST

Volume in 2020

02/17 15:05 CST

Invitae Reports $279.6 Million in Annual Revenue Driven by 659,000 in Billable Volume in 2020- Increased annual revenue by 29% and annual billable volume by 41% year-over-year -- Hosting conference call and webcast today at 4:30pm Eastern/1:30pm Pacific - SAN FRANCISCO, Feb. 17, 2021

SAN FRANCISCO, Feb. 17, 2021 /PRNewswire/ -- Invitae Corporation (NYSE: NVTA), a leading medical genetics company, today announced financial and operating results for the fourth quarter and full year ended December 31, 2020.

"Our results in 2020 demonstrate our ability to deliver sustained growth through commercial execution, a diversified global organization and continuous strategic additions to our menu, services and platform," said Sean George, co-founder and chief executive officer of Invitae. "Even amid the challenges of the pandemic, the durability of our relationships and the value of the information we provide to clinicians and patients was clear. As we enter 2021, we are committed to maintaining the pace we've set, making it ever-easier to integrate genetic information into healthcare decision-making by clinicians and patients at all stages of life."

Full Year and Fourth Quarter 2020 Financial Results

* Generated revenue of $279.6 million in 2020, including $100.4 million in the fourth quarter. * Reported 659,000 in billable test volume in 2020, including 238,000 in the fourth quarter. * Reported average cost per unit of $299 during 2020, and $284 in the fourth quarter. Non-GAAP average cost per unit was $261 for the year and $227 in the fourth quarter. * Reported gross profit of $81.3 million in 2020, including $32.2 million in the fourth quarter. Non-GAAP gross profit was $106.8 million in 2020, and $45.5 million in the fourth quarter.

Total operating expense, excluding cost of revenue, for the full year 2020 was $733.5 million. Operating expense for the fourth quarter of 2020 was $363.7 million. Non-GAAP operating expense was $456.1 million for the full year 2020 and $145.9 million in the fourth quarter.

For the full year 2020, net loss was $608.9 million, or a $4.52 net loss per share. For the fourth quarter of 2020, Invitae reported a net loss of $241.0 million, or a $1.34 net loss per share. Non-GAAP net loss was $373.9 million, or a $2.78 non-GAAP net loss per share in 2020. For the fourth quarter of 2020, Invitae reported a non-GAAP net loss of $113.1 million, or a $0.63 non-GAAP net loss per share.

At December 31, 2020, cash, cash equivalents, restricted cash and marketable securities totaled $360.7 million. Net decrease in cash, cash equivalents and restricted cash was $26.1 million in 2020 and a net increase of $18.4 million for the fourth quarter. Cash burn was $441.1 million in the fourth quarter of 2020, which includes $352.7 million for cash paid for acquisitions, primarily of ArcherDX, and $13.6 million for cash paid for acquisition related expenses. Cash burn for the quarter would have been approximately $74.8 million, which includes $29.1 million of burn by ArcherDX in the fourth quarter, without the acquisition and acquisition-related costs.

Subsequent to the close of the fourth quarter on January 26, 2021, the company announced the sale of approximately 8.9 million shares of its common stock at a price of $51.50 per share, resulting in net proceeds, after underwriting discounts and commissions and offering expenses, of more than $434 million.

Looking ahead to 2021 and factoring in the continued impact associated with the COVID-19 pandemic, Invitae reiterates its stated outlook for revenue growth targets of 50% - 60% annual growth over the next few years consistent with its view at the time of the announcement of the ArcherDX acquisition. Invitae anticipates generating revenue in excess of $450 million in 2021.

This press release contains non-GAAP financial measures. Investors are encouraged to review the non-GAAP reconciliations provided in the tables below.

Full Year Corporate HighlightsThroughout 2020 and into early 2021, the company has maintained its focus on continued development of its menu, services and platform:

* Menu * Added microbiome and infectious disease testing capabilities, offering a high-quality, low-cost, end-to-end metagenomics product (sequencing and results) and enabling the development of future offerings in infectious disease, preterm birth and wellness via the acquisition of One Codex. * Established an oncology offering encompassing germline and somatic testing, liquid biopsy and tissue genomic profiling via the Invitae platform through the acquisition of ArcherDX. * Added pharmacogenetic testing, and robust, integrated clinical decision support via the acquisition and integration of Genelex and You Script. * Added non-invasive prenatal screening (NIPS) based on whole genome sequencing (WGS) to the Invitae platform.

* Services * Signed 89 biopharma partnership deals in 2020, including 30 biopharma partnership deals in the fourth quarter. * Partnered with a major health system to integrate clinical decision support software for use of pharmacogenetics in patient care. * Introduced routine exome reanalysis to help patients receive accurate diagnoses faster. * Introduced consumer-initiated telehealth genetic testing services in Canada, including carrier testing in early pregnancy, and cancer and cardiovascular inherited risk screening. * Introduced expanded services and support for telemedicine across customer types. * Launched new capabilities for Gia, our advanced clinical chatbot, to support obstetrician/gynecologists, oncologists, genetic counselors and other clinicians who order genetic testing. * Increased support for the use of at-home testing using saliva kits, which do not require an in-person clinician visit. * Provided professional education and support for clinicians transitioning to telehealth.

* Platform * Added an industry-leading artificial-intelligence engine to the Invitae variant interpretation framework via the acquisition of Diploid to enable clinical diagnosis using exome and whole genome sequencing in minutes, enhancing Invitae's capabilities to provide rapid answers to patients while further reducing the cost of genetic testing at scale.

Full Year Scientific Highlights

The company continued to advance research illustrating the broad utility of genetic information in routine clinical care.

* Published findings from a multi-year collaboration with researchers at Mayo Clinic that found one in eight patients with cancer had an inherited, cancer-related gene mutation, half of whom would not have been detected using a standard guidelines-based approach and one-third of whom had their therapy changed as a result of their genetics. The data support changing the standard of care to include germline genetic testing for all solid tumor cancer patients. * Announced partnership with Bristol Myers Squibb, Janssen Research & Development, LLC (Janssen), Novartis and Genentech, a member of the Roche Group, to standardize molecular residual disease (MRD) data generation and assessment and to accelerate acute myeloid leukemia (AML) clinical trial programs to help bring novel therapies to patients in need faster. * Published research showing germline genetic testing detects actionable findings missed by tumor-only sequencing, suggesting all cancer patients could benefit from both germline and somatic testing and demonstrating the utility of germline testing in identifying additional treatment options for cancer patients. * Presented data showing one in ten men with prostate cancer harbor genetic changes linked to hereditary cancer syndromes and three-quarters of those patients met criteria for changes in cancer management or treatment based on their genetic findings suggesting broader screening for prostate cancer patients.

Webcast and Conference Call DetailsManagement will host a conference call and webcast today at 4:30 p.m. Eastern / 1:30 p.m. Pacific to discuss financial results and recent developments. To register for the conference call and webcast, please use one of the methods below. Upon registering, each participant will be provided with call details and a registrant ID. Reminders will also be sent to registered participants via email.

Online registration: http://www.directeventreg.com/registration/event/2952997

Phone registration: 833-508-4355 or 415-481-6010

The live webcast of the call and slide deck may be accessed by visiting the investors section of the company's website at ir.invitae.com. A replay of the webcast and conference call will be available shortly after the conclusion of the call and will be archived on the company's website.

About InvitaeInvitae Corporation (NYSE: NVTA) is a leading medical genetics company whose mission is to bring comprehensive genetic information into mainstream medicine to improve healthcare for billions of people. Invitae's goal is to aggregate the world's genetic tests into a single service with higher quality, faster turnaround time, and lower prices. For more information, visit the company's website at invitae.com.

Safe Harbor StatementThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the company's belief regarding the value and leverage of its global, diversified business; the company's future results, including anticipated 2021 revenue and expected future annual revenue growth targets; the company's beliefs regarding its ability to deliver sustained growth and the drivers of its growth; the benefits and value of customer relationships and the information the company provides; the company's beliefs regarding its ability to execute its business strategy; and the benefits and importance of the company's recent studies, research and collaborations. 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: the impact of COVID-19 on the company, and the effectiveness of the efforts it has taken or may take in the future in response thereto; the company's ability to continue to grow its business, including internationally; the loss of important customer relationships; the company's ability to compete; the company's failure to manage growth effectively; the company's need to scale its infrastructure in advance of demand for its tests and to increase demand for its tests; the risk that the company may not obtain or maintain sufficient levels of reimbursement for its tests; the company's failure to successfully integrate or fully realize the anticipated benefits of acquired businesses; risks associated with litigation; the company's ability to use rapidly changing genetic data to interpret test results accurately and consistently; the applicability of clinical research results to actual outcomes; the success of collaborations; security breaches, loss of data and other disruptions; laws and regulations applicable to the company's business; and the other risks set forth in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. These forward-looking statements speak only as of the date hereof, and Invitae Corporation disclaims any obligation to update these forward-looking statements.

Non-GAAP Financial MeasuresTo supplement Invitae's consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP), the company is providing several non-GAAP measures, including non-GAAP gross profit, non-GAAP cost of revenue, non-GAAP operating expense, including non-GAAP research and development, non-GAAP selling and marketing, non-GAAP general and administrative and non-GAAP other income (expense), net, as well as non-GAAP net loss and non-GAAP net loss per share and non-GAAP cash burn. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly-titled measures presented by other companies. Management believes these non-GAAP financial measures are useful to investors in evaluating the company's ongoing operating results and trends.

Management is excluding from some or all of its non-GAAP operating results (1) amortization of acquired intangible assets, (2) acquisition-related stock-based compensation, (3) post-combination expense related to the acceleration of equity grants or bonus payments in connection with business combinations, (4) adjustments to the fair value of certain acquisition-related assets and liabilities and (5) acquisition-related income tax benefits. These non-GAAP financial measures are limited in value because they exclude certain items that may have a material impact on the company's reported financial results. Management accounts for this limitation by analyzing results on a GAAP basis as well as a non-GAAP basis and also by providing GAAP measures in the company's public disclosures.

Cash burn excludes (1) changes in marketable securities, (2) cash received from equity financings (3) proceeds from issuance of debt and (4) cash received from exercises of warrants. Management believes cash burn is a liquidity measure that provides useful information to management and investors about the amount of cash consumed by the operations of the business. A limitation of using this non-GAAP measure is that cash burn does not represent the total change in cash, cash equivalents, and restricted cash for the period because it excludes cash provided by or used for other operating, investing or financing activities. Management accounts for this limitation by providing information about the company's operating, investing and financing activities in the statements of cash flows in the consolidated financial statements in the company's most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K and by presenting net cash provided by (used in) operating, investing and financing activities as well as the net increase or decrease in cash, cash equivalents and restricted cash in its reconciliation of cash burn.

In addition, other companies, including companies in the same industry, may not use the same non-GAAP measures or may calculate these metrics in a different manner than management or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP measures as comparative measures. Because of these limitations, the company's non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the non-GAAP reconciliations provided in the tables below.

INVITAE CORPORATION



Consolidated Balance Sheets

(in thousands)

(unaudited)



December 31,

2020 2019

Assets

Current assets:

Cash and cash equivalents $124,794 $151,389

Marketable securities 229,186 240,436

Accounts receivable 47,722 32,541

Inventory 32,030 6,648

Prepaid expenses and other current assets 20,200 11,384

Total current assets 453,932 442,398

Property and equipment, net 66,102 37,747

Operating lease assets 45,109 36,640

Restricted cash 6,686 6,183

Intangible assets, net 981,845 125,175

Goodwill 1,856,923 126,777

Other assets 13,188 6,681

Total assets $3,423,785$781,601

Liabilities and stockholders' equity

Current liabilities:

Accounts payable $25,203 $10,321

Accrued liabilities 86,058 64,814

Operating lease obligation 8,789 4,870

Finance lease obligation 1,695 1,855

Total current liabilities 121,745 81,860

Operating lease obligation, net of current portion48,357 42,191

Finance lease obligation, net of current portion 3,123 1,155

Debt 104,449 -

Convertible senior notes, net 283,724 268,755

Deferred tax liability 51,538 -

Other long-term liabilities 841,256 8,000

Total liabilities 1,454,192 401,961

Stockholders' equity:

Common stock 19 10

Accumulated other comprehensive loss 1 (9)

Additional paid-in capital 3,337,120 1,138,316

Accumulated deficit (1,367,547)(758,677)

Total stockholders' equity 1,969,593 379,640

Total liabilities and stockholders' equity $3,423,785$781,601

INVITAE CORPORATION



Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Revenue:

Test revenue $ 96,807 $65,050 $272,310 $212,473

Other revenue 3,624 1,235 7,288 4,351

Total revenue 100,431 66,285 279,598 216,824

Cost of revenue 68,258 36,723 198,275 118,103

Research and development 72,172 51,279 240,605 141,526

Selling and marketing 48,877 34,575 168,317 122,237

General and administrative 242,607 22,744 324,573 79,070

Loss from operations (331,483) (79,036) (652,172) (244,112)

Other income (expense), net 167 1,681 (32,332) (3,891)

Interest expense (12,522) (5,350) (29,766) (12,412)

Net loss before taxes (343,838) (82,705) (714,270) (260,415)

Income tax benefit (102,800) (5,800) (105,400) (18,450)

Net loss $ (241,038) $(76,905) $(608,870)$(241,965)

Net loss per share, basic and diluted $ (1.34) $(0.79) $(4.52) $(2.66)

Shares used in computing net loss per share, basic and diluted179,860 97,374 134,587 90,859

INVITAE CORPORATION



Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



Year Ended December 31,

2020 2019 2018

Cash flows from operating activities:

Net loss $(608,870)$(241,965)$(129,355)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 39,050 16,206 13,540

Stock-based compensation 158,747 75,948 20,850

Amortization of debt discount and issuance costs 17,204 4,416 -

Impairment losses - - 2,925

Remeasurements of liabilities associated with business combinations 92,349 - -

Benefit from income taxes (105,400) (18,450) (2,862)

Debt extinguishment costs - 8,926 5,266

Post-combination expense for acceleration of unvested equity 91,021 - -

Other 573 1,095 1,168

Changes in operating assets and liabilities, net of businesses acquired:

Accounts receivable (2,814) (6,131) (5,291)

Inventory (7,832) 1,645 (2,848)

Prepaid expenses and other current assets (2,010) (6,624) 1,403

Other assets 895 2,026 (163)

Accounts payable 10,186 1,558 (417)

Accrued expenses and other long-term liabilities 17,547 16,297 3,564

Net cash used in operating activities (299,354) (145,053) (92,220)

Cash flows from investing activities:

Purchases of marketable securities (280,258) (260,917) (9,680)

Proceeds from sales of marketable securities 12,832 - 19,965

Proceeds from maturities of marketable securities 277,487 34,500 32,458

Acquisition of businesses, net of cash acquired (383,753) (33,846) -

Purchases of property and equipment (22,865) (20,047) (5,970)

Other (4,025) - (1,000)

Net cash provided by (used in) investing activities (400,582) (280,310) 35,773

Cash flows from financing activities:

Proceeds from public offerings of common stock, net of issuance costs263,688 204,024 112,441

Proceeds from issuance of common stock, net 279,203 9,470 17,511

Proceeds from issuance of convertible senior notes, net - 339,900 -

Proceeds from issuance of debt, net 129,214 - 93,909

Payments of debt extinguishment costs - (10,638) (4,609)

Loan payments - (75,000) (60,000)

Other 1,739 (2,985) (2,100)

Net cash provided by financing activities 673,844 464,771 157,152

Net increase (decrease) in cash, cash equivalents and restricted cash(26,092) 39,408 100,705

Cash, cash equivalents and restricted cash at beginning of period 157,572 118,164 17,459

Cash, cash equivalents and restricted cash at end of period $131,480 $157,572 $118,164

INVITAE CORPORATION



Reconciliation of GAAP to Non-GAAP Cost of Revenue

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Cost of revenue $68,258 $36,723 $198,275$118,103

Amortization of acquired intangible assets (9,805) (2,038) (21,943) (4,435)

Acquisition-related stock-based compensation (1,954) - (1,954) -

Fair value adjustments to acquisition-related assets(1,574) - (1,574) -

Non-GAAP cost of revenue $54,925 $34,685 $172,804$113,668





Reconciliation of GAAP to Non-GAAP Gross Profit

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Revenue $100,431 $66,285 $279,598$216,824

Cost of revenue 68,258 36,723 198,275 118,103

Gross profit 32,173 29,562 81,323 98,721

Amortization of acquired intangible assets - cost of9,805 2,038 21,943 4,435 revenue

Acquisition-related stock-based compensation 1,954 - 1,954 -

Fair value adjustments to acquisition-related assets1,574 - 1,574 -

Non-GAAP gross profit $45,506 $31,600 $106,794$103,156





Reconciliation of GAAP to Non-GAAP Research and Development Expense

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Research and development $72,172 $51,279 $240,605$141,526

Amortization of acquired intangible assets (470) (117) (820) (467)

Acquisition-related stock-based compensation (16,204) (17,907) (68,215) (39,106)

Acquisition-related post-combination expense (60) - (120) -

Non-GAAP research and development $55,438 $33,255 $171,450$101,953

INVITAE CORPORATION



Reconciliation of GAAP to Non-GAAP Selling and Marketing Expense

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Selling and marketing $ 48,877 $34,575 $168,317$122,237

Amortization of acquired intangible assets (1,536) (675) (3,868) (2,699)

Acquisition-related stock-based compensation(3,155) - (3,155) -

Acquisition-related post-combination expense(40) - (80) -

Non-GAAP selling and marketing $ 44,146 $33,900 $161,214$119,538





Reconciliation of GAAP to Non-GAAP General and Administrative Expense

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

General and administrative $ 242,607 $22,744 $324,573$79,070

Amortization of acquired intangible assets - (29) (10) (114)

Acquisition-related stock-based compensation(20,147) - (20,147) -

Acquisition-related post-combination expense(125,842) (640) (126,342)(6,798)

Fair value adjustments to (50,317) - (54,645) - acquisition-related liabilities

Non-GAAP general and administrative $ 46,301 $22,075 $123,429$72,158





Reconciliation of Operating Expense to Non-GAAP Operating Expense

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Research and development $ 72,172 $51,279 $240,605$141,526

Selling and marketing 48,877 34,575 168,317 122,237

General and administrative 242,607 22,744 324,573 79,070

Operating expense 363,656 108,598 733,495 342,833

Amortization of acquired intangible assets (2,006) (821) (4,698) (3,280)

Acquisition-related stock-based compensation(39,506) (17,907) (91,517) (39,106)

Acquisition-related post-combination expense(125,942) (640) (126,542)(6,798)

Fair value adjustments to (50,317) (300) (54,645) (600) acquisition-related liabilities

Non-GAAP operating expense $ 145,885 $88,930 $456,093$293,049

INVITAE CORPORATION



Reconciliation of Other Income (Expense), Net to Non-GAAP Other Income (Expense), Net

(in thousands)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Other income (expense), net $ 167 $1,681 $(32,332) $(3,891)

Fair value adjustments to acquisition-related liabilities(410) - 37,527 -

Non-GAAP other income (expense), net $ (243) $1,681 $5,195 $(3,891)





Reconciliation of Net Loss to Non-GAAP Net Loss Per Share

(in thousands, except per share data)

(unaudited)



Three Months Ended December 31,Year Ended December 31,

2020 2019 2020 2019

Net loss $ (241,038) $(76,905) $(608,870)$(241,965)

Amortization of acquired intangible assets 11,811 2,859 26,641 7,715

Acquisition-related stock-based compensation 41,460 17,907 93,471 39,106

Acquisition-related post-combination expense 125,942 640 126,542 6,798

Fair value adjustments to acquisition-related assets and 51,481 300 93,746 600 liabilities

Acquisition-related income tax benefit (102,800) (5,800) (105,400) (18,450)

Non-GAAP net loss $ (113,144) $(60,999) $(373,870)$(206,196)



Net loss per share, basic and diluted $ (1.34) $(0.79) $(4.52) $(2.66)

Non-GAAP net loss per share, basic and diluted $ (0.63) $(0.63) $(2.78) $(2.27)

Shares used in computing net loss per share, basic and 179,860 97,374 134,587 90,859 diluted

INVITAE CORPORATION



Reconciliation of Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash to Cash Burn

(in thousands)

(unaudited)



Three Months Ended Year Ended

March 31, 2020June 30, 2020September 30, 2020December 31, 2020December 31, 2020

Net cash used in operating activities $(62,361) $(60,393) $(62,166) $(114,433) $ (299,353)

Net cash provided by (used in) investing activities 801 (83,418) (5,674) (312,292) (400,583)

Net cash provided by financing activities 551 221,794 6,415 445,084 673,844

Net increase (decrease) in cash, cash equivalents and restricted cash(61,009) 77,983 (61,425) 18,359 (26,092)

Adjustments:

Purchases of investments - 115,350 64,671 100,237 280,258

Sales of investments (12,532) - (300) - (12,832)

Maturities of investments (24,965) (65,000) (62,500) (125,022) (277,487)

Proceeds from public offering of common stock, net of issuance costs - (217,489) - (46,199) (263,688)

Proceeds from common stock issued in private placement, net - - (5,000) (258,628) (263,628)

Proceeds from issuance of debt, net - - - (129,214) (129,214)

Proceeds from exercises of warrants (27) (35) (324) (588) (974)

Cash burn $(98,533) $(89,191) $(64,878) $(441,055) $ (693,657)



- Cash burn for the three months ended December 31, 2020 includes $352.7 million of cash paid for acquisitions and $13.6 million in acquisition-related transaction costs.



- Cash burn for the year ended December 31, 2020 includes $410.4 million of cash paid for acquisitions and $13.6 million in acquisition-related transaction costs.

Contact:Laura D'Angeloir@invitae.com(628) 213-3369

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SOURCE Invitae Corporation