|
|
|
Delaware
|
|
001-37792
|
|
27-3019889
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer
Identification No.)
|
|
Item 2.02
|
Results of Operations and Financial Condition.
|
Item 9.01
|
Financial Statements and Exhibits
.
|
Exhibit No.
|
Description
|
99.1
|
Press Release dated November 7, 2016 announcing results for the quarter ended September 30, 2016.
|
|
|
|
NANTHEALTH, INC.
|
|
|
|
|
Date: November 7, 2016
|
By:
|
|
/s/ Paul Holt
|
|
|
|
Paul Holt
Chief Financial Officer
|
Exhibit No.
|
Description
|
99.1
|
Press Release dated November 7, 2016 announcing results for the quarter ended September 30, 2016.
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
Number of Oncologists Ordering GPS Cancer Increased from 85 in Q2 to 181 in Q3, Representing Patients from over 25 Different Health Plans, with 524 GPS Cancer Tests Ordered in Q3
|
•
|
With Seven Payer Contracts Executed and Upon Completion of the GPS Pilot Trial with Horizon Blue Cross Blue Shield New Jersey, the Number of Covered Cancer Lives Will Increase from 200,000 in Q2 to 320,000
|
•
|
Number 2 Market Share in Connected Care with 22,579 Device Connects Licenses Sold to Date with 18 EMRs Integrated Across 296 provider client sites
|
•
|
Acceleration of Payer Provider Engagement Engine with Increased Utilization of NaviNet Open from 60% of Physicians’ Offices in Q2 to 72% in Q3, Representing 647,000 Providers
|
•
|
Number of covered cancer lives:
at September 30, 2016 the number of patients with cancer covered by a payer for GPS testing was approximately 200,000. Subsequent to the end of the quarter, the company reported a coverage agreement with Horizon BCBS for a pilot study.
|
•
|
Number of GPS Cancer payers:
at September 30, 2016 the number of payers covering GPS Cancer was seven, representing 200,000 covered cancer lives. Discussions are in progress with 17 payers, increasing from 13 in Q2.
GPS Cancer Coverage
|
•
|
Number of international GPS Cancer payers:
Subsequent to the end of the third quarter, the company added an additional international reseller bringing the total of international resellers to two.
|
•
|
Number of GPS Cancer Tests:
524 ordered in Q3.
|
•
|
The company completed 40 go-live projects across NantOS and device connects
|
•
|
Four go-live projects completed on the NaviNet Open platform
|
•
|
First client go-live on NaviNet Document Exchange
|
•
|
Increased renewed or expanded contractual commitment from 25 to 35 current clients
|
•
|
In October, we announced that Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ) will cover the GPS Cancer test for its members enrolled in a pilot study across leading health systems in the mid-Atlantic. These institutions include the Hospital of University of Pennsylvania (HUP), Cancer Institute of New Jersey, Hackensack Medical Center, Meridian Hospital and Regional Cancer Care Associates LLC (RCCA), who will also utilize COTA, Inc.’s analytics solution to monitor and track differences in clinical outcomes and cost-analysis throughout these investigational efforts.
|
•
|
In September, we entered into an agreement with Children’s Hospital of Orange County (CHOC). CHOC, through its Hyundai Cancer Institute, to utilize GPS Cancer - the leading molecular test for personalized medicine, to generate, analyze and annotate the molecular profile characteristics of children, adolescents and young adults with rare, recurrent, or refractory tumors.
|
•
|
In September, Phoenix Children’s Hospital, one of the leading children’s hospitals nationwide and founding member of the Cancer MoonShot 2020 Pediatrics Consortium, entered into a commercial licensing agreement for NantHealth’s suite of precision medicine and healthcare IT solutions. These include GPS Cancer™, the eviti
®
oncology decision support platform and NantHealth’s patient engagement, care coordination and analytics solutions built on NantOS™, the industry’s leading cloud-based, healthcare platform.
|
•
|
In August, we entered into a commercial license agreement with Sanford Health, one of the largest health systems in the nation for the use of eviti®, the evidence-based treatment intelligence and web-based oncology decision support platform.
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
75,801
|
|
|
$
|
5,989
|
|
Marketable securities
|
—
|
|
|
1,243
|
|
||
Accounts receivable, net
|
12,928
|
|
|
11,472
|
|
||
Inventories
|
1,802
|
|
|
2,146
|
|
||
Deferred implementation costs
|
4,539
|
|
|
2,224
|
|
||
Related party receivables, net
|
882
|
|
|
1,245
|
|
||
Prepaid expenses and other current assets
|
5,803
|
|
|
8,707
|
|
||
Total current assets
|
101,755
|
|
|
33,026
|
|
||
Property, plant, and equipment, net
|
29,412
|
|
|
13,899
|
|
||
Deferred implementation costs, net of current
|
7,109
|
|
|
1,930
|
|
||
Goodwill
|
132,729
|
|
|
56,718
|
|
||
Intangible assets, net
|
124,645
|
|
|
54,971
|
|
||
Investment in related party
|
240,297
|
|
|
248,191
|
|
||
Related party receivable, net of current
|
1,987
|
|
|
1,300
|
|
||
Other assets
|
2,277
|
|
|
1,918
|
|
||
Total assets
|
$
|
640,211
|
|
|
$
|
411,953
|
|
|
|
|
|
||||
Liabilities and Stockholders' / Members' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
6,540
|
|
|
$
|
6,447
|
|
Accrued expenses
|
23,027
|
|
|
15,967
|
|
||
Deferred revenue
|
17,180
|
|
|
10,656
|
|
||
Related party payables, net
|
7,530
|
|
|
10,166
|
|
||
Total current liabilities
|
54,277
|
|
|
43,236
|
|
||
Deferred revenue, net of current
|
16,750
|
|
|
17,312
|
|
||
Related party interest payable
|
4,171
|
|
|
—
|
|
||
Related party promissory note
|
112,666
|
|
|
—
|
|
||
Other liabilities
|
1,208
|
|
|
358
|
|
||
Total liabilities
|
189,072
|
|
|
60,906
|
|
||
|
|
|
|
||||
Redeemable Series F units: 53,580,996 units issued and outstanding at December 31, 2015
|
—
|
|
|
166,042
|
|
||
|
|
|
|
||||
Stockholders' / members' equity
|
|
|
|
||||
Members' equity, 541,228,171 units issued and outstanding at December 31, 2015
|
—
|
|
|
476,263
|
|
||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 121,236,673 shares issued and outstanding at September 30, 2016
|
12
|
|
|
—
|
|
||
Additional paid-in capital
|
865,889
|
|
|
—
|
|
||
Accumulated deficit
|
(415,322
|
)
|
|
(291,171
|
)
|
||
Accumulated other comprehensive income (loss)
|
560
|
|
|
(87
|
)
|
||
Total stockholders' / members' equity
|
451,139
|
|
|
185,005
|
|
||
Total liabilities and stockholders' / members' equity
|
$
|
640,211
|
|
|
$
|
411,953
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Total Net Revenue
|
$
|
25,357
|
|
|
$
|
14,405
|
|
|
$
|
76,298
|
|
|
$
|
37,899
|
|
|
|
|
|
|
|
|
|
||||||||
Total Cost of Revenue
|
17,236
|
|
|
12,091
|
|
|
52,514
|
|
|
23,956
|
|
||||
Gross profit
|
8,121
|
|
|
2,314
|
|
|
23,784
|
|
|
13,943
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
24,715
|
|
|
18,147
|
|
|
99,336
|
|
|
52,386
|
|
||||
Research and development
|
13,855
|
|
|
7,027
|
|
|
48,871
|
|
|
16,677
|
|
||||
Amortization of software license and acquisition-related assets
|
1,814
|
|
|
760
|
|
|
5,442
|
|
|
782
|
|
||||
Total operating expenses
|
40,384
|
|
|
25,934
|
|
|
153,649
|
|
|
69,845
|
|
||||
Loss from operations
|
(32,263
|
)
|
|
(23,620
|
)
|
|
(129,865
|
)
|
|
(55,902
|
)
|
||||
Interest income (expense), net
|
(1,415
|
)
|
|
1
|
|
|
(4,671
|
)
|
|
(627
|
)
|
||||
Other income (expense), net
|
(336
|
)
|
|
662
|
|
|
(75
|
)
|
|
2,517
|
|
||||
Loss from related party equity method investment
|
(2,604
|
)
|
|
—
|
|
|
(7,893
|
)
|
|
(145
|
)
|
||||
Loss before income taxes
|
(36,618
|
)
|
|
(22,957
|
)
|
|
(142,504
|
)
|
|
(54,157
|
)
|
||||
Provision for (benefit from) income taxes
|
256
|
|
|
1
|
|
|
(18,353
|
)
|
|
2
|
|
||||
Net loss
|
$
|
(36,874
|
)
|
|
$
|
(22,958
|
)
|
|
$
|
(124,151
|
)
|
|
$
|
(54,159
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
$
|
(0.30
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(1.19
|
)
|
(2)
|
$
|
(0.62
|
)
|
Basic and diluted - redeemable common stock
|
N/A
|
|
|
N/A
|
|
|
$
|
0.74
|
|
|
N/A
|
|
|||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding (1):
|
|
|
|
|
|
|
|
||||||||
Basic and diluted - common stock
|
121,245,440
|
|
|
95,906,797
|
|
|
108,359,973
|
|
|
86,696,282
|
|
||||
Basic and diluted - redeemable common stock
|
N/A
|
|
|
N/A
|
|
|
6,686,653
|
|
|
N/A
|
|
1)
|
The net loss per share and weighted-average shares outstanding have been computed to give effect to the LLC Conversion that occurred on June 1, 2016, prior to the Company’s initial public offering ("IPO"). In conjunction with the LLC Conversion, (a) all of the Company’s outstanding units automatically converted into shares of common stock, based on the relative rights of the Company's pre-IPO equityholders as set forth in the Company's limited liability company agreement and (b) the Company adopted and filed a certificate of incorporation with the Secretary of State of the state of Delaware and adopted bylaws. The Company adopted and filed an amendment to its certificate of incorporation with the Secretary of State of the state of Delaware to effect a 1-for-5.5 reverse stock split of its common stock on June 1, 2016.
|
2)
|
The net loss per share for the common stock for the nine months ended September 30, 2016 reflects $4,958 in accretion value allocated to the redeemable common stock. The redeemable common stock contained a put right, which expired unexercised on June 20, 2016. As a result of and as of that date, the shares were no longer redeemable and were included in common stock.
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
2,391
|
|
|
$
|
4,493
|
|
|
$
|
7,214
|
|
|
$
|
12,196
|
|
Software–as-a-service
|
14,603
|
|
|
4,143
|
|
|
43,485
|
|
|
11,361
|
|
||||
Total software-related revenue
|
16,994
|
|
|
8,636
|
|
|
50,699
|
|
|
23,557
|
|
||||
Maintenance
|
3,204
|
|
|
2,897
|
|
|
10,854
|
|
|
7,937
|
|
||||
Sequencing and molecular analysis
|
77
|
|
|
75
|
|
|
122
|
|
|
75
|
|
||||
Other services
|
5,082
|
|
|
2,797
|
|
|
14,623
|
|
|
6,330
|
|
||||
Total net revenue
|
$
|
25,357
|
|
|
$
|
14,405
|
|
|
$
|
76,298
|
|
|
$
|
37,899
|
|
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Software and hardware
|
$
|
764
|
|
|
$
|
74
|
|
|
$
|
1,438
|
|
|
$
|
(297
|
)
|
Software-as-a-service
|
4,930
|
|
|
1,670
|
|
|
18,667
|
|
|
5,460
|
|
||||
Total software-related cost of revenue
|
5,694
|
|
|
1,744
|
|
|
20,105
|
|
|
5,163
|
|
||||
Maintenance
|
702
|
|
|
694
|
|
|
1,975
|
|
|
906
|
|
||||
Sequencing and molecular analysis
|
570
|
|
|
39
|
|
|
929
|
|
|
39
|
|
||||
Other services
|
6,564
|
|
|
6,725
|
|
|
17,621
|
|
|
10,402
|
|
||||
Amortization of developed technologies
|
3,706
|
|
|
2,889
|
|
|
11,884
|
|
|
7,446
|
|
||||
Total cost of revenue
|
$
|
17,236
|
|
|
$
|
12,091
|
|
|
$
|
52,514
|
|
|
$
|
23,956
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Loss before Income taxes
|
|
$
|
(36,618
|
)
|
|
$
|
(22,957
|
)
|
|
$
|
(142,504
|
)
|
|
$
|
(54,157
|
)
|
Adjustments to loss before income taxes:
|
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment
|
|
2,604
|
|
|
—
|
|
|
7,893
|
|
|
145
|
|
||||
Stock-based compensation expense
|
|
5,192
|
|
|
319
|
|
|
48,982
|
|
|
1,350
|
|
||||
Corporate restructuring
|
|
401
|
|
|
778
|
|
|
2,546
|
|
|
1,764
|
|
||||
Acquisition related compensation expense
|
|
—
|
|
|
—
|
|
|
4,814
|
|
|
—
|
|
||||
Sales incentive
|
|
567
|
|
|
—
|
|
|
2,027
|
|
|
—
|
|
||||
Intangible amortization
|
|
5,520
|
|
|
3,649
|
|
|
17,326
|
|
|
8,228
|
|
||||
Total adjustments to GAAP loss before provision for income taxes
|
|
14,284
|
|
|
4,746
|
|
|
83,588
|
|
|
11,487
|
|
||||
Provision from income taxes
|
|
93
|
|
|
1
|
|
|
398
|
|
|
2
|
|
||||
Net Loss - Non-GAAP
|
|
$
|
(22,427
|
)
|
|
$
|
(18,212
|
)
|
|
$
|
(59,314
|
)
|
|
$
|
(42,672
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Shares outstanding
|
|
121,245,440
|
|
|
95,906,797
|
|
|
108,359,973
|
|
|
86,696,282
|
|
||||
Series F redeemable stock
|
|
—
|
|
|
10,714,285
|
|
|
6,686,653
|
|
|
10,714,285
|
|
||||
Shares Outstanding - Non-GAAP
|
|
121,245,440
|
|
|
106,621,082
|
|
|
115,046,626
|
|
|
97,410,567
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share - Non-GAAP
|
|
$
|
(0.18
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(0.44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net loss per common share - GAAP
|
|
$
|
(0.30
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(1.19
|
)
|
|
$
|
(0.62
|
)
|
Adjustments to GAAP net loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Loss from related party equity method investment
|
|
0.02
|
|
|
—
|
|
|
0.07
|
|
|
—
|
|
||||
Stock-based compensation expense
|
|
0.04
|
|
|
—
|
|
|
0.45
|
|
|
0.02
|
|
||||
Corporate restructuring
|
|
—
|
|
|
0.01
|
|
|
0.02
|
|
|
0.02
|
|
||||
Acquisition related compensation expense
|
|
—
|
|
|
—
|
|
|
0.04
|
|
|
—
|
|
||||
Sales incentive
|
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Intangible amortization
|
|
0.06
|
|
|
0.04
|
|
|
0.16
|
|
|
0.09
|
|
||||
Income taxes
|
|
—
|
|
|
—
|
|
|
(0.17
|
)
|
|
—
|
|
||||
Accretion to redemption value of Series F/redeemable common stock
|
|
—
|
|
|
—
|
|
|
0.05
|
|
|
—
|
|
||||
Dilution from Series F/redeemable common stock
|
|
—
|
|
|
0.02
|
|
|
0.03
|
|
|
0.05
|
|
||||
Total adjustments to GAAP net loss per common share
|
|
0.12
|
|
|
0.07
|
|
|
0.67
|
|
|
0.18
|
|
||||
Net loss per share - Non-GAAP
|
|
$
|
(0.18
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(0.44
|
)
|
3)
|
Net loss - Non-GAAP excludes, among others, the effects of (1) loss from related party equity method investment, (2) stock based compensation expense, (3) intangible amortization, (4) corporate restructuring expenses, (5) acquisition related compensation expense, and (6) acquisition-related sales incentives, which have been recorded as contra revenue. Provision for income taxes excludes the impact of the conversion from a limited liability corporation to a corporation. Adjusted shares outstanding include Series F redeemable shares as if converted to common shares on January 1, 2015.
|