Sema4 Holdings Corp. (Nasdaq: SMFR) (“Sema4”), an AI-driven genomic
and clinical data intelligence platform company, today reported the
financial results for the third quarter ended September 30, 2021
and provided an update on key strategic and operational
initiatives.
“We continued to make significant progress this
quarter expanding our infrastructure while also building our
platform of algorithms. These activities will allow us to better
accommodate volume growth while increasing the resolution of data
that each sample provides,” said Eric Schadt, PhD, Founder and
Chief Executive Officer of Sema4. “The access to capital from our
public markets transition has allowed us to scale investments in
technology, infrastructure, and people, all with the aim to better
serve our current and future health system partners to enhance
patient care. It is early days in the journey and we exited the
quarter seeing accelerating growth and a broadening scope of
opportunity in front of us.”
Third Quarter & Recent
Highlights
- Diagnostic test volumes were up 36%
compared to the same period of 2020, with 69,895 tests resulted
during the third quarter of 2021 (excluding COVID-19 tests). This
includes 166% growth in Oncology and 33% growth in Women’s
Health.
- Revenue in the third quarter
increased 17% (excluding COVID-19 tests) compared to the same
period of 2020, resulting in total revenue of $43.2 million
compared to $38.6 million.
- Lab capacity and informatics
infrastructure continued to be built out, enabling significantly
higher volumes in support of deeper penetration of existing health
systems and onboarding of additional health systems.
- Announced a fourth health system
partnership, Avera Health, and the launch of a broad precision
medicine initiative to leverage Sema4’s health intelligence
platform to curate data and create predictive system-wide
modeling.
- Centrellis now contains over 11.9
million de-identified individual clinical records, including over
500,000 with matching clinical genomic profiles, making it one of
the largest known data set of this kind in the world.
- Launched Sema4 Elements™, our
portfolio of data science-driven products and services to support
reproductive and generational health.
- Published two papers in collaboration with the Icahn School of
Medicine at Mount Sinai focused on the prediction of Postpartum
Hemorrhage using Sema4 machine learning algorithms, derived from
large-scale, comprehensive real-world data, to predict clinical
outcomes and drive meaningful changes in the standard of care.
- Strengthened executive team by
adding a world-renowned expert in computational biology, Gustavo
Stolovitzky, as Chief Science Officer in September.
Third Quarter Financial
Results
Total revenue for the third quarter of 2021 was
$43.2 million, compared to $38.6 million in the third quarter of
2020. Revenue growth was driven primarily by an increase of volume
from Women’s Health and Oncology testing.
Cost of services was $58.8 million in the third
quarter of 2021, compared to $36.5 million in the same period of
2020. The increase was a result of expansion at our Stamford
clinical laboratory, increased headcount, investments in systems
and higher logistical and supply costs due to increased volumes in
our non-COVID business. We anticipate these new investments will
enable us to support continued volume growth with significantly
higher cost efficiencies over time.
Adjusted cost of service, which excludes
stock-based compensation expense was $55.1 million in the third
quarter of 2021, compared to $33.0 million in the same period of
2020.
Operating expenses for the third quarter of 2021
were $74.0 million, compared to operating expenses of $58.1 million
in the third quarter of 2020. The increase in operating expenses
was due in part to higher personnel-related costs as we build out
our laboratory operations and investment in our health intelligence
platform, as well as incremental public company expenses.
Adjusted operating expenses, which excludes
stock-based compensation and non-recurring transaction costs
associated with our go public process, for the third quarter of
2021 were $59.3 million, compared to $32.1 million in the same
period of 2020.
Net income for the third quarter of 2021 was
$31.4 million compared to a net loss of ($56.6) million for the
same period in 2020. Net income included other income of $122.2
million related to the change in fair market value of warrant and
earn-out contingent liabilities recorded in connection with the
merger with CM Life Sciences, Inc.
Total cash, including cash equivalents, was
$461.3 million as of September 30, 2021. As of November 8, 2021,
Sema4 had 241,261,362 outstanding shares of Class A common
stock.
“We are in growth mode and made a number of
investments in the quarter to capitalize on the current and future
opportunities for growth at Sema4,” said Isaac Ro, Chief Financial
Officer of Sema4. “We expect those investments to drive improved
financial performance in subsequent quarters with higher
reimbursement in our oncology portfolio, enhanced sales force
productivity, and greater efficiency in our lab operations.”
Full Year and Fourth Quarter 2021
Guidance
Sema4 expects full year 2021 total revenue to be
in the range of $201 million to $204 million. Fourth quarter
resulted volume is expected to be in the range of 73,000 to 79,000
tests (excluding COVID-19 tests). This range implies 20% to 30%
resulted volume growth (excluding COVID-19 tests) compared to the
fourth quarter of 2020 and 9% growth (excluding COVID-19) at the
midpoint compared to the third quarter of 2021.
These statements are forward-looking and actual
results may differ materially. Refer to the Forward-Looking
Statements safe harbor below for information on the factors that
could cause our actual results to differ materially from these
forward-looking statements.
Webcast and Conference Call
Details
Sema4 will host a conference call today,
November 15, 2021, at 4:30 p.m. Eastern Time. Interested parties
may access the live teleconference by dialing (844) 631-4065 for
domestic callers or (929) 517-0920 for international callers,
followed by conference ID: 4636627. A live and archived webcast of
the event will also be available on the “Events” section of the
Sema4 investor relations website at https://ir.sema4.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 long-term
goal for 2023 revenue, and our expectations for our growth and
future investment in our business. 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) the 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,
and (iii) the size and growth of the market in which we operate. In
particular, our ability to achieve our long-term goal for 2023
revenue is highly dependent on a number of variables, including our
ability to increase the number of billable tests and achieve
reimbursement for our tests from third-party payers, our ability to
successfully execute our technology and business development plans
and growth strategy, our ability to compete in rapidly developing
markets, our ability to demonstrate the clinical utility of and
continue to commercialize our platforms including Centrellis and
Traversa, and the continuation of favorable regulations affecting
the markets in which we operate. 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 Registration Statement on Form S-1 filed
with the U.S. Securities and Exchange Commission (the “SEC”) on
August 4, 2021 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. Furthermore, our long-term goal for 2023 revenue
should not be looked upon as “guidance” of any sort.
About Sema4
Sema4 is a patient-centered health intelligence
company dedicated to advancing healthcare through data-driven
insights. Sema4 is transforming healthcare by applying AI and
machine learning to multidimensional, longitudinal clinical and
genomic data to build dynamic models of human health and defining
optimal, individualized health trajectories. Centrellis®, our
innovative health intelligence platform, is enabling us to generate
a more complete understanding of disease and wellness and to
provide science-driven solutions to the most pressing medical
needs. Sema4 believes that patients should be treated as partners,
and that data should be shared for the benefit of all.
For more information, please visit sema4.com and
connect with Sema4 on Twitter, LinkedIn, Facebook and YouTube.
Investor Relations Contact:Joel
Kaufmaninvestors@sema4.com
Media Contact:Radley
Mossradley.moss@sema4.com
Sema4 Holdings
Corp.Condensed Balance Sheets(In
thousands, except per share amounts)
|
|
September 30,2021
(unaudited) |
|
December 31, 2020 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
461,276 |
|
|
$ |
108,132 |
|
Accounts receivable |
|
21,257 |
|
|
32,044 |
|
Due from related parties |
|
413 |
|
|
289 |
|
Inventory |
|
31,174 |
|
|
24,962 |
|
Prepaid expenses |
|
20,205 |
|
|
4,557 |
|
Other current assets |
|
4,186 |
|
|
4,124 |
|
Total current assets |
|
$ |
538,511 |
|
|
$ |
174,108 |
|
Property and equipment,
net |
|
60,333 |
|
|
63,110 |
|
Restricted cash |
|
900 |
|
|
10,828 |
|
Other assets |
|
3,613 |
|
|
3,596 |
|
Total assets |
|
$ |
603,357 |
|
|
$ |
251,642 |
|
|
|
|
|
|
Liabilities, Redeemable Convertible Preferred Stock and
Stockholders’ Equity (Deficit) |
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued
expenses |
|
$ |
43,079 |
|
|
$ |
38,591 |
|
Due to related parties |
|
1,425 |
|
|
1,425 |
|
Current contract
liabilities |
|
493 |
|
|
1,783 |
|
Other current liabilities |
|
26,369 |
|
|
31,643 |
|
Total current liabilities |
|
$ |
71,366 |
|
|
$ |
73,442 |
|
Long-term debt, net of current
portion |
|
11,000 |
|
|
18,971 |
|
Stock-based compensation
liabilities |
|
— |
|
|
131,989 |
|
Other liabilities |
|
21,699 |
|
|
22,852 |
|
Warrant liability |
|
46,629 |
|
|
— |
|
Earn-out contingent
liability |
|
61,400 |
|
|
— |
|
Total liabilities |
|
$ |
212,094 |
|
|
$ |
247,254 |
|
|
|
|
|
|
Commitments and contingencies
(Note 9) |
|
|
|
|
|
|
|
|
|
Redeemable convertible
preferred stock: |
|
|
|
|
Series A-1 redeemable
convertible preferred stock, $0.00001 par value: 0 and |
|
|
|
|
|
|
55,399,943 shares authorized, issued and outstanding at September
30, 2021 and December 31, 2020, respectively; aggregate liquidation
preference of $0 and $55,000 at September 30, 2021 and December 31,
2020, respectively |
|
— |
|
|
51,811 |
|
Series A-2 redeemable
convertible preferred stock, $0.00001 par value: 0 and |
|
|
|
|
|
|
64,718,940 shares authorized at September 30, 2021 and December 31,
2020, respectively; 0 and 49,700,364 shares authorized, issued and
outstanding at September 30, 2021 and December 31, 2020,
respectively; aggregate liquidation preference of $0 and $49,342 at
September 30, 2021 and December 31, 2020, respectively |
|
— |
|
|
46,480 |
|
Series B redeemable
convertible preferred stock, $0.00001 par value: 0 and
41,937,960 |
|
|
|
|
|
|
shares authorized, issued and outstanding at September 30, 2021 and
December 31,2020, respectively; aggregate liquidation preference of
$0 and $204,302 at September 30, 2021 and December 31, 2020,
respectively |
|
— |
|
|
118,824 |
|
Series C redeemable
convertible preferred stock, $0.00001 par value: 0 and
24,497,317 |
|
|
|
|
|
|
shares authorized at September 30, 2021 and December 31, 2020,
respectively; 0 and 24,496,946 shares issued and outstanding at
September 30, 2021 and December 31, 2020, respectively; aggregate
liquidation preference of $0 and $121,397 at September 30, 2021 and
December 31, 2020, respectively |
|
— |
|
|
117,324 |
|
Redeemable convertible
preferred stock |
|
— |
|
|
334,439 |
|
Stockholders’ equity
(deficit): |
|
|
|
|
Preferred Stock, $0.0001 par
value: 1,000,000 and 0 shares authorized at September |
|
|
|
|
|
|
30, 2021 and December 31, 2020, respectively; 0 shares issued and
outstanding at September 30, 2021 and December 31, 2020,
respectively |
|
— |
|
|
— |
|
Class A common stock: $0.0001
par value, 380,000,000 shares authorized, |
|
|
|
|
|
|
240,190,402 shares issued and outstanding at September 30, 2021 and
$0.00001 par value: 309,584,750 shares authorized, 124 shares
issued and outstanding at December 31, 2020 |
|
24 |
|
|
— |
|
Class B convertible common
stock, $0.00001 par value: 0 and 18,575,085 shares |
|
|
|
|
|
|
authorized at September 30, 2021 and December 31, 2020,
respectively; 0 and 130,557 shares issued and outstanding at
September 30, 2021 and December 31, 2020, respectively |
|
— |
|
|
— |
|
Additional paid-in
capital |
|
926,253 |
|
|
$ |
— |
|
Accumulated deficit |
|
(535,014 |
) |
|
(330,051 |
) |
Total stockholders’ equity
(deficit).............................................................................................................................................. |
|
391,263 |
|
|
(330,051 |
) |
Total liabilities, redeemable
convertible preferred stock and stockholders’ equity (deficit) |
|
$ |
603,357 |
|
|
$ |
251,642 |
|
Sema4 Holdings
Corp.Condensed Statements of Operations and
Comprehensive Loss(In thousands, except share
amounts)(Unaudited)
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Revenue |
|
|
|
|
|
|
|
|
Diagnostic test revenue (including related party |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
revenue of $20 and $86 for the three months ended September 30,
2021 and 2020, respectively and $90 and $186 for the nine months
ended September 30, 2021 and 2020, respectively) |
|
$ |
41,410 |
|
|
$ |
37,893 |
|
|
$ |
148,973 |
|
|
$ |
113,759 |
|
Other revenue (including
related party revenue of |
|
|
|
|
|
|
|
|
|
|
|
|
$65 and $0 for the three months ended September 30, 2021 and 2020,
respectively and $153 and $0 for the nine months ended September
30, 2021 and 2020,
respectively).................................................................................... |
|
1,768 |
|
|
715 |
|
|
5,421 |
|
|
1,606 |
|
Total revenue |
|
43,178 |
|
|
38,608 |
|
|
154,394 |
|
|
115,365 |
|
Cost of services (including
related party expenses of |
|
|
|
|
|
|
|
|
|
|
|
|
$656 and $452 for the three months ended September 30, 2021 and
2020, respectively and $1,942 and $1,485 for the nine months ended,
September 30, 2021 and 2020
respectively)........................................................................................ |
|
58,752 |
|
|
36,530 |
|
|
180,195 |
|
|
111,754 |
|
Gross (loss) profit |
|
(15,574 |
) |
|
2,078 |
|
|
(25,801 |
) |
|
3,611 |
|
Research and development |
|
17,831 |
|
|
19,083 |
|
|
82,916 |
|
|
41,540 |
|
Selling and marketing |
|
22,121 |
|
|
12,735 |
|
|
69,937 |
|
|
33,154 |
|
General and
administrative |
|
33,230 |
|
|
24,342 |
|
|
147,941 |
|
|
39,627 |
|
Related party expenses |
|
847 |
|
|
1,933 |
|
|
3,532 |
|
|
6,239 |
|
Loss from operations |
|
(89,603 |
) |
|
(56,015 |
) |
|
(330,127 |
) |
|
(116,949 |
) |
|
|
|
|
|
|
|
|
|
Other income (expense),
net: |
|
|
|
|
|
|
|
|
Change in fair market value of
warrant and earn-out contingent liabilities |
|
122,171 |
|
|
— |
|
|
122,171 |
|
|
— |
|
Interest income |
|
27 |
|
|
63 |
|
|
57 |
|
|
473 |
|
Interest expense |
|
(683 |
) |
|
(637 |
) |
|
(2,128 |
) |
|
(1,826 |
) |
Other income (expense),
net |
|
(520 |
) |
|
(26 |
) |
|
5,064 |
|
|
2,645 |
|
Total other income (expense),
net |
|
120,995 |
|
|
(600 |
) |
|
125,164 |
|
|
1,292 |
|
Income (loss) before income
taxes |
|
$ |
31,392 |
|
|
$ |
(56,615 |
) |
|
$ |
(204,963 |
) |
|
$ |
(115,657 |
) |
Income tax provision |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Net income (loss) and
comprehensive income (loss) |
|
$ |
31,392 |
|
|
$ |
(56,615 |
) |
|
$ |
(204,963 |
) |
|
$ |
(115,657 |
) |
Weighted average shares
outstanding of Class A common stock for basic earnings |
|
185,680,394 |
|
|
124 |
|
|
63,121,738 |
|
|
124 |
|
Weighted average shares
outstanding of Class A common stock for diluted earnings |
|
210,330,946 |
|
|
124 |
|
|
63,121,738 |
|
|
124 |
|
Basic net income (loss) per
share, Class A common stock |
|
$ |
0.17 |
|
|
$ |
(456,573 |
) |
|
$ |
(3.25 |
) |
|
$ |
(932,718 |
) |
Diluted net income (loss) per
share, Class A common stock |
|
$ |
0.15 |
|
|
$ |
(456,573 |
) |
|
$ |
(3.25 |
) |
|
$ |
(932,718 |
) |
Sema4 Holdings
Corp.Condensed Consolidated Statements of Cash
Flows(In thousands) (Unaudited)
|
|
Nine months ended September 30, |
|
|
2021 |
|
2020 |
Operating
activities |
|
|
|
|
Net loss |
|
$ |
(204,963 |
) |
|
$ |
(115,657 |
) |
|
|
|
|
|
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization
expense................................................................... |
|
16,012 |
|
|
8,147 |
|
Stock-based compensation
expense |
|
182,454 |
|
|
30,073 |
|
Change in fair value of
warrant and contingent liabilities |
|
(122,171 |
) |
|
— |
|
Provision for excess and
obsolete inventory |
|
1,122 |
|
|
— |
|
Non-cash lease expense |
|
1,174 |
|
|
2,203 |
|
Loss on extinguishment of
debt |
|
301 |
|
|
— |
|
Change in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
10,787 |
|
|
(3,159 |
) |
Inventory |
|
(7,334 |
) |
|
(8,105 |
) |
Prepaid expenses and other
current
assets........................................................................ |
|
(15,710 |
) |
|
516 |
|
Due to/from related
parties |
|
(124 |
) |
|
617 |
|
Other assets |
|
(17 |
) |
|
1,174 |
|
Accounts payable and accrued
expenses........................................................................... |
|
4,685 |
|
|
(537 |
) |
Contract liabilities |
|
(1,290 |
) |
|
(135 |
) |
Other current liabilities |
|
(3,375 |
) |
|
10,068 |
|
Net cash used in operating
activities......................................................................................... |
|
(138,449 |
) |
|
(74,795 |
) |
|
|
|
|
|
Investing
activities |
|
|
|
|
Purchases of property and
equipment
...................................................................................... |
|
(4,344 |
) |
|
(17,310 |
) |
Development of internal-use
software assets |
|
(8,749 |
) |
|
(3,165 |
) |
Net cash used in investing
activities......................................................................................... |
|
(13,093 |
) |
|
(20,475 |
) |
|
|
|
|
|
Financing
activities |
|
|
|
|
Proceeds from issuance of
Series C redeemable convertible preferred stock, net of issuance
costs |
|
— |
|
|
117,326 |
|
Proceeds from PIPE
issuance |
|
350,000 |
|
|
— |
|
Proceeds from equity infusion
from the merger, net of
redemptions..................................... |
|
442,684 |
|
|
— |
|
Legacy Sema4 Shareholder
payout |
|
(230,665 |
) |
|
— |
|
Payment of transaction
costs |
|
(51,760 |
) |
|
— |
|
Stock Appreciation Rights
payout |
|
(3,795 |
) |
|
— |
|
Repayment of long-term
debt |
|
(8,741 |
) |
|
— |
|
Capital lease principal
payments |
|
(2,960 |
) |
|
(3,384 |
) |
Long-term debt principal
payments |
|
(1,000 |
) |
|
— |
|
Proceeds from long-term
debt |
|
— |
|
|
6,000 |
|
Exercise of stock options |
|
995 |
|
|
— |
|
Net cash provided by financing
activities |
|
494,758 |
|
|
119,942 |
|
|
|
|
|
|
Net increase in cash, cash
equivalents and restricted cash |
|
343,216 |
|
|
24,672 |
|
Cash, cash equivalents and
restricted cash, at beginning of period |
|
118,960 |
|
|
115,006 |
|
Cash, cash equivalents and
restricted cash, at end of period |
|
$ |
462,176 |
|
|
$ |
139,678 |
|
|
|
|
|
|
Supplemental
disclosures of cash flow information |
|
|
|
|
Cash paid for interest |
|
$ |
2,128 |
|
|
$ |
1,826 |
|
Cash paid for taxes |
|
$ |
50 |
|
|
$ |
— |
|
Purchases of property and equipment in accounts payable and accrued
expenses |
|
$ |
193 |
|
|
$ |
268 |
|
Software development costs in
accounts payable and accrued expenses |
|
$ |
1,228 |
|
|
$ |
1,629 |
|
Assets acquired under capital
leases obligations |
|
$ |
641 |
|
|
$ |
5,637 |
|
Sema4 Holdings
Corp.Reconciliation of Revenue to our Adjusted
Gross Profit & Adjusted EBITDA (In thousands)
The following is a
reconciliation of revenue to our Adjusted Gross Profit and Adjusted
Gross Margin for the three months ended September 30, 2021 and
2020:
|
|
Three months ended September 30, |
|
|
2021 |
|
2020 |
|
|
(in thousands) |
Revenue |
|
$ |
43,178 |
|
|
|
$ |
38,608 |
|
Cost of
services |
|
58,752 |
|
|
|
36,530 |
|
Gross (Loss) Profit
|
|
(15,574 |
) |
|
|
2,078 |
|
Gross
Margin |
|
(36 |
) |
% |
|
5 |
% |
Add: |
|
|
|
|
Stock-based compensation
expense |
|
3,699 |
|
|
|
3,506 |
|
Adjusted Gross (Loss)
Profit
|
|
$ |
(11,875 |
) |
|
|
$ |
5,584 |
|
Adjusted Gross Margin
|
|
(28 |
) |
% |
|
14 |
% |
The following is a
reconciliation of our net loss to Adjusted EBITDA for the three
months ended September 30, 2021 and 2020:
|
|
Three months ended September 30, |
|
|
2021 |
|
2020 |
|
|
(in thousands) |
Net Income
(loss) |
|
$ |
31,392 |
|
|
$ |
(56,615 |
) |
Interest expense, net
(1) |
|
656 |
|
|
574 |
|
Depreciation and
amortization |
|
5,491 |
|
|
3,067 |
|
Stock-based compensation
expense |
|
18,011 |
|
|
29,453 |
|
Transaction costs
(2) |
|
391 |
|
|
— |
|
Change in fair market value of
warrant and earn-out contingent
liabilities (3) |
|
(122,171 |
) |
|
— |
|
Other (income) expense, net
(4) |
|
343 |
|
|
26 |
|
Adjusted
EBITDA |
|
$ |
(65,887 |
) |
|
$ |
(23,495 |
) |
_______________________(1) Represents
the total of Interest Expense related to our capital leases and
interest-bearing loans and Interest Income on money market
funds.(2) Represents professional
service costs incurred in connection with pursuing the Business
Combination transaction that did not meet the requirement for
capitalization.(3) For the three
months ended September 30, 2021, represents the change in fair
market value of the liabilities associated with our public warrants
and private placement warrants and the earn-out shares issuable
under the terms of the Merger
Agreement.(4) For the three
months ended September 30, 2021, consists primarily of penalties
related to early extinguishment of debt. |
Sema4 (NASDAQ:SMFRW)
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Sema4 (NASDAQ:SMFRW)
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