Since mid-June, IDXG has been hovering between $0.875 and $1.00, and today, it took off hitting a high of $1.13 and closing at $1.09.
Interpace Diagnostics Group Inc. (NASDAQ:IDXG) released its Q2 earnings last week, and it appears investors are picking up the news.
It clearly helps that Maxim initiated a buy rating on IDXG today with a price target of $5.00 bolstering investor confidence.
Could this move be the beginning of a gap fill that could bring IDXG back up to $1.50 where it was in mid-June?
NASDAQ:IDXG Latest Earnings
Here’s a summary of IDXG’s latest results from its Q2 earnings announcement (see full press release):
- Net Revenue Grew 7% Over the Prior Year Comparable Quarter and 11% Over the First Quarter of 2017
- Raised Over $22 Million in Capital in Past 6 Months
- Eliminated All Long Term Debt and Related Royalties and Milestones
- Cash on Hand in Excess of $14 Million
- Stockholders’ Equity Grew to in Excess of $36 Million at June 30, 2017
- ThyGenX® Now Covered by CIGNA
Q2 and Year to Date 2017 Financial Performance
- Net Revenue for the three-month period ended June 30, 2017 and for the six-month period was $3.9 million and $7.3 million, an increase of 7% over the same prior year period and 11% over the first quarter of 2017.
- Year to date Total Operating Expenses were $3.6 million, a reduction of $6.7 million from the prior year due to a Change in Fair Value of Contingent Consideration related to conversion of our then outstanding long term debt to equity and termination of future related royalties and milestone obligations.
- Total Operating Expenses for the 2017 second quarter increased to $5.6 million, an increase of $.9 million compared to the same quarter of 2016 due principally to increased General & Administrative costs in 2017 as we began to strategically rebuild our operations from the deep cost reductions required in 2016 as well as professional fees related to multiple equity offerings and debt/equity exchanges that we successfully closed during the first half of 2017.
- Year to date the Loss from Continuing Operations for the six months ended June 30, 2017 was $4.4 million compared to $7.5 million for the six months ended June 30, 2016. Included in the Loss from Continuing Operations in the 2017 second quarter is a $2.7 million Loss on Extinguishment of Debt and $4.3 million year to date in 2017. Also included in the 2017 year to date Loss from Continuing Operations is a $5.8 million benefit due to a Change in Fair Value of Contingent Consideration.
- Loss from Continuing Operations for the quarter ended June 30, 2017 was $6.3 million as compared to $3.5 million for the second quarter of 2016.
- Total Assets year to date grew by approximately $12 million while at the same time total liabilities were reduced by over $17 million, a 51% improvement since year-end.
- Cash balances year to date improved to over $14 million at the end of the 2017 second quarter.
- Net Cash Used in Operations year to date 2017 was $8.6 million as compared to $5.3 million for the comparable period of 2016. Included in Net Cash Used in Operations year to date 2017 is over $3 million of expenditures related to discontinued operations, transaction fees and the remainder of payment obligation carried over from the CSO business we sold in 2015.
- Net Cash Used in Operations for the second quarter of 2017 amounted to $4.4 million as compared to $1.3 million for the same quarter in 2016. Included in Net Cash Used in Operations in the second quarter of 2017 was approximately $0.7 million of expenditures related to discontinued operations, transaction fees and the remainder of payment obligations carried over from the contract sales organization (CSO).
- Total stockholders’ equity grew by over $29 million to $36.3 million since year-end 2016.
Adjusted EBITDA (in the attached schedule), which we believe is a meaningful supplemental disclosure that may be indicative of how management and our Board of Directors evaluate Company performance, adjusts Income or Loss from Continuing Operations for non-cash charges such as depreciation & amortization, asset impairment, loss on extinguishment, and the change in fair value of contingent consideration. Accordingly, our Adjusted EBITDA for the six months ended June 30, 2017 and 2016 was $(3.6) million and $(4.2) million respectively due primarily to the reduction in Loss from Continuing Operations. Adjusted EBITDA for the three-month periods ended June 30, 2017 and 2016 was $(2.5) million and $(1.7) million, respectively.
Second Quarter 2017 and Recent Business Highlights
- In April 2017 announced that UnitedHealthcare, the largest health plan in the United States, has agreed to cover Interpace’s ThyraMIR test for all of United’s members nationwide. Interpace’s ThyGenX and ThyraMIR thyroid assays are now covered for approximately 275 million patients nationwide.
- In April 2017 we also announced a laboratory services agreement with Cedar Sinai Medical Center of Los Angeles for our two thyroid assays.
- In May 2017 six abstracts related to PancraGEN were accepted and presented as posters at the Digestive Disease Week (DDW) meeting being held May 6th-9th, 2017 in Chicago, Illinois.
- In June 2017 we announced national contract approval with AETNA for our thyroid assays. AETNA is the third largest health plan in the US with over 44 million members.
- In May we announced that Anthem, the second largest health plan in the US and the largest Blue Cross Blue Shield plan in the country agreed to cover ThyraMIR for its 75 million members.
- In June 2017 we entered into an agreement with a major Healthcare system in Philadelphia for our two molecular tests for indeterminate thyroid nodules, ThyGenX and ThyraMIR.
- In June 2017 we also announced coverage by LifeWise, a regional plan in Washington State and Premea Blue Cross to cover ThyraMIR.
- In July 2017 we announced that CIGNA, one of the largest national health plans in the US, agreed to cover our ThyGenX test for CIGNA’s 15 million members nationwide.
- In July 2017 we also announced formal launch of the TERT marker of aggressiveness in our thyroid test at the World Congress of Thyroid Cancer.
IDXG’s Q2 results show that it’s executing strongly on both its financial and business operations.
Investors may realize there’s opportunity here as IDXG has eliminated all debt and various royalties.
Net revenue is growing as well and with stockholder equity in excess of $36MM and a market cap currently at $20.8M, there exists a strong potential for a move to the upside.
Combine these fundamentals with Maxim’s $5 price target, and IDXG becomes a stock that’s worth watching in the near term.
Disclosure: We have no position in IDXG and have not been compensated for this article.
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