GlobeNewswire Inc | Mar 16, 2021 04:05PM EDT

March 16, 2021

SAN DIEGO, March 16, 2021 (GLOBE NEWSWIRE) -- Exagen Inc. (Nasdaq: XGN),a leading provider of autoimmune testing solutions, today reported financial results for the fourth quarter and full year ended December 31, 2020.

Recent Highlights:

-- Generated total revenue of $42.0 million for the year ended December31, 2020, a 4% increase over 2019. -- Generated total revenue of $12.7 million for the fourth quarter of 2020, a 24% increase over the fourth quarter of 2019. -- Generated gross margin of $8.3 million and 66% for the fourth quarter of 2020. -- Delivered 28,601 flagship AVISE CTD tests, including AVISE Lupus, in the fourth quarter 2020, and 100,450 tests for the year ended December31, 2020. -- Number of ordering healthcare providers was 1,690 in the fourth quarter of 2020, including 635 adopters, and sequential quarterly retention rate of approximately 99% among adopting healthcare providers from the prior quarter. -- Entered into coverage and in-network agreements with Highmark, the fourth-largest overall Blue Cross Blue-Shield affiliated organization, and TRICARE West.

The fourth quarter of 2020 was strong for Exagen, despite continuing challenges from the COVID-19 pandemic. Our core testing business delivered record revenue in the fourth quarter, driven largely by record quarterly volumes for our flagship AVISE CTD test, achieving back-to-back annual volume of over 100,000 orders. It is also gratifying to note that we attained a record number of healthcare adopters in the quarter, along with another period of 99% retention rates, which we believe are indicative of the value healthcare providers place on our testing products," said Ron Rocca, President and Chief Executive Officer of Exagen. "Looking ahead, we believe the strategic salesforce expansion, and progress with reimbursements positions us for growth in 2021. We will continue to invest in our business to build a platform that offers to improve care for millions of patients suffering from autoimmune and autoimmune-related diseases."

Fourth Quarter 2020 Financial Results

Revenue for the three months ended December 31, 2020 was $12.7 million, compared with $10.2 million in the fourth quarter of 2019. Gross margin was 66% in the fourth quarter of 2020 compared to 55% in the fourth quarter of 2019, benefiting from an increase in SIMPONI revenues and a decrease in royalty costs associated with the expiration of a royalty on our CB-CAPs technology.

Operating expenses were $15.4 million in the fourth quarter of 2020, compared with $13.1 million in the fourth quarter of 2019, due to increases in employee related expenses from headcount growth, including stock-based compensation.

For the fourth quarter of 2020, net loss was $3.5 million, compared to a net loss of $3.4 million for the fourth quarter of 2019.

Cash and cash equivalents were approximately $57.4 million as of December31, 2020.

Full Year 2020 Financial Results

Revenue for the full year of 2020 was $42.0 million, compared with $40.4 million for the full year of 2019. Gross margin was 61% for the full year of 2020 compared to 53% for the full year of 2019, benefiting from an increase in SIMPONI revenues, a decrease in royalty costs associated with the expiration of a royalty on our CB-CAPs technology and a decrease in direct costs including materials and supplies.

Operating expenses were $57.2 million for the full year of 2020, compared with $49.7 million for the full year of 2019, due to increases in employee related expenses from headcount growth, including stock-based compensation, and public company expenses. This is partially offset by a decrease in costs of revenue.

For the full year of 2020, net loss was $16.7 million compared to a net loss of $12.0 million for the full year of 2019.

2021 Guidance

For the full year 2021, Exagen expects revenue to be in the range of $47 million to $49 million.

Conference Call

A conference call to review fourth quarter and year-ended 2020 financial results and to provide a business update is scheduled for today March 16, 2021 at 4:30 PM Eastern Time (1:30 PM Pacific Time). Interested parties may access the conference call by dialing (877) 407-3982 (U.S.) or (201) 493-6780 (international). Additionally, a link to a live webcast of the call will be available in the Investor Relations section of Exagen's website at http://investors.exagen.com.

Participants are asked to join a few minutes prior to the call to register for the event. A replay of the conference call will be available until Tuesday, March 23, 2021 at 11:59 PM Eastern Time (8:59 PM Pacific Time). Interested parties may access the replay by dialing (844) 512-2921 (U.S.) or (412) 317-6671 (international) using passcode 13716870. A link to the replay of the webcast will also be available in the investor relations section of Exagen's website.

About Exagen

Exagen is dedicated to transforming the care continuum for patients suffering from debilitating and chronic autoimmune diseases by enabling timely differential diagnosis and optimizing therapeutic intervention. Exagen has developed and is commercializing a portfolio of innovative testing products under its AVISE brand, several of which are based on our proprietary Cell-Bound Complement Activation Products, or CB-CAPs, technology. Exagens goal is to enable providers to improve care for patients through the differential diagnosis, prognosis and monitoring of complex autoimmune and autoimmune-related diseases, including rheumatoid arthritis and lupus. For further information please visit www.Exagen.com.

Forward Looking Statements

Exagen cautions you that statements contained in this press release regarding matters that are not historical facts are forward-looking statements. These statements are based on the companys current beliefs and expectations. Such forward-looking statements include, but are not limited to, statements regarding: the expected impact of, and continuing challenges from, the COVID-19 pandemic; the company's future potential growth in 2021; and the potential benefit of the company's testing products and promoted therapeutics to improve care for millions of patients suffering from autoimmune and autoimmune-related diseases. The inclusion of forward-looking statements should not be regarded as a representation by Exagen that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in Exagens business, including, without limitation: the COVID-19 pandemic may continue to adversely affect our business, financial condition and results of operations, including as a result of shutdowns of our facilities and operations as well as those of our suppliers and courier services, impeding patient movement and interruptions to healthcare services causing a decrease in test volumes, disruptions to the supply chain of material needed for our tests, our sales and commercialization activities and our ability to receive specimens and perform or deliver the results from our tests, delays in reimbursement and coverage decisions from Medicare and third-party payors and in interactions with regulatory authorities, and delays in ongoing and planned clinical trials involving our tests; the companys commercial success depends upon attaining and maintaining significant market acceptance of its testing products and promoted therapeutics among rheumatologists, patients, third-party payers and others in the medical community; the companys ability to successfully execute on its business strategy, including the company's ability to drive market penetration for its testing products and the integration of the promotion of testing products and therapeutics, including SIMPONI; third party payers not providing coverage and adequate reimbursement for the companys testing products or promoted therapeutics; the companys ability to obtain and maintain intellectual property protection for its testing products; regulatory developments affecting the companys business; and other risks described in the companys prior press releases and the Companys filings with the Securities and Exchange Commission (SEC), including under the heading Risk Factors in the companys Annual Report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Exagen undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

CONTACTS:

InvestorsWestwicke PartnersMike CavanaughMike.Cavanaugh@westwicke.com646.677.1838

CompanyExagen Inc.Kamal Adawi, Chief Financial Officerkadawi@exagen.com760.477.5514

Exagen Inc.

Unaudited Condensed Statements of Operations(in thousands, except share and per share data)

Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 (Unaudited)Revenue $ 12,668 $ 10,214 $ 41,975 $ 40,387 Operating expenses:Costs of revenue 4,335 4,591 16,559 18,808 Selling, generaland 9,929 7,915 37,033 28,702 administrativeexpensesResearch anddevelopment 1,165 566 3,568 2,176 expensesTotal operating 15,429 13,072 57,160 49,686 expensesLoss from (2,761 ) (2,858 ) (15,185 ) (9,299 ) operationsInterest expense (652 ) (771 ) (2,565 ) (3,491 ) Change in fairvalue of ? ? ? 267 financialinstrumentsOther income, (1 ) 246 984 510 netLoss before (3,414 ) (3,383 ) (16,766 ) (12,013 ) income taxesIncome tax(expense) (39 ) (25 ) 79 (25 ) benefitNet loss (3,453 ) (3,408 ) (16,687 ) (12,038 ) Accretion ofredeemable ? ? ? (4,640 ) convertiblepreferred stockDeemed dividendrecorded inconnection with ? ? ? (13,601 ) financingtransactionsNet lossattributable to $ (3,453 ) $ (3,408 ) $ (16,687 ) $ (30,279 ) commonstockholdersNet loss pershare, basic and $ (0.27 ) $ (0.27 ) $ (1.32 ) $ (8.46 ) dilutedWeighted-averagenumber of sharesused to compute 12,652,202 12,560,502 12,632,780 3,578,771 net loss pershare, basic anddiluted

Exagen Inc.

Condensed Balance Sheets(in thousands, except share and per share data)

December 31, 2020 2019Assets Current assets: Cash and cash equivalents $ 57,448 $ 72,084 Accounts receivable, net 8,910 5,715 Prepaid expenses and other current assets 4,159 3,451 Total current assets 70,517 81,250 Property and equipment, net 2,102 1,380 Goodwill 5,506 5,506 Other assets 250 174 Total assets $ 78,375 $ 88,310 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,014 $ 1,476 Accrued and other current liabilities 5,757 4,419 Total current liabilities 8,771 5,895 Borrowings-non-current portion, net of discounts 26,659 25,854 and debt issuance costsDeferred tax liabilities 158 264 Other non-current liabilities 948 638 Total liabilities 36,536 32,651 Commitments and contingencies Stockholders' equity: Preferred stock, $0.001 par value; 10,000,000shares authorized, no shares issued or ? ? outstanding at December31, 2020 and December31,2019Common stock, $0.001 par value; 200,000,000shares authorized at December31, 2020 andDecember31, 2019; 12,652,308 and 12,560,990 13 13 shares issued and outstanding at December31,2020 and December31, 2019, respectivelyAdditional paid-in capital 223,115 220,248 Accumulated deficit (181,289 ) (164,602 ) Total stockholders' equity 41,839 55,659 Total liabilities and stockholders' equity $ 78,375 $ 88,310