EX-99.1 2 a991pressreleaseforearning.htm EX-99.1 Document

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Invitae Reports $136.6 Million in Revenue in Second Quarter of 2022

— Continued to execute towards operational excellence with portfolio optimization, broad cost controls and cash management —
— Recently announced realignment plan is expected to extend the company’s cash runway to the end of 2024; Maintain financial guidance
— Conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time —

SAN FRANCISCO, August 9, 2022 – Invitae (NYSE: NVTA), a leading medical genetics company, today announced financial and operating results for the second quarter ended June 30, 2022.
“In the second quarter, we are pleased with our progress towards achieving operational excellence, as demonstrated by the improvements in several key metrics focusing on non-GAAP gross margin, operating expense, and cash burn trajectory, both on a year-over-year and quarter-over-quarter basis. These numbers reflected positive results based on the initiatives that we have been implementing,” said Ken Knight, president and chief executive officer of Invitae. “We recently announced our strategic realignment plan, as we step into our company’s next chapter. The planned changes are broad and necessary to continue driving us toward our goal of using our industry leading genetic testing, and advanced technologies, to transform healthcare for today and tomorrow. We have the roadmap and the pieces in place, and execution of our plan is top of mind as we fuel our testing business and make focused investment in delivering the future of personalized, genetically-driven healthcare.”

Second Quarter 2022 Highlights
•Generated revenue of $136.6 million in the quarter, a 17.5% increase compared to $116.3 million in the second quarter of 2021.
•GAAP gross profit was $26.3 million, and non-GAAP gross profit was $54.7 million in the second quarter of this year.
•GAAP gross margin was 19.2%. Non-GAAP gross margin was 40.1% as compared with 36.6% in the first quarter of 2022 and 35.4% in the second quarter of 2021.
•Cash, cash equivalents, restricted cash and marketable securities were $737 million as of June 30, 2022. Cash burn was $147 million, achieving a $22 million reduction from the first quarter of 2022.
•Total active healthcare provider accounts in the second quarter of 2022 totaled 20,217, roughly 25% growth over the second quarter of 2021.
•Active pharma and commercial partnerships grew to 232, an increase of approximately 52% over the second quarter of 2021, driving continued revenue growth from Invitae's lab services, data and data services platform to pharma, health system and software and services partners.
•Total patient population is more than 3.1 million with nearly 62% available for data sharing.
Total operating expense, which excludes cost of revenue, for the second quarter of 2022 was $2.5 billion, which included an asset impairment. As a result, GAAP operating expense as a percentage of revenue was 1,864%. Non-GAAP operating expense was $200.1 million for the second quarter of 2022. Non-GAAP operating expense as a percentage of revenue was 146%, which consistently improved as compared with 169% in the first quarter of 2022 and 170% in the second quarter of 2021.


Net loss for this year’s second quarter was $2.5 billion, or a $10.87 net loss per share, compared to net income of $133.8 million, or net income per share of $0.66, for the second quarter of 2021. Our second quarter 2022 net loss included a complete writedown of goodwill of $2.3 billion, which was a result of a significant, sustained decline in the stock price and related market capitalization and a lower than expected financial performance. It also included indefinite-lived intangible and asset impairments of $34.8 million. Net income for the second quarter in 2021 was a result of the change in fair value of contingent consideration. Non-GAAP net loss for the second quarter of 2022 was $158.5 million, or a $0.68 non-GAAP net loss per share, compared to a net loss of $171.5 million, or an $0.84 non-GAAP net loss per share, for the second quarter of 2021.
At June 30, 2022, cash, cash equivalents, restricted cash and marketable securities totaled $737 million as compared with $885 million as of March 31, 2022. Cash burn in this year’s second quarter, including cash paid for acquisition related activities, was $147 million, a decrease of $22 million or 13.2% from the first quarter of 2022 and approximately $50 million from the fourth quarter of 2021.

Financial Guidance
Invitae is reiterating its financial guidance. The company expects a low double-digit growth rate for its full year 2022 revenue over 2021. Longer term revenue growth rate is expected to return to between 15% and 25% beyond 2023.
Invitae is maintaining its 2022 cash burn guidance of $600-650 million, which includes up to an estimated $75 million cash to be used for realignment activities and severance. The company also continues to anticipate its cash burn to be in the range of $225-275 million in 2023, which includes up to an estimated $25 million cash to be used for realignment activities and severance.
2022 non-GAAP gross margins are expected to continue to increase for the rest of the year, based on ongoing margin improvement efforts and the current realignment initiatives, to the range of 42-43% for full year 2022.
Additional non-cash related charges are expected to be recorded in the third quarter of 2022 and in following quarters.

Webcast and Conference Call Details
Management will host a conference call and webcast today at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time to discuss financial results and recent developments. To access the conference call, please register at the link below:
https://events.q4inc.com/attendee/937240483
Upon registering, each participant will be provided with call details and a conference ID.
The live webcast of the call and slide deck may be accessed here or by visiting the investors section of the company's website at ir.invitae.com. A replay of the webcast will be available shortly after the conclusion of the call and will be archived on the company's website.

About Invitae
Invitae 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 Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the expected impact, benefits, parameters, details and timing of the company's strategic business realignment or various aspects thereof; the company's beliefs regarding the potential of its business, and its business priorities; the company's future financial and operating results, including estimated annual cost savings, cash runway, guidance for 2022 and beyond, and the drivers of future financial results; the company's beliefs regarding its roadmap and business going forward; and the company's focus for the remainder of 2022. 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 ability of the company to successfully execute its strategic business realignment and achieve the intended benefits thereof on the expected timeframe or at all; unforeseen or greater than expected costs associated with the strategic business realignment; the risk that the disruption that may result from the realignment may harm the company's business, market share or its relationship with customers or potential customers; 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 impact of inflation and the economic environment on the company's business; the company's ability to grow its business in a cost-effective manner; the company's history of losses; 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 ability of the company to obtain regulatory approval for its tests; the applicability of clinical results to actual outcomes; 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; 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 March 31, 2022. 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 measures
To 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. 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 uses such non-GAAP information to manage the company’s business and monitor its performance.
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 and on the company’s website.








INVITAE CORPORATION
Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30,
2022		December 31,
2021
Assets  
Current assets:  
Cash and cash equivalents$303,626 $923,250 
Marketable securities423,137 122,121 
Accounts receivable82,586 66,227 
Inventory49,073 33,516 
Prepaid expenses and other current assets35,825 33,691 
Total current assets894,247 1,178,805 
Property and equipment, net132,935 114,714 
Operating lease assets117,977 121,169 
Restricted cash10,026 10,275 
Intangible assets, net1,107,821 1,187,994 
Goodwill— 2,283,059 
Other assets27,520 23,551 
Total assets$2,290,526 $4,919,567 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$26,751 $21,127 
Accrued liabilities93,772 106,453 
Operating lease obligations13,388 12,359 
Finance lease obligations5,340 4,156 
Total current liabilities139,251 144,095 
Operating lease obligations, net of current portion142,509 124,369 
Finance lease obligations, net of current portion6,294 5,683 
Debt117,862 113,391 
Convertible senior notes, net1,467,443 1,464,138 
Deferred tax liability11,341 51,696 
Other long-term liabilities19,921 37,797 
Total liabilities1,904,621 1,941,169 
Stockholders’ equity:
Common stock24 23 
Accumulated other comprehensive loss(1,334)(7)
Additional paid-in capital4,815,383 4,701,230 
Accumulated deficit(4,428,168)(1,722,848)
Total stockholders’ equity385,905 2,978,398 
Total liabilities and stockholders’ equity$2,290,526 $4,919,567 




INVITAE CORPORATION
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Revenue:
Test revenue$133,182 $111,496 $252,679 $210,772 
Other revenue3,440 4,816 7,634 9,161 
Total revenue136,622 116,312 260,313 219,933 
Cost of revenue110,340 89,331 207,456 164,822 
Research and development115,146 106,454 243,382 186,812 
Selling and marketing62,749 56,964 122,893 108,204 
General and administrative52,858 38,303 104,132 110,820 
Asset impairment2,317,864 — 2,317,864 — 
Change in fair value of contingent consideration(2,004)(303,349)(1,850)(366,970)
Total cost and operating expenses2,656,953 (12,297)2,993,877 203,688 
(Loss) income from operations(2,520,331)128,609 (2,733,564)16,245 
Other income, net7,326 2,024 17,765 6,489 
Interest expense(14,019)(13,407)(28,004)(21,800)
Net (loss) income before taxes(2,527,024)117,226 (2,743,803)934 
Income tax benefit(3,563)(16,560)(38,483)(23,360)
Net (loss) income$(2,523,461)$133,786 $(2,705,320)$24,294 
Net (loss) income per share, basic$(10.87)$0.66 $(11.75)$0.12 
Net (loss) income per share, diluted$(10.87)$0.53 $(11.75)$0.11 
Shares used in computing net (loss) income per share, basic232,117 204,110 230,304 199,083 
Shares used in computing net (loss) income per share, diluted232,117 264,921 230,304 216,595 








INVITAE CORPORATION

Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
 Six Months Ended June 30,
 20222021
Cash flows from operating activities:  
Net (loss) income$(2,705,320)$24,294 
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Asset impairment2,317,864 — 
Depreciation and amortization64,247 35,262 
Stock-based compensation103,901 106,337 
Amortization of debt discount and issuance costs7,776 6,492 
Remeasurements of liabilities associated with business combinations(18,043)(372,722)
Benefit from income taxes(38,483)(23,360)
Post-combination expense for acceleration of unvested equity and deferred stock compensation3,320 2,959 
Amortization of premiums and discounts on investment securities1,178 3,465 
Other3,721 1,808 
Changes in operating assets and liabilities, net of businesses acquired:
Accounts receivable(16,359)(6,953)
Inventory(15,557)2,048 
Prepaid expenses and other current assets(2,134)(8,346)
Other assets(2,104)(2,165)
Accounts payable6,575 3,781 
Accrued expenses and other long-term liabilities7,186 8,255 
Net cash used in operating activities(282,232)(218,845)
Cash flows from investing activities:
Purchases of marketable securities(605,454)(325,957)
Proceeds from maturities of marketable securities301,933 127,738 
Acquisition of businesses, net of cash acquired— (134,006)
Purchases of property and equipment(36,970)(20,154)
Other— (1,880)
Net cash used in investing activities(340,491)(354,259)
Cash flows from financing activities:
Proceeds from public offerings of common stock, net— 434,263 
Proceeds from issuance of common stock6,234 11,717 
Proceeds from issuance of convertible senior notes, net— 1,116,850 
Finance lease principal payments(2,677)(2,126)
Other(707)(1,060)
Net cash provided by financing activities2,850 1,559,644 
Net (decrease) increase in cash, cash equivalents and restricted cash(619,873)986,540 
Cash, cash equivalents and restricted cash at beginning of period933,525 131,480 
Cash, cash equivalents and restricted cash at end of period$313,652 $1,118,020 




INVITAE CORPORATION

Reconciliation of GAAP to Non-GAAP Cost of Revenue
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Cost of revenue$110,340 $89,331 $207,456 $164,822 
Amortization of acquired intangible assets(27,907)(11,323)(45,907)(21,156)
Acquisition-related stock-based compensation(147)(1,306)(279)(2,240)
Acquisition-related post-combination expense(387)— (891)— 
Fair value adjustments to acquisition-related assets— (1,574)— (3,148)
Non-GAAP cost of revenue$81,899 $75,128 $160,379 $138,278 


Reconciliation of GAAP to Non-GAAP Gross Profit
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
2022202120222021
Revenue$136,622 $116,312 $260,313 $219,933 
Cost of revenue110,340 89,331 207,456 164,822 
Gross profit26,282 26,981 52,857 55,111 
Amortization of acquired intangible assets27,907 11,323 45,907 21,156 
Acquisition-related stock-based compensation147 1,306 279 2,240 
Acquisition-related post-combination expense387 — 891 — 
Fair value adjustments to acquisition-related assets— 1,574 — 3,148 
Non-GAAP gross profit$54,723 $41,184 $99,934 $81,655 


Reconciliation of GAAP to Non-GAAP Research and Development Expense
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Research and development$115,146 $106,454 $243,382 $186,812 
Amortization of acquired intangible assets(502)(530)(1,032)(1,060)
Acquisition-related stock-based compensation(23,255)(8,572)(47,024)(19,045)
Acquisition-related post-combination expense(2,643)(998)(5,224)(1,058)
Non-GAAP research and development$88,746 $96,354 $190,102 $165,649 













INVITAE CORPORATION

Reconciliation of GAAP to Non-GAAP Selling and Marketing Expense
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Selling and marketing$62,749 $56,964 $122,893 $108,204 
Amortization of acquired intangible assets(1,622)(1,685)(3,246)(3,377)
Acquisition-related stock-based compensation(985)(1,463)(1,568)(2,696)
Acquisition-related post-combination expense— 2 — (38)
Non-GAAP selling and marketing$60,142 $53,818 $118,079 $102,093 


Reconciliation of GAAP to Non-GAAP General and Administrative Expense
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
General and administrative$52,858 $38,303 $104,132 $110,820 
Acquisition-related stock-based compensation(1,646)9,724 (3,218)(21,250)
Acquisition-related post-combination expense— (5)— (3,747)
Non-GAAP general and administrative$51,212 $48,022 $100,914 $85,823 


Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Research and development$115,146 $106,454 $243,382 $186,812 
Selling and marketing62,749 56,964 122,893 108,204 
General and administrative52,858 38,303 104,132 110,820 
Asset impairment2,317,864 — 2,317,864 — 
Change in fair value of contingent consideration(2,004)(303,349)(1,850)(366,970)
Operating expenses2,546,613 (101,628)2,786,421 38,866 
Amortization of acquired intangible assets(2,124)(2,215)(4,278)(4,437)
Acquisition-related stock-based compensation(25,886)(311)(51,810)(42,991)
Acquisition-related post-combination expense(2,643)(1,001)(5,224)(4,843)
Asset impairment(2,317,864)— (2,317,864)— 
Fair value adjustments to acquisition-related liabilities2,004 303,349 1,850 366,970 
Non-GAAP operating expenses$200,100 $198,194 $409,095 $353,565 










INVITAE CORPORATION

Reconciliation of Other Income, Net to Non-GAAP Other Income (Expense), Net
(in thousands)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Other income, net$7,326 $2,024 $17,765 $6,489 
Fair value adjustments to acquisition-related liabilities(6,190)(2,374)(16,193)(5,752)
Non-GAAP other income (expense), net$1,136 $(350)$1,572 $737 



Reconciliation of Net (Loss) Income to Non-GAAP Net Loss and Non-GAAP Net Loss Per Share
(in thousands, except per share data)
(unaudited)
 Three Months Ended
June 30,		Six Months Ended
June 30,
 2022202120222021
Net (loss) income$(2,523,461)$133,786 $(2,705,320)$24,294 
Amortization of acquired intangible assets30,031 13,538 50,185 25,593 
Acquisition-related stock-based compensation26,033 1,617 52,089 45,231 
Acquisition-related post-combination expense3,030 1,001 6,115 4,843 
Fair value adjustments to acquisition-related assets and liabilities(8,194)(304,149)(18,043)(369,574)
Asset impairment2,317,864 — 2,317,864 — 
Acquisition-related income tax benefit(3,805)(17,287)(38,805)(24,087)
Non-GAAP net loss$(158,502)$(171,494)$(335,915)$(293,700)
Net (loss) income per share, basic$(10.87)$0.66 $(11.75)$0.12 
Net (loss) income per share, diluted$(10.87)$0.53 $(11.75)$0.11 
Non-GAAP net loss per share, basic$(0.68)$(0.84)$(1.46)$(1.48)
Non-GAAP net loss per share, diluted$(0.68)$(0.65)$(1.46)$(1.36)
Shares used in computing net (loss) income per share, basic232,117 204,110 230,304 199,083 
Shares used in computing net (loss) income per share, diluted232,117 264,921 230,304 216,595 




INVITAE CORPORATION

Reconciliation of Net Decrease in Cash, Cash Equivalents and Restricted Cash to Cash Burn
(in thousands)
(unaudited)
 Three Months EndedSix Months Ended
 March 31, 2022June 30, 2022June 30, 2022
Net cash used in operating activities$(147,543)$(134,689)$(282,232)
Net cash (used in) provided by investing activities(449,456)108,965 (340,491)
Net cash (used in) provided by financing activities(920)3,770 2,850 
Net decrease in cash, cash equivalents and restricted cash(597,919)(21,954)(619,873)
Adjustments:
Net changes in investments428,608 (125,087)303,521 
Cash burn$(169,311)$(147,041)$(316,352)
Contact for Invitae:
Hoki Luk
ir@invitae.com