DermTech, Inc. Reports Fourth Quarter and Full Year 2019 Financial Results and Provides Corporate Update
Recent Corporate Updates
-
In
January 2020 , the Company contracted with a regional health plan to make its gene expression-based Pigmented Lesion Assay (the “DermTech PLA”) for the early detection of melanoma available to the regional health plan’s commercial and Medicare Advantage membership. -
In
February 2020 , the Company entered into a lease amendment to expand the size of its existing headquarter premises by approximately 13,300 square feet from approximately 15,355 square feet to approximately 28,655 square feet. The Company plans to use this additional lease space to expand lab operations for higher sample volume and efficiency, and to support the growth of all functions during the scale-up process. -
In
March 2020 , the Company announced that it entered into a securities purchase agreement with various investors, including multiple leading healthcare focused institutional investors and several existing stockholders, for the sale ofDermTech capital stock (the “Private Placement”). The Private Placement closed onMarch 4, 2020 and resulted in aggregate gross proceeds to the Company of$65.0 million . Management plans to use the funding for working capital and general corporate purposes, including to support commercialization of the DermTech PLA test and to advance pipeline efforts in other areas of precision dermatology. -
In
March 2020 , the Company announced that theJournal of Drugs and Dermatology published the results of a large registry study confirming the clinical utility of the DermTech PLA. The study also confirmed the value of the Company’s adhesive patch by demonstrating that community-based clinicians using the DermTech PLA were able to reduce unnecessary biopsies by up to 90%, lower healthcare costs and rule out melanoma via a genomics approach that elevates pigmented lesion management beyond what the eye can see.
Fourth Quarter Business Highlights
-
Received Medicare’s final local coverage determination for the DermTech PLA and payment set by Medicare at
$760 per test effectiveFebruary 10, 2020 . - Received patent that includes claims related to using expression levels of PRAME to identify melanoma in skin samples obtained via the company’s sample collection platform.
- Received an expert panel recommendation for the use of the DermTech PLA in cases in which patients present with atypical lesions requiring additional assessment beyond visual inspection in order to inform the decision to surgically biopsy.
- Completed approximately 25% enrollment in TRUST clinical study to further confirm the DermTech PLA’s high negative predictive value.
Fourth Quarter and Full Year 2019 Financial Highlights
-
In the fourth quarter of 2019,
DermTech reported assay revenue of$0.5 million , a 16% increase compared to the fourth quarter of 2018. Assay revenue for the full year 2019 was$1.4 million , a 10% increase compared to 2018. - Reported billable sample volume increase of 87% to 4,905 for the fourth quarter of 2019 compared to 2,628 for the same period in 2018. Billable sample volume for the full year 2019 was 13,714, a 24% increase compared to 2018.
-
In the fourth quarter of 2019, reported contract revenue of
$1.1 million , a 444% increase compared to the fourth quarter of 2018. Contract revenue for the full year 2019 was$2.0 million , a 69% increase compared to 2018. -
Ended 2019 with
$15.4 million in cash and cash equivalents.
“We are pleased with our billable sample volume growth for 2019, which is primarily due to the performance of our legacy sales managers and their ability to expand the Company’s customer base. We expect sample volume growth to continue as our new sales managers begin ramping up their productivity and as we hire additional salespeople. We anticipate our revenue growth to continue in 2020 due to our recent Medicare coverage and billing policy, and higher commercial payments under our new CPT code. As commercial payers begin to provide testing coverage following Medicare’s lead, we expect to monetize our growing billable sample volumes” said
Fourth Quarter and Full Year 2019 Financial Results
Assay revenue increased 16% to
Gross margin for the three months ended
Sales and marketing expense increased by 284% to
Research and development expense increased 48% to
General and administrative expense increased 171% to
Net loss for the three months ended
Cash and cash equivalents totaled
DermTech PLA Receives Medicare Coverage
In
Received Patent That Includes Claims Related to Using Expression Levels of PRAME
In
Inclusion in Clinical Management Recommendations
In
Enrollment Update of TRUST Clinical Study
The TRUST study is the first of its kind for the Company to provide repeat clinical assessments and genomic testing on pigmented lesions suspicious for melanoma that were initially tested negative with the DermTech PLA. This study will further confirm the high negative predictive value of the DermTech PLA (>99%), by examining the long-term clinical behavior of pigmented lesions initially determined to be negative for melanoma after testing with the DermTech PLA. The study will perform the repeat assessment and testing 1 to 2 years following the initial test. As of the end of the fourth quarter, we have completed approximately 25% of enrollment in the study.
About
Forward-looking Statement
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of
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Consolidated Balance Sheets |
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(in thousands, except share and per share data) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
15,374 |
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$ |
4,753 |
|
Accounts receivable, net |
|
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680 |
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580 |
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Inventory |
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35 |
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40 |
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Prepaid expenses and other current assets |
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1,061 |
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26 |
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Total current assets |
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17,150 |
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5,399 |
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Property and equipment, net |
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977 |
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215 |
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Other assets |
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84 |
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50 |
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Total assets |
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$ |
18,211 |
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$ |
5,664 |
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Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit) |
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Current liabilities: |
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Accounts payable |
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$ |
1,609 |
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$ |
286 |
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Accrued compensation |
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1,142 |
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|
480 |
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Accrued liabilities |
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218 |
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|
286 |
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Deferred revenue |
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|
1,390 |
|
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|
1,552 |
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Deferred underwriting fees |
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1,363 |
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— |
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Convertible notes payable, net |
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— |
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5,019 |
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Derivative liability |
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— |
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2,880 |
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Total current liabilities |
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5,722 |
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10,503 |
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Notes payable, noncurrent |
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— |
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516 |
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Total liabilities |
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5,722 |
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11,019 |
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Commitments and contingencies |
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Series A convertible preferred stock, |
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— |
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— |
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Series C convertible preferred stock, |
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— |
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— |
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Stockholders’ equity (deficit): |
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Common stock, |
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1 |
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1 |
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Additional paid-in capital |
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103,599 |
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66,021 |
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Accumulated deficit |
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(91,111 |
) |
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(71,377 |
) |
Total stockholders’ equity (deficit) |
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12,489 |
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(5,355 |
) |
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) |
$ |
18,211 |
$ |
5,664 |
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Consolidated Statements of Operations and Comprehensive Loss |
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(in thousands, except share and per share data) |
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Year Ended |
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2019 |
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2018 |
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Revenues: |
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Assay revenue |
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$ |
1,403 |
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$ |
1,281 |
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Contract revenue |
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1,961 |
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1,161 |
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Total revenues |
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3,364 |
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2,442 |
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Cost of revenues |
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3,304 |
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2,627 |
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Gross profit / (loss) |
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60 |
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(185 |
) |
Operating expenses: |
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Sales and marketing |
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6,303 |
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2,806 |
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Research and development |
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2,497 |
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2,054 |
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General and administrative |
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8,865 |
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3,515 |
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Total operating expenses |
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17,665 |
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8,375 |
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Loss from operations |
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(17,605 |
) |
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(8,560 |
) |
Other income (expense), net: |
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Gain on debt extinguishment |
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928 |
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— |
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Interest expense, net |
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(2,657 |
) |
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(1,093 |
) |
Other expense |
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(355 |
) |
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(351 |
) |
Total other income (expense), net |
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(2,084 |
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(1,444 |
) |
Net loss and comprehensive loss |
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$ |
(19,689 |
) |
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$ |
(10,004 |
) |
Weighted average shares outstanding used in computing net loss per share, basic and diluted |
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7,005,037 |
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4,410,913 |
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Net loss per common share outstanding, basic and diluted |
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$ |
(2.81 |
) |
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$ |
(2.27 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20200310005901/en/
Press and Media:
sdion@dermtech.com
(858) 450-4222
Investors:
caroline.corner@westwicke.com
(415) 202-5678
Source: