|
|
|
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
|
Exhibit No.
|
Description
|
|
|
|
|
NantHealth, Inc.
|
|
|
|
|
|
Date:
|
May 9, 2018
|
By:
|
|
/s/ Paul Holt
|
|
|
|
|
Paul Holt
|
|
|
|
|
Chief Financial Officer
|
|
Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098
|
|
•
|
Total Q1 Revenue of $22.3 Million, Up 17% from $19.1 Million in Prior Year Q1
|
•
|
Total Gross Margin increased to 50% in Q1, Up from 40% in Prior Year Q1
|
•
|
Study Results Demonstrating Benefits of Performing Tumor/Normal DNA and RNA Sequencing Published in Peer-Reviewed Medical Journal, Oncotarget
|
•
|
GPS Revenue for Q1 Increases 65% from Prior Year Q1
|
◦
|
677 GPS Commercial Tests Ordered in Q1, Up 12% from Q4 2017
|
◦
|
GPS Tests Ordered Continued to Grow in Q1; February Largest Month of Orders to Date
|
•
|
Restructuring Plan and Sale
of Provider/Patient Engagement Solutions Business Continued to Reduce Operating Loss
|
•
|
Expanded GPS Product Portfolio:
GPS
product portfolio expanded to include proprietary blood-based tumor profiling services, with beta launch
of 26-analyte profiling test.
|
•
|
In-Vitro Diagnostic (IVD) Filing with FDA for circulating free DNA (cfDNA) Liquid Biopsy Platform:
In Q1 2018, the company submitted a medical device application with the FDA for its proprietary cfDNA liquid biopsy platform.
|
•
|
Commenced Beta Launch of GPS Ordering and Results Portal
enabling ordering physicians to electronically receive GPS results and request molecular tumor board and Medical Affairs consultations.
|
•
|
Test Growth:
The company reported 677 GPS Cancer® commercial tests were ordered in Q1 2018, up from 606 in Q4 2017.
|
•
|
Key Publication
: In Q2 2018, results of a company sponsored study were published in
Oncotarget
, a peer-reviewed bio-medical journal. The study results demonstrate the significant gains in accuracy by performing tumor/normal DNA and RNA sequencing and the risks associated with high error rates of tumor only sequencing.
https://nanthealth.com/Oncotarget Publication
|
•
|
New National GPS Cancer Payer:
In Q1 2018, as previously announced, the company signed a new GPS Cancer reimbursement contract with a large, national healthcare IT company.
|
•
|
New Lab Services Arrangement:
In Q1 2018, as previously announced, the company signed a laboratory services agreement with a 20+ facility hospital system for the availability of GPS Cancer testing to its patient community.
|
•
|
Expanded International Adoption:
In Q1 2018, as previously announced, the company signed a strategic reseller agreement with a partner in the United Kingdom for the provision of molecular analysis services for clinical studies and other research initiatives.
|
•
|
FDA Submission:
In Q1 2018, as previously announced, the company submitted a 510(k) premarket notification application to the FDA for tumor/normal DNA sequencing.
|
•
|
Payer Engagement (NaviNet):
|
◦
|
In Q1 2018, NantHealth’s industry leading Document Exchange solution was upgraded to include an enhanced document viewer and the ability for payers to tag and categorize documents.
|
◦
|
In Q1 2018, as previously announced, the company signed a three-year renewal contract with a total contract value of approximately $17 million.
|
•
|
Clinical Decision Support (Eviti):
|
◦
|
In Q1 2018, introduced new dual eligibility features, enabling payors to concurrently manage dual membership patients covered under Medicare and Medicaid, and drug shortage configuration features that provide improved management of high cost drugs.
|
•
|
Connected Care:
|
◦
|
In Q1 2018, released DeviceConX5.14 (MDE), the first MDI solution to adopt the Fast Healthcare Interoperability Resources (FHIR) standard.
|
◦
|
In Q1 2018, released VitalsConX2.1, with support for offline mode, enabling clinicians to continue nurse rounding when connectivity is lost and to submit data to the EMR once connectivity is restored.
|
◦
|
In Q2 2018, completed first CE Mark submission for the DeviceConX software platform.
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
46,390
|
|
|
$
|
61,660
|
|
Accounts receivable, net
|
14,701
|
|
|
11,491
|
|
||
Inventories
|
805
|
|
|
839
|
|
||
Deferred implementation costs
|
11
|
|
|
1,960
|
|
||
Related party receivables, net
|
643
|
|
|
585
|
|
||
Prepaid expenses and other current assets
|
6,995
|
|
|
5,358
|
|
||
Total current assets
|
69,545
|
|
|
81,893
|
|
||
Property, plant, and equipment, net
|
23,570
|
|
|
18,517
|
|
||
Deferred implementation costs, net of current
|
2
|
|
|
3,951
|
|
||
Goodwill
|
115,930
|
|
|
114,625
|
|
||
Intangible assets, net
|
71,626
|
|
|
69,424
|
|
||
Investment in related party
|
145,169
|
|
|
156,863
|
|
||
Related party receivable, net of current
|
1,706
|
|
|
1,727
|
|
||
Other assets
|
3,777
|
|
|
2,195
|
|
||
Total assets
|
$
|
431,325
|
|
|
$
|
449,195
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
5,149
|
|
|
$
|
3,164
|
|
Accrued and other current liabilities
|
12,413
|
|
|
18,134
|
|
||
Deferred revenue
|
13,080
|
|
|
10,057
|
|
||
Related party payables, net
|
5,973
|
|
|
4,504
|
|
||
Total current liabilities
|
36,615
|
|
|
35,859
|
|
||
Deferred revenue, net of current
|
8,729
|
|
|
7,126
|
|
||
Related party liabilities
|
13,029
|
|
|
11,500
|
|
||
Related party promissory note
|
112,666
|
|
|
112,666
|
|
||
Related party convertible note, net
|
8,049
|
|
|
7,947
|
|
||
Convertible notes, net
|
75,937
|
|
|
74,845
|
|
||
Other liabilities
|
5,262
|
|
|
5,950
|
|
||
Total liabilities
|
260,287
|
|
|
255,893
|
|
||
|
|
|
|
||||
Stockholders' equity
|
|
|
|
||||
Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 108,591,946 and 108,383,602 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively (including 3,490 shares of restricted stock)
|
10
|
|
|
10
|
|
||
Additional paid-in capital
|
885,200
|
|
|
886,669
|
|
||
Accumulated deficit
|
(714,138
|
)
|
|
(693,233
|
)
|
||
Accumulated other comprehensive loss
|
(34
|
)
|
|
(144
|
)
|
||
Total stockholders' equity
|
171,038
|
|
|
193,302
|
|
||
Total liabilities and stockholders' equity
|
$
|
431,325
|
|
|
$
|
449,195
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Total net revenue
|
$
|
22,263
|
|
|
$
|
19,104
|
|
|
|
|
|
||||
Total cost of revenue
|
11,068
|
|
|
11,518
|
|
||
Gross profit
|
11,195
|
|
|
7,586
|
|
||
|
|
|
|
||||
Operating Expenses:
|
|
|
|
||||
Selling, general and administrative
|
20,737
|
|
|
17,435
|
|
||
Research and development
|
5,151
|
|
|
8,926
|
|
||
Amortization of acquisition-related assets
|
1,054
|
|
|
1,054
|
|
||
Total operating expenses
|
26,942
|
|
|
27,415
|
|
||
|
|
|
|
||||
Loss from operations
|
(15,747
|
)
|
|
(19,829
|
)
|
||
Interest expense, net
|
(4,197
|
)
|
|
(3,969
|
)
|
||
Other income, net
|
180
|
|
|
235
|
|
||
Loss from related party equity method investment
|
(3,261
|
)
|
|
(4,526
|
)
|
||
Loss from continuing operations before income taxes
|
(23,025
|
)
|
|
(28,089
|
)
|
||
(Benefit from) provision for income taxes
|
(1,050
|
)
|
|
37
|
|
||
Net loss from continuing operations
|
(21,975
|
)
|
|
(28,126
|
)
|
||
Loss from discontinued operations, net of tax
|
(193
|
)
|
|
(12,989
|
)
|
||
Net loss
|
$
|
(22,168
|
)
|
|
$
|
(41,115
|
)
|
|
|
|
|
||||
Net income (loss) per share:
|
|
|
|
||||
Continuing operations
|
|
|
|
||||
Basic and diluted - common stock
|
$
|
(0.20
|
)
|
|
$
|
(0.23
|
)
|
|
|
|
|
||||
Discontinued operations
|
|
|
|
||||
Basic and diluted - common stock
|
$
|
—
|
|
|
$
|
(0.11
|
)
|
|
|
|
|
||||
Total net income (loss) per share
|
|
|
|
||||
Basic and diluted - common stock
|
$
|
(0.20
|
)
|
|
$
|
(0.34
|
)
|
|
|
|
|
||||
Weighted average shares outstanding:
|
|
|
|
||||
Basic and diluted - common stock
|
108,579,271
|
|
|
121,618,039
|
|
|
Three Months Ended
March 31, |
||||||||||
|
As Reported
|
|
Adjustments due to ASC 606
1
|
|
Without new Revenue Standard
|
||||||
|
2018
|
|
|
|
2018
|
||||||
|
|
|
|
|
|
||||||
Total net revenue
|
22,263
|
|
|
(533
|
)
|
|
21,730
|
|
|||
|
|
|
|
|
|
||||||
Total cost of revenue
|
11,068
|
|
|
(37
|
)
|
|
11,031
|
|
|||
Gross profit
|
11,195
|
|
|
(496
|
)
|
|
10,699
|
|
|||
|
|
|
|
|
|
||||||
Operating Expenses:
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
20,737
|
|
|
470
|
|
|
21,207
|
|
|||
Research and development
|
5,151
|
|
|
—
|
|
|
5,151
|
|
|||
Amortization of acquisition-related assets
|
1,054
|
|
|
—
|
|
|
1,054
|
|
|||
Total operating expenses
|
26,942
|
|
|
470
|
|
|
27,412
|
|
|||
|
|
|
|
|
|
|
|||||
Loss from operations
|
(15,747
|
)
|
|
(966
|
)
|
|
(16,713
|
)
|
|||
Interest expense, net
|
(4,197
|
)
|
|
—
|
|
|
(4,197
|
)
|
|||
Other income, net
|
180
|
|
|
—
|
|
|
180
|
|
|||
Loss from related party equity method investment
|
(3,261
|
)
|
|
—
|
|
|
(3,261
|
)
|
|||
Loss from continuing operations before income taxes
|
(23,025
|
)
|
|
(966
|
)
|
|
(23,991
|
)
|
|||
(Benefit from) provision for income taxes
|
(1,050
|
)
|
|
(119
|
)
|
|
(1,169
|
)
|
|||
Net loss from continuing operations
|
(21,975
|
)
|
|
(847
|
)
|
|
(22,822
|
)
|
|||
Loss from discontinued operations, net of tax
|
(193
|
)
|
|
—
|
|
|
(193
|
)
|
|||
Net loss
|
$
|
(22,168
|
)
|
|
$
|
(847
|
)
|
|
$
|
(23,015
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per share:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
$
|
(0.20
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic and diluted - common stock
|
108,579,271
|
|
|
—
|
|
|
108,579,271
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
||||||
Revenue:
|
|
|
|
||||
Software-as-a-service related
|
$
|
16,166
|
|
|
$
|
14,797
|
|
Software and hardware related
|
1,455
|
|
|
598
|
|
||
Maintenance
|
2,446
|
|
|
2,019
|
|
||
Total software-related revenue
|
20,067
|
|
|
17,414
|
|
||
Sequencing and molecular analysis
|
840
|
|
|
510
|
|
||
Home health care services
|
1,356
|
|
|
1,180
|
|
||
Total net revenue
|
$
|
22,263
|
|
|
$
|
19,104
|
|
|
|
|
|
||||
Cost of Revenue:
|
|
|
|
||||
Software-as-a-service related
|
$
|
6,602
|
|
|
$
|
6,233
|
|
Software and hardware related
|
885
|
|
|
1,004
|
|
||
Maintenance
|
215
|
|
|
161
|
|
||
Amortization of developed technologies
|
1,173
|
|
|
1,743
|
|
||
Total software-related cost of revenue
|
8,875
|
|
|
9,141
|
|
||
Sequencing and molecular analysis
|
1,431
|
|
|
1,593
|
|
||
Home health care services
|
762
|
|
|
784
|
|
||
Total cost of revenue
|
$
|
11,068
|
|
|
$
|
11,518
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
||||||
Net loss from continuing operations
|
$
|
(21,975
|
)
|
|
$
|
(28,126
|
)
|
Adjustments to GAAP net loss:
|
|
|
|
||||
Loss from related party equity method investment including impairment loss
|
3,261
|
|
|
4,526
|
|
||
Stock-based compensation expense from continuing operations
|
2,718
|
|
|
250
|
|
||
Corporate restructuring from continuing operations
|
—
|
|
|
220
|
|
||
Acquisition related compensation expense
|
—
|
|
|
—
|
|
||
Acquisition related sales incentive
|
145
|
|
|
662
|
|
||
Change in fair value of derivatives liability
|
(1
|
)
|
|
(215
|
)
|
||
Non-cash interest expense related to convertible notes
|
1,194
|
|
|
1,051
|
|
||
Intangible amortization from continuing operations
|
2,227
|
|
|
2,797
|
|
||
Securities litigation costs
|
73
|
|
|
—
|
|
||
Tax benefit resulting from certain non-operating activity
|
(1,123
|
)
|
|
—
|
|
||
Total adjustments to GAAP net loss from continuing operations
|
8,494
|
|
|
9,291
|
|
||
Net loss - Non-GAAP from continuing operations
|
$
|
(13,481
|
)
|
|
$
|
(18,835
|
)
|
|
|
|
|
||||
Weighted average shares outstanding
|
108,579,271
|
|
|
121,618,039
|
|
||
|
|
|
|
||||
Net loss per share from continuing operations - Non-GAAP
|
$
|
(0.12
|
)
|
|
$
|
(0.15
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
||||
Net loss from continuing operations
|
$
|
(0.20
|
)
|
|
$
|
(0.23
|
)
|
Adjustments to GAAP net loss per common share from continuing operations:
|
|
|
|
||||
Loss from related party equity method investment including impairment loss
|
0.03
|
|
|
0.04
|
|
||
Stock-based compensation expense from continuing operations
|
0.03
|
|
|
—
|
|
||
Corporate restructuring from continuing operations
|
—
|
|
|
—
|
|
||
Acquisition related compensation expense
|
—
|
|
|
—
|
|
||
Acquisition related sales incentive
|
—
|
|
|
0.01
|
|
||
Change in fair value of derivatives liability
|
—
|
|
|
—
|
|
||
Non-cash interest expense related to convertible notes
|
0.01
|
|
|
0.01
|
|
||
Intangible amortization from continuing operations
|
0.02
|
|
|
0.02
|
|
||
Securities litigation costs
|
—
|
|
|
—
|
|
||
Tax benefit resulting from certain non-operating activity
|
(0.01
|
)
|
|
—
|
|
||
Total adjustments to GAAP net loss per common share from continuing operations
|
0.08
|
|
|
0.08
|
|
||
Net loss per common share from continuing operations - Non-GAAP
|
$
|
(0.12
|
)
|
|
$
|
(0.15
|
)
|