GeneDx Reports First Quarter 2024 Financial Results and Business Highlights


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.