NEW YORK – GeneDx said Tuesday after market close that its first quarter revenues fell 20 percent to $43.1 million from $53.9 million a year ago but easily outstripped the Wall Street consensus estimate of $38.0 million. Almost all revenues in the three months ended March 31 came from diagnostic testing.
GeneDx performed 52.8 million tests in the quarter, excluding COVID-19 tests, 28 percent more than the 41.1 million tests it conducted a year earlier when calculated on a pro forma basis. The company ceased COVID-19 testing in Q1 2022 but saw year-on-year growth in all other categories of testing, including whole exomes and whole genomes, exome-based panels, hereditary cancer tests, and single- and multi-gene disease assays.
In a conference call to discuss these Q1 financial results, President and CEO Katherine Stueland said that GeneDx has sequenced more than 450,000 exomes in its 10-year history, about one-fourth in the last 12 months. Whole-exome sequencing revenue in Q1 was up 22 percent from the year-earlier period.
Net loss for the quarter ended March 31 was $61.0 million, or $3.04 per share, down from a net loss of $76.9 million, or $10.38 per share, in 2022 Q1. Wall Street analysts, on average, had expected a net loss of $2.14 per share. The company used 20.1 million weighted average shares of common stock to compute net loss for Q1, compared to 7.4 million shares in the year-ago quarter.
On an adjusted basis, the company recorded a Q1 net loss of $48.9 million, compared to a net loss of $62.4 million a year earlier.
GeneDx's R&D spending in the quarter declined 31 percent to $14.6 million from $21.3 million, while SG&A costs dipped 21 percent to $57.2 million from $72.3 million.
The company had $201.9 million in cash and equivalents plus $12.1 million in restricted cash as of March 31. It has not yet drawn on a $125 million revolving credit facility it has available.
GeneDx reiterated an earlier forecast that it expects 2023 revenues of $205 million to $220 million and said once again that it is on course to become profitable in 2025.
The Stamford, Connecticut-based company, formerly known as Sema4, has been undergoing radical change as it attempts to chart a course toward profitability.
The former Sema4 purchased GeneDx in April 2022 from Opko Health for $623 million and has announced two restructurings and three rounds of job cuts since the acquisition closed.
In November, the firm said that it would exit reproductive health testing by the end of the first quarter of 2023 and close one of its laboratories near its headquarters. CFO Kevin Feeley said on the call that the shutdowns have been completed. The firm booked slightly more than $2.4 million from these discontinued operations in Q1.
The rebranded GeneDx instead is leaning into the clinical genomic testing market, focusing on whole-exome and whole-genome sequencing and related analysis to support precision medicine, particularly in rare pediatric diseases.
Stueland said that the year-on-year increase in testing volume across all non-COVID categories "gives us conviction that the strategy is working and these volume gains will materialize into revenue growth."
She also said that the company has for the past decade been trying to take advantage of a "massive conversion" to multi-gene diagnostic testing and now whole-exome and whole-genome testing. "With more data supporting the clinical necessity of exome sequencing versus multi-gene panels, GeneDx is now poised to lead this conversion to deliver more comprehensive, more definitive answers to more patients," she added.
Feeley said that the firm is working on lowering both test turnaround times and lab costs with initiatives including the purchase of unspecified "next-generation" Illumina instruments, consolidation of library preparation processes with help from Twist Bioscience, and increased use of artificial intelligence for report writing and genetic counseling.
In January, GeneDx brought in $150 million in gross proceeds from new public and direct stock offerings.
The company executed a 1-for-33 reverse stock split last week to regain compliance with Nasdaq's minimum bid price listing requirement of $1.00 per share.
Also last week, the firm said that it is now offering its GenomeXpress and GenomeSeqDx WGS tests with buccal swabs as a sample collection option for biological parents or other immediate family members of patients in cases where trio family testing is performed.
GeneDx shares were down less than 2 percent to $8.21 shortly after the market opened Wednesday.