- Average selling price (ASP) for the DermTech
Melanoma Test (DMT) increased 24 percent year-over-year - Test
revenue increased 8 percent versus the third quarter of 2022 - Cash
runway into the first quarter of 2025
DermTech, Inc. (NASDAQ: DMTK) (DermTech or the Company), a
leader in precision dermatology enabled by a non-invasive skin
genomics technology, today reported its third-quarter 2023
financial results.
“We’re just a few months into our strategy of prioritizing
reimbursed tests and growing revenue and are seeing faster progress
than we expected,” said Bret Christensen, CEO, DermTech. “We
significantly improved many of our key performance indicators in
the third quarter. We grew ASP and test revenue on a year-over-year
and sequential basis. In addition, we expanded our Medicare
proportion of billable samples from 23 percent to a record high of
27 percent in the last two quarters and increased our proportion of
tests that are reimbursed.”
Christensen continued, “We believe monetizing our already
significant demand is the best way to reach a meaningful revenue
inflection point while managing our balance sheet. Our operating
expenses substantially declined in the third quarter even with
solid revenue growth, and excluding non-recurring costs related to
our restructuring actions, our net cash burn declined from
approximately $100 million for the full-year 2022 to approximately
$65 million annually based on the third quarter run rate – a 35
percent decrease. Overall, we believe revenue should grow
year-over-year in 2023 and our cash runway should extend into the
first quarter of 2025.”
Christensen concluded, “The powerful patient stories where we’ve
had a role in potentially saving a life are why we push ahead. The
patient need is great with approximately 200,000 new cases of
melanoma reported every year in the U.S. We’re confident there is a
place for our test in every dermatologic practice to aid in
clinician decision making and will carry forward our vision for the
DMT to be deployed universally as part of the melanoma care
pathway.”
Third-Quarter 2023 Financial Results
- Billable sample volume declined 13 percent from the third
quarter of 2022 to approximately 15,710.
- Test revenue was $3.7 million, up 8 percent from the third
quarter of 2022, primarily due to a higher ASP for the DMT.
- Total revenue was $3.9 million, a 10 percent increase from the
third quarter of 2022, driven by higher test revenue.
- Cost of test revenue was $3.7 million, a less than 1 percent
increase from the third quarter of 2022, yielding a test gross
margin of 1 percent, compared to negative 6 percent for the third
quarter of 2022. Cost of test revenue increased primarily because
of higher infrastructure costs related to the Company’s new
facility.
- Sales and marketing expenses were $8.1 million, a 44 percent
decrease from the third quarter of 2022. The decrease was primarily
attributable to lower employee-related and marketing
expenditures.
- Research and development expenses were $3.6 million, a 37
percent decrease from the third quarter of 2022, largely due to
lower employee-related and lab supplies costs.
- General and administrative expenses were $8.3 million, a 6
percent decrease from the third quarter of 2022. The decrease was
driven primarily by lower employee-related costs, offset by higher
infrastructure costs related to the Company's new facility.
- Net loss was $19.2 million, or ($0.57) per share, which
included $3.2 million of non-cash stock-based compensation expense,
as compared to $28.8 million, or ($0.96) per share, for the third
quarter of 2022, which included $4.9 million of non-cash
stock-based compensation expense.
- Cash, cash equivalents, restricted cash and short-term
marketable securities were $71.7 million as of September 30, 2023.
During the third quarter, the Company generated net proceeds of
approximately $0.5 million from the issuance of 302,598 shares of
common stock in at-the-market (ATM) offerings at a weighted average
price of $2.55 per share. DermTech believes it should have
sufficient cash resources to fund its planned operations into the
first quarter of 2025.
Conference Call Information
As previously announced, the Company will host a conference call
to discuss its results at 5:00 p.m. ET on Thursday, November 2,
2023. For participants interested in asking questions during the
teleconference, please register. After registering for the event, a
confirmation e-mail will be sent with a meeting invitation and
access information. Registration is open during the live
teleconference, but advance registration is advised. For
participants interested in listening only, please register for the
webcast. For those unable to participate in the live call and
webcast, a webcast replay will be available on the Company’s
website shortly after the conclusion of the call.
About DermTech
DermTech is a leading genomics company in dermatology and is
creating a new category of medicine, precision dermatology, enabled
by its non-invasive skin genomics technology. DermTech’s mission is
to improve the lives of millions by providing non-invasive
precision dermatology solutions that enable individualized care.
DermTech provides genomic analysis of skin samples collected using
its Smart StickersTM. DermTech develops and markets products that
facilitate the assessment of melanoma. For additional information,
please visit DermTech.
Forward-Looking Statements
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 DermTech may differ from its actual
results and consequently, you should not rely on these
forward-looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“runway,” "outlook," “anticipate,” “intend,” “plan,” “strive,”
“may,” “will,” “sustain,” “could,” “should,” “believe,” “predict,”
“potential,” “continue,” and similar expressions are intended to
identify such forward-looking statements. These forward-looking
statements include, without limitation, expectations and
evaluations with respect to: the performance, patient benefits,
cost- effectiveness, commercialization and adoption of DermTech’s
products and the market opportunity for these products;
expectations regarding DermTech’s potential growth, scale, patient
reach, financial outlook, including its cash runway and future
financial performance DermTech’s ability to increase its test
volume, revenue and the proportion of reimbursed billable tests and
control or reduce cost, expenses and cash burn; and expectations
regarding agreements with or reimbursement or cash collection
patterns from government payers (including Medicare) or commercial
payers and related billing practices or number of covered lives.
These forward-looking statements involve significant risks and
uncertainties that could cause the actual results to differ
materially from the expected results. Most of these factors are
outside of the control of DermTech and are difficult to predict.
Factors that may cause such differences include, but are not
limited to: (1) the outcome of any legal proceedings that may be
instituted against DermTech; (2) DermTech’s ability to obtain
additional funding to develop and market its products; (3) the
existence of favorable or unfavorable clinical guidelines for
DermTech’s tests; (4) the reimbursement of DermTech’s tests by
government payers (including Medicare) and commercial payers; (5)
the ability of patients or healthcare providers to obtain coverage
of or sufficient reimbursement for DermTech’s products; (6)
DermTech’s ability to grow, manage growth and retain its key
employees and maintain or improve its operating efficiency and
reduce operating expenses; (7) changes in applicable laws or
regulations; (8) the market adoption and demand for DermTech’s
products and services together with the possibility that DermTech
may be adversely affected by other economic, business, and/or
competitive factors; and (9) other risks and uncertainties included
in the “Risk Factors” section of the most recent Annual Report on
Form 10-K filed by DermTech with the Securities and Exchange
Commission (the “SEC”), and other documents filed or to be filed by
DermTech with the SEC, including subsequently filed reports.
DermTech cautions that the foregoing list of factors is not
exclusive. You should not place undue reliance upon any forward-
looking statements, which speak only as of the date made. DermTech
does not undertake or accept any obligation or undertaking to
release publicly any updates or revisions to any forward-looking
statements to reflect any change in its expectations or any change
in events, conditions, or circumstances on which any such statement
is based.
DERMTECH, INC.
Condensed Consolidated
Statements of Operations
(in thousands, except share
and per share data)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues:
Test revenue
$
3,692
$
3,433
$
10,682
$
11,098
Contract revenue
223
140
690
426
Total revenues
3,915
3,573
11,372
11,524
Cost of revenues:
Cost of test revenue
3,661
3,644
11,361
10,410
Cost of contract revenue
82
50
175
111
Total cost of revenues
3,743
3,694
11,536
10,521
Gross profit/(loss)
172
(121
)
(164
)
1,003
Operating expenses:
Sales and marketing
8,123
14,632
36,573
45,076
Research and development
3,595
5,702
11,891
18,955
General and administrative
8,264
8,806
35,359
26,258
Total operating expenses
19,982
29,140
83,823
90,289
Loss from operations
(19,810
)
(29,261
)
(83,987
)
(89,286
)
Other income:
Interest income, net
641
485
2,186
700
Change in fair value of warrant
liability
5
4
4
126
Total other income
646
489
2,190
826
Net loss
$
(19,164
)
$
(28,772
)
$
(81,797
)
$
(88,460
)
Weighted average shares outstanding used
in computing net loss per share, basic and diluted
33,835,370
30,096,261
32,073,448
29,969,435
Net loss per share of common stock
outstanding, basic and diluted
$
(0.57
)
$
(0.96
)
$
(2.55
)
$
(2.95
)
DERMTECH, INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share
and per share data) (Unaudited)
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
37,230
$
77,757
Short-term marketable securities
30,970
48,411
Accounts receivable
3,605
4,172
Inventory
1,196
1,757
Prepaid expenses and other current
assets
2,928
3,940
Total current assets
75,929
136,037
Property and equipment, net
5,611
6,375
Operating lease right-of-use assets
52,889
56,007
Restricted cash
3,467
3,488
Other assets
—
168
Total assets
$
137,896
$
202,075
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
1,703
$
2,419
Accrued compensation
5,773
7,894
Accrued liabilities
1,946
3,464
Short-term deferred revenue
236
109
Current portion of operating lease
liabilities
2,941
1,634
Current portion of finance lease
obligations
37
116
Total current liabilities
12,636
15,636
Warrant liability
1
5
Long-term finance lease obligations, less
current portion
42
53
Operating lease liabilities, long-term
52,153
54,028
Total liabilities
64,832
69,722
Stockholders’ equity:
Common stock, $0.0001 par value per share;
100,000,000 and 50,000,000 shares authorized as of September 30,
2023 and December 31, 2022, respectively; 34,241,523 and 30,297,408
shares issued and outstanding at September 30, 2023 and December
31, 2022, respectively
3
3
Additional paid-in capital
477,778
456,171
Accumulated other comprehensive
income/(loss)
127
(774
)
Accumulated deficit
(404,844
)
(323,047
)
Total stockholders’ equity
73,064
132,353
Total liabilities and stockholders’
equity
$
137,896
$
202,075
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102342448/en/
Steve Kunszabo DermTech (858) 291-1647
steve.kunszabo@dermtech.com
DermTech (NASDAQ:DMTK)
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