Interpace Biosciences, Inc.

Third-quarter 2020 net revenue was $8.2 million, up 7% from $7.7 million in Q3 2019 and up 52% from Q2 2020. Year-to-date net revenue was $22.8 million, up 14% year over year. Gross profit was $3.1 million and gross margin was 37%, versus $2.9 million and 37% in Q3 2019. Third-quarter operating expense was $9.1 million, down from $10 million in Q3 2019 but up from $7.4 million in Q2 2020. Adjusted EBITDA loss was $2.9 million. Management guided to Q4 net revenue of $9 million to $10 million. The company also said it had $6.1 million of cash net of restricted cash as of January 15 and that it used $12.4 million in cash from operating activities in the first nine months of 2020.

Thomas Burnell said the company is focused on positioning Interpace to achieve cash flow breakeven in 2021 by growing diagnostics, growing biopharma services in North Carolina, and aligning resources around those lab operations. He described the business as a quality-driven, technology-based commercial organization and emphasized that the company is working with the Board to evaluate capital options while also improving operational efficiency and integrating services. His tone was cautious but constructive, highlighting improving trends in Q3 and Q4 despite COVID, reimbursement, and accounting issues.

Fred Knechtel said Q3 revenue growth came from higher molecular test volume, better reimbursement, and the ThyraMIR price increase, while pharma services remained under pressure. He noted gross profit of $3.1 million at a 37% margin, operating expense of $9.1 million, and an adjusted EBITDA loss of $2.9 million; he also cited $1.1 million of nonrecurring expense tied to the billing investigation and pharma lab transition. On liquidity, he said the company closed a $5 million secured bridge loan on January 7, ended the SBB revolver with no availability, held $6.1 million of cash net of restricted cash as of January 15, and burned $12.4 million in operating cash in the first nine months of 2020. He also disclosed negative stockholders' equity of $21.8 million and said the company is exploring options to restore compliance with Nasdaq's $2.5 million minimum equity requirement.

In Q&A, analysts asked about 2021 strategy, segment priorities, and catalysts. Management said the goal is to reach cash flow breakeven through growth in diagnostics and biopharma services, plus a more efficient lab footprint. On priorities, Fred Knechtel pointed to diagnostics as the nearer-term driver, citing the ThyGeNEXT price increase to $2,900, continued strength in PancraGEN reimbursement, and better Medicare Advantage pull-through, while saying pharma services should grow later in the year but is still challenged near term by COVID-related participation and backlog timing.