GeneDx Reports First Quarter 2024 Financial Results and Business Highlights

/EIN News/ -- Reported first quarter 2024 revenue from continuing operations¹ of $61.5M with 96% year-over-year growth of exome and genome test revenue

Expanded first quarter 2024 adjusted gross margins² from continuing operations to 61%

Narrowed first quarter 2024 adjusted net loss² to $8.5M and delivered 71% year-over-year cash burn reduction

Raised guidance to deliver between $235M and $245M in FY 2024 revenue and reiterate path to profitability in 2025

GeneDx to host conference call today at 4:30 p.m. ET

STAMFORD, Conn., April 29, 2024 (GLOBE NEWSWIRE) -- GeneDx Holdings Corp. (Nasdaq: WGS), a leader in delivering improved health outcomes through genomic insights, today reported its financial results for the first quarter of 2024.

“Our strong first quarter results reflect our continued dedication to our three key organizational focuses: growing exome and genome revenue, increasing our average reimbursement rates while expanding access to testing, and meaningfully reducing our cash burn,” said Katherine Stueland, Chief Executive Officer of GeneDx. “Our team’s successful execution in the first quarter gives us the confidence to raise full year 2024 revenue guidance to between $235-$245 million and reiterate our expectation to reach profitability in 2025.”

First Quarter 2024 Financial Results (Unaudited)^1,2

Revenues

• Revenues from continuing operations grew to $61.5 million, an increase of 51% year-over-year and 6% sequentially.
  • Total company revenues were $62.4 million.
• Exome and genome test revenue grew to $44.0 million, an increase of 96% year-over-year and 12% sequentially.
  

Exome and genome volume

• Exome and genome test results volume grew to 16,592, an increase of 91% year-over-year and 6% sequentially.
• Exome and genome represented 30% of all test results, up from 16% in the first quarter of 2023 and up from 27% in the fourth quarter of 2023.

Gross margin

• Adjusted gross margin from continuing operations expanded to 61%, up from 34% in the first quarter of 2023 and up from 56% in the fourth quarter of 2023.
  • Total company gross margin was 60%.
• Exome and genome adjusted gross margin operated in excess of 65%.
  

Operating expenses

• Adjusted total operating expenses reduced to $45.4 million, a decrease of 26% year-over-year and 6% sequentially.
  • Total GAAP operating expenses were $50.1 million.

Net loss

• Adjusted net loss narrowed to $8.5 million, an improvement of 83% year-over-year and 52% sequentially.
  • GAAP net loss was $20.2 million.

Cash burn and cash position

• Total net use of cash was $17.2 million in the first quarter of 2024, an improvement of 71% year-over-year and 48% sequentially.
• Cash, cash equivalents, marketable securities and restricted cash was $113.9 million as of March 31, 2024.

1. Revenue and gross margin results from continuing operations, which we believe are representative of our ongoing business strategy exclude any revenue and cost of goods sold of the exited Legacy Sema4 diagnostic testing business for the current and all comparative periods. Total company results include GeneDx’s continuing operations and the financial impacts of exited Legacy Sema4 business activities for the current and all comparative periods.
2. Adjusted gross margin, adjusted total operating expenses and adjusted net loss are non-GAAP financial measures. See appendix for a reconciliation of GAAP to Non-GAAP figures presented.

Updated GeneDx Full Year 2024 Guidance

GeneDx has updated its full year 2024 guidance. Management expects GeneDx to:

• Drive full year 2024 revenues between $235 and $245 million (previous guidance was $220 to $230 million);
• Expand full year 2024 adjusted gross margin profile to at least 60% (previous guidance was at least 50%);
• Use $70 to $80 million of net cash for full year 2024 (previous guidance was $75 to $80 million);
• Turn profitable in 2025 (no change).

First Quarter 2024 Business Highlights

Driving sustainable growth and market leadership

• Reached new milestone of sequencing 600k clinical exomes and genomes since inception, with over half sequenced since July 2021 and 100k sequenced since the fall. This continued acceleration of exome and genome sequencing and interpretation further solidifies GeneDx’s industry leadership, enhances the robustness of its proprietary dataset, and enables more definitive diagnoses for more patients.
• Presented new data at the American College of Medical Genetics and Genomics Annual Meeting further demonstrating the clinical superiority of exome compared to chromosomal microarray (“CMA”), supporting our efforts to eliminate the need for CMA to be ordered when exome is ordered first.
• State Medicaid programs continue to expand coverage of rapid genetic testing in the neonatal intensive care unit (“NICU”), bringing total states covering rapid whole genome in the acute care setting to 11, including new coverage announced in:
  • Georgia (January 2024)
  • South Dakota (March 2024)
• New York added outpatient whole exome sequencing (“WES”) coverage to their Medicaid plan, effective April 1, 2024, bringing total states covering WES to 28.
• Grew biopharma partner programs to 21, predominantly with biotech companies who are relying on us to find patients with a specific variant for clinical trial purposes.
• Launched a strategic partnership with Komodo Health, a premier healthcare technology company for the pharmaceutical industry, enabling improved access to genetic insights that can help inform drug pipelines and accelerate clinical trial enrollment for biopharma partners.

Webcast and Conference Call Details

GeneDx will host a conference call today, April 29, 2024, at 4:30 p.m. Eastern Time. Investors interested in listening to the conference call are required to register online. A live and archived webcast of the event will be available on the “Events” section of the GeneDx investor relations website at https://ir.genedx.com/.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding our future performance and our market opportunity, including our expected full year 2024 reported revenue guidance, our expectations regarding our adjusted gross margin profile in 2024, our use of net cash in 2024 and our turning profitable in 2025. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: (i) our ability to implement business plans, goals and forecasts, and identify and realize additional opportunities, (ii) the risk of downturns and a changing regulatory landscape in the highly competitive healthcare industry, (iii) the size and growth of the market in which we operate, (iv) our ability to pursue our new strategic direction, and (vi) our ability to enhance our artificial intelligence tools that we use in our clinical interpretation platform. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 23, 2024 and other documents filed by us from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.

About GeneDx

At GeneDx (Nasdaq: WGS), we believe that everyone deserves personalized, targeted medical care—and that it all begins with a genetic diagnosis. Fueled by one of the world’s largest rare disease data sets, our industry-leading exome and genome tests translate complex genomic data into clinical answers that unlock personalized health plans, accelerate drug discovery, and improve health system efficiencies. It all starts with a single test. For more information, please visit genedx.com and connect with us on LinkedIn, X, Facebook, and Instagram.

Investor Relations Contact:
Investors@GeneDx.com

Media Contact:
Press@GeneDx.com

Volume and revenue in the table below include the combination of the Legacy GeneDx diagnostic business with the data and information business of Legacy Sema4.

Volume & Revenue

	1Q24				4Q23				3Q23				2Q23				1Q23
Volumes
Whole exome, whole genome		16,592				15,663				13,216				11,855				8,705
Hereditary cancer		6,868				8,240				8,556				7,142				7,120
Other panels		31,763				33,692				35,861				35,931				36,953
Total		55,223				57,595				57,633				54,928				52,778
Revenue ($ millions)
Whole exome, whole genome	$	44.0			$	39.2			$	34.0			$	28.7			$	22.4
Hereditary cancer		5.5				5.5				4.5				3.8				4.3
Other panels		10.7				11.2				10.6				10.6				12.7
Data information		1.3				2.2				1.3				2.1				1.3
Total	$	61.5			$	58.1			$	50.4			$	45.2			$	40.7

Unaudited Select Financial Information (in thousands)

	Three months ended March 31, 2024												Three months ended December 31, 2023
	GeneDx				Legacy Sema4				Total				GeneDx				Legacy Sema4				Total
Revenue	$	61,461			$	961			$	62,422			$	58,107			$	(689	)		$	57,418
Adjusted cost of services		24,099				—				24,099				25,626				—				25,626
Adjusted gross profit (loss)	$	37,362			$	961			$	38,323			$	32,481			$	(689	)		$	31,792
Adjusted gross margin %		60.8	%			(100.0	)%			61.4	%			55.9	%			100.0	%			55.4	%

	Three months ended March 31, 2023
	GeneDx				Legacy Sema4				Total
Revenue	$	40,693			$	2,446			$	43,139
Adjusted cost of services		26,826				2,080				28,906
Adjusted gross profit (loss)	$	13,867			$	366			$	14,233
Adjusted gross margin %		34.1	%			15.0	%			33.0	%

	Three months ended March 31, 2024
	Reported				Depreciation and amortization				Stock-based compensation expense				Restructuring costs				Change in FV of financial liabilities				Charges related to business exit				Other				Adjusted
Diagnostic test revenue	$	61,104			$	—			$	—			$	—			$	—			$	—			$	—			$	61,104
Other revenue		1,318				—				—				—				—				—				—				1,318
Total revenue		62,422				—				—				—				—				—				—				62,422
Cost of services		25,011				(816	)			(48	)			(48	)			—				—				—				24,099
Gross profit (loss)		37,411				816				48				48				—				—				—				38,323
Gross margin		59.9	%																											61.4	%
Research and development		11,567				(196	)			187				(103	)			—				—				—				11,455
Selling and marketing		16,085				(1,225	)			20				(400	)			—				—				—				14,480
General and administrative		22,445				(3,011	)			292				(292	)			—				—				—				19,434
Impairment loss		—				—				—				—				—				—				—				—
Other, net		974				—				—				—				—				—				—				974
Loss from operations		(13,660	)			5,248				(451	)			843				—				—				—				(8,020	)
Interest income (expense), net		(597	)			—				—				—				—				—				—				(597	)
Other income (expense), net		(6,064	)			—				—				—				6,101				—				—				37
Income tax benefit		82				—				—				—				—				—				—				82
Net loss	$	(20,239	)		$	5,248			$	(451	)		$	843			$	6,101			$	—			$	—			$	(8,498	)

	Three months ended March 31, 2023
	Reported				Depreciation and amortization				Stock-based compensation expense				Restructuring costs				Change in FV of financial liabilities				Charges related to business exit				Other				Adjusted
Diagnostic test revenue	$	41,850			$	—			$	—			$	—			$	—			$	—							$	41,850
Other revenue		1,289				—				—				—				—				—				—				1,289
Total revenue		43,139				—				—				—				—				—				—				43,139
Cost of services		27,903				(589	)			1,666				(74	)			—				—				—				28,906
Gross profit (loss)		15,236				589				(1,666	)			74				—				—				—				14,233
Gross margin		35.3	%																											33.0	%
Research and development		14,592				(852	)			(943	)			(91	)			—				—				—				12,706
Selling and marketing		13,452				(1,227	)			(63	)			(142	)			—				—				—				12,020
General and administrative		43,689				(5,968	)			(708	)			(395	)			—				—				—				36,618
Impairment loss		2,120				—				—				—				—				(2,120	)			—				—
Other, net		1,747				—				—				—				—				—				—				1,747
Loss from operations		(60,364	)			8,636				48				702				—				2,120				—				(48,858	)
Interest income (expense), net		(35	)			—				—				—				—				—				—				(35	)
Other income (expense), net		(737	)			—				—				—				3,453				—				(2,750	)			(34	)
Income tax benefit		147				—				—				—				—				—				—				147
Net loss	$	(60,989	)		$	8,636			$	48			$	702			$	3,453			$	2,120			$	(2,750	)		$	(48,780	)

	Three months ended December 31, 2023
	Reported				Depreciation and amortization				Stock-based compensation expense				Restructuring costs				Change in FV of financial liabilities				Charges related to business exit				Other				Adjusted
Diagnostic test revenue	$	55,214			$	—			$	—			$	—			$	—			$	—			$	—			$	55,214
Other revenue		2,204				—				—				—				—				—				—				2,204
Total revenue		57,418				—				—				—				—				—				—				57,418
Cost of services		26,664				(915	)			(123	)			—				—				—				—				25,626
Gross profit (loss)		30,754				915				123				—				—				—				—				31,792
Gross margin		53.6	%																											55.4	%
Research and development		12,248				(919	)			2,320				(1,300	)			—				—				—				12,349
Selling and marketing		15,559				(1,225	)			1,071				(487	)			—				—				—				14,918
General and administrative		26,626				(3,035	)			(2,356	)			(197	)			—				—				—				21,038
Impairment loss		—				—				—				—				—				—				—				—
Other, net		1,964				—				—				—				—				(1,277	)			—				687
Loss from operations		(25,643	)			6,094				(912	)			1,984				—				1,277				—				(17,200	)
Interest income (expense), net		(978	)			—				—				—				—				—				—				(978	)
Other income (expense), net		437				—				—				—				(485	)			—				48				—
Income tax benefit		411				—				—				—				—				—				—				411
Net loss	$	(25,773	)		$	6,094			$	(912	)		$	1,984			$	(485	)		$	1,277			$	48			$	(17,767	)

GeneDx Holdings Corp. Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts)
	March 31, 2024 (Unaudited)				December 31, 2023
Assets:
Current assets:
Cash and cash equivalents	$	83,673			$	99,681
Marketable securities		29,239				30,467
Accounts receivable		28,151				32,371
Due from related parties		772				445
Inventory, net		11,615				8,777
Prepaid expenses and other current assets		9,974				10,598
Total current assets		163,424				182,339
Operating lease right-of-use assets		26,304				26,900
Property and equipment, net		31,301				32,479
Intangible assets, net		169,119				172,625
Other assets (1)		4,380				4,413
Total assets	$	394,528			$	418,756
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable and accrued expenses	$	32,410			$	37,456
Due to related parties		1,041				1,379
Short-term lease liabilities		4,043				3,647
Other current liabilities		13,240				16,336
Total current liabilities		50,734				58,818
Long-term debt, net of current portion		52,293				52,688
Long-term lease liabilities		62,030				62,938
Other liabilities		20,836				14,735
Deferred taxes		1,418				1,560
Total liabilities		187,311				190,739
Stockholders’ Equity:
Preferred stock		—				—
Class A common stock		2				2
Additional paid-in capital		1,527,351				1,527,778
Accumulated deficit		(1,320,427	)			(1,300,188	)
Accumulated other comprehensive income		291				425
Total stockholders’ equity		207,217				228,017
Total liabilities and stockholders’ equity	$	394,528			$	418,756

(1)	Other assets includes $987 thousand of restricted cash as of both March 31, 2024 and December 31, 2023.

GeneDx Holdings Corp. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except share and per share amounts)
	Three months ended March 31,
	2024				2023
Revenue
Diagnostic test revenue	$	61,104			$	41,850
Other revenue		1,318				1,289
Total revenue		62,422				43,139
Cost of services		25,011				27,903
Gross profit		37,411				15,236
Research and development		11,567				14,592
Selling and marketing		16,085				13,452
General and administrative		22,445				43,689
Impairment loss		—				2,120
Other operating expenses, net		974				1,747
Loss from operations		(13,660	)			(60,364	)
Non-operating income (expenses), net
Change in fair value of warrants and earn-out contingent liabilities		(6,101	)			(3,453	)
Interest expense, net		(597	)			(35	)
Other income, net		37				2,716
Total non-operating loss, net		(6,661	)			(772	)
Loss before income taxes	$	(20,321	)		$	(61,136	)
Income tax benefit		82				147
Net loss	$	(20,239	)		$	(60,989	)
Weighted average shares outstanding of Class A common stock		26,062,170				20,061,945
Basic and diluted net loss per share, Class A common stock	$	(0.78	)		$	(3.04	)

GeneDx Holdings Corp. Condensed Consolidated Statements of Cash Flows (Unaudited) (in thousands)
	Three months ended March 31,
	2024				2023
Operating activities
Net loss	$	(20,239	)		$	(60,989	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		5,248				8,636
Stock-based compensation expense		(451	)			48
Change in fair value of warrants and contingent liabilities		6,101				3,453
Deferred tax benefit		(82	)			(147	)
Provision for excess and obsolete inventory		40				—
Change in third party payor reserves		(193	)			(1,070	)
Gain on debt forgiveness		—				(2,750	)
Impairment loss		—				2,120
Other		846				274
Change in operating assets and liabilities:
Accounts receivable		4,220				9,723
Inventory		(2,877	)			1,331
Accounts payable and accrued expenses		(4,733	)			(13,400	)
Other assets and liabilities		(4,293	)			(2,789	)
Net cash used in operating activities		(16,413	)			(55,560	)
Investing activities
Purchases of property and equipment		(443	)			—
Purchases of marketable securities		(5,167	)			—
Proceeds from sales of marketable securities		598				—
Proceeds from maturities of marketable securities		5,855				—
Development of internal-use software assets		—				(462	)
Net cash provided by (used in) investing activities		843				(462	)
Financing activities
Proceeds from offerings, net of issuance costs		—				135,439
Exercise of stock options		24				266
Long-term debt principal payments		—				(2,000	)
Finance lease payoff and principal payments		(462	)			(1,047	)
Net cash (used in) provided by financing activities		(438	)			132,658
Net (decrease) increase in cash, cash equivalents and restricted cash		(16,008	)			76,636
Cash, cash equivalents and restricted cash, at beginning of period		100,668				138,303
Cash, cash equivalents and restricted cash, at end of period (1)	$	84,660			$	214,939
Supplemental disclosures of cash flow information
Cash paid for interest	$	2,019			$	583
Cash paid for taxes	$	300			$	104
Purchases of property and equipment in accounts payable and accrued expenses	$	36			$	1,073
Software development costs in accounts payable and accrued expenses	$	—			$	157

(1)	Cash, cash equivalents and restricted cash at March 31, 2024 excludes marketable securities of $29.2 million.