GeneDx Makes Cash Burn Progress in 3Q23 With Goal of Profitability by 2025, However, 4Q Guidance Implies Step Backwards
10-31-23 (by: Scott Gleason) GeneDx Holdings Corp reported its financial results for the third quarter of 2023 with total revenue of $53.3 compared to consensus forecasts of $52.4 million. The company noted year-over-year growth in exome and genome test revenue of over 40% in the quarter.
The total number of tests in the third quarter of 2023 approached 58,000, increasing 28% compared to nearly 45,000 in the third quarter of 2022. Test ASP in the quarter was $874 vs. $1,051 last year. Despite the decline in test ASP, the adjusted gross margin from continuing operations expanded to 48% in the third quarter of 2023, notably increasing from 37% in the second quarter of 2023.
On a broader scale, the company’s total cash position, including cash, cash equivalents, marketable securities, and restricted cash, stood at $115 million as of September 30, 2023. The company managed to reduce cash burn by 51% year-over-year and 21% sequentially for the third quarter to $41 million in cash used from operations. The cash burn of for the third quarter included the final payments to discharge legacy Sema4 operating payables and severance payments. Excluding these items, the cash burn for continuing operations was $25 million in the third quarter of 2023. While this is substantial progress, the company needs to continue to make progress in coming quarters given its liquidity position. The company has enacted a plan to remove approximately $40 million in annual operating expenses looking ahead.
For the full year 2023, GeneDx has adjusted its guidance to expect revenues of $187-$192 million and the company believes it remains on course to achieve profitability in 2025. Previously the company had anticipated revenue for the full year of $205-$220 million. At the mid-point, the guidance implies revenue in the fourth quarter of only $44.4 million.
Katherine Stueland, President and Chief Executive Officer of GeneDx, expressed the company’s commitment to expanding exome and genome utilization and enhancing operational efficiency. She highlighted the positive results for the quarter, underlining the company’s strong growth trajectory and improved cash management.