NantHealth lost $42M in Q3
NantHealth, a personalized healthcare company, lost more than $42.4 million in the third quarter compared to a $36.9 million loss in the third quarter of last year.
The company sold its provider/patient engagement assets to Allscripts in August and also laid off 300 employees over the summer. At the time, NantHealth said the sale, staff cuts and consolidation would save the company $70 million annually.
The Culver City, California-based company, which is part of NantWorks, founded by Dr. Patrick Soon-Shiong, pointed to its provider/patient engagement assets sale to Allscripts and subsequent layoffs and restructuring as factors for losing money in the third quarter.
“The restructuring was implemented during the third quarter, resulting only in a partial benefit for this quarter’s report. But going forward, we expect to see even lower operating expenses and greater efficiencies,” Soon-Shiong said during the earnings call.
Soon-Shiong has been at the center of a number of controversies recently. Earlier this month, Politico reported that sales increases for his GPS genetic test have been linked to doctors who have financial ties to his organizations. Politico has also reported on a pattern of recipients of Soon-Shiong's charitable gifts later buying his products.
The company’s net revenue increased 5% to $21.8 million from $20.7 million last year. Patrick Holt, chief financial officer of NantHealth, said during the earnings call that the increase is primarily due to growth in GPS Cancer revenue and “payer engagement and clinical decision support solutions.” This was partially offset by reductions in software and hardware and other services revenue associated with our connected care solutions, Holt said.
NantHealth said GPS revenue jumped 128% compared to the previous quarter and GPS commercial tests increased by 44% compared to the second quarter. “During the quarter, we made excellent progress on the plan to focus our business on core competencies, enhanced efficiencies and accelerate toward profitability,” said Ron Louks, chief operating officer of NantHealth.
In addition to suffering a loss in the third quarter, NantHealth reported that its cash or cash equivalent dropped from $157.57 million at the end of 2016 to just under $73.5 million at the close of the third quarter.
The third-quarter results (increased revenue, but overall losses) were similar to second-quarter results. NantHealth's revenue increased 17% to $26.2 million in the second quarter compared to the previous quarter. However, through the first six months of the year, the company experienced a net loss of $111.2 million, which was worse than the $87.3 million net loss during the first six months of 2016.