- Covered lives increased to 126 million - Cash
runway through the third quarter of 2024
DermTech, Inc. (NASDAQ: DMTK) (“DermTech” or the “Company”), a
leader in precision dermatology enabled by a non-invasive skin
genomics platform, today reported its first-quarter 2023 financial
results.
“In the last few months, we had excellent overall progress with
payers and strong execution by our commercial organization,” said
John Dobak, M.D., CEO, DermTech. “We expanded coverage for the
DermTech Melanoma Test (DMT) by nearly 40 percent since the end of
2022. Payer momentum remains strong across a broad mix of large and
medium-sized regional payers, governmental payers, self-funded
employer alliances and independent technology assessment
organizations.”
Dr. Dobak continued, “We continue to see healthy signs for
steadily improving average selling price (ASP) due to our recent
increase in covered lives. We believe anchoring our effort around
monetizing our already significant demand is the best way to reach
a revenue inflection point and preserve our cash runway. We expect
DMT volume to be roughly flat this year as we’ve shifted our focus
to monetizing existing demand by increasing our proportion of
reimbursed billable samples.”
Dr. Dobak concluded, “Prudently deploying our capital is a key
priority as we push for additional savings in our cash expenses.
Considering our adjusted operating plan and ability to access
capital, we expect our cash runway to take us through the third
quarter of 2024.”
First-Quarter 2023 Financial Results
- Billable sample volume grew 24 percent from the first quarter
of 2022 to approximately 17,800.
- Test revenue was $3.4 million, down 3 percent from the first
quarter of 2022, primarily due to changes in collection estimates
for tests run in prior periods.
- Total revenue was $3.5 million, a 6 percent decrease from the
first quarter of 2022, driven by lower contract revenue.
- Cost of test revenue was $3.8 million, a 7 percent increase
from the first quarter of 2022, yielding a test gross margin of
negative 11 percent, compared to 0 percent for the first quarter of
2022.
- Sales and marketing expenses were $15.4 million, roughly flat
versus the first quarter of 2022.
- Research and development expenses were $4.4 million, a 30
percent decrease from the first quarter of 2022, largely due to
lower employee-related and lab costs.
- General and administrative expenses were $11.9 million, a 39
percent increase from the first quarter of 2022. The increase was
driven by higher infrastructure costs due to the Company’s new
facility and higher employee-related expenses.
- Net loss was $31.3 million, or ($1.02) per share, which
included $4.7 million of non-cash stock-based compensation expense,
as compared to $30.1 million, or ($1.01) per share, for the first
quarter of 2022, which included $3.9 million of non-cash
stock-based compensation expense.
- Cash, cash equivalents, restricted cash and short-term
marketable securities were $108.4 million as of March 31, 2023.
DermTech believes it has sufficient cash resources to fund its
planned operations through the third quarter of 2024.
Other Business Highlights
- In March 2023, the Company presented four new posters at the
2023 American Academy of Dermatology (AAD) Annual Meeting. The four
new posters included data on the development of a basal cell
carcinoma diagnostic gene signature and evaluation of the DMT in
higher Fitzpatrick Skin Types. The posters were titled:
- Non-invasive detection of RNAs associated with basal cell
carcinoma. Bahrami-Samani et al.
- Pigmented lesion assay performance in Fitzpatrick Phototypes
IV-VI. Rock et al.
- Fitzpatrick Skin Phototypes: More than just skin deep. Xayavong
et al.
- An analysis of the average age of skin cancer reported by
subjects with Fitzpatrick Phototypes I through VI. Herron et
al.
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, May 4, 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 platform. 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
non-invasively using our Smart Stickers™. DermTech markets and
develops products that facilitate the early detection of skin
cancers and is developing products that assess inflammatory
diseases and customize drug treatments. 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,”
"outlook," “anticipate,” “intend,” “plan,” “may,” “will,” “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, DermTech’s positioning and
potential growth, financial outlook and future financial
performance, ability to monetize existing demand by increasing its
proportion of reimbursed billable samples, ability to maintain or
improve its operating efficiency and reduce operating expenses, the
sufficiency of DermTech’s cash resources and runway and ability to
access capital to fund its operating plan, implications and
interpretations of any study results, expectations regarding
agreements with or reimbursement or cash collection patterns from
Medicare, government payers or commercial payers and related
billing practices or number of covered lives, DermTech’s ability to
expand its product offerings and develop pipeline products, and
expectations regarding the search for, transition to and future
contributions of a successor CEO. 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 Medicare, government payers 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 March
31,
2023
2022
Revenues:
Test revenue
$
3,425
$
3,518
Contract revenue
52
200
Total revenues
3,477
3,718
Cost of revenues:
Cost of test revenue
3,791
3,530
Cost of contract revenue
30
24
Total cost of revenues
3,821
3,554
Gross (loss) profit
(344
)
164
Operating expenses:
Sales and marketing
15,417
15,443
Research and development
4,409
6,338
General and administrative
11,875
8,574
Total operating expenses
31,701
30,355
Loss from operations
(32,045
)
(30,191
)
Other income/(expense):
Interest income, net
782
66
Change in fair value of warrant
liability
(7
)
17
Total other income
775
83
Net loss
$
(31,270
)
$
(30,108
)
Weighted average shares outstanding used
in computing net loss per share, basic and diluted
30,557,216
29,836,072
Net loss per share of common stock
outstanding, basic and diluted
$
(1.02
)
$
(1.01
)
DERMTECH, INC.
Condensed Consolidated Balance
Sheets
(in thousands, except share
and per share data)
(Unaudited)
March 31, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
48,438
$
77,757
Short-term marketable securities
56,340
48,411
Accounts receivable
3,690
4,172
Inventory
1,574
1,757
Prepaid expenses and other current
assets
2,348
3,940
Total current assets
112,390
136,037
Property and equipment, net
6,262
6,375
Operating lease right-of-use assets
54,800
56,007
Restricted cash
3,501
3,488
Other assets
168
168
Total assets
$
177,121
$
202,075
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
1,680
$
2,419
Accrued compensation
7,556
7,894
Accrued liabilities
4,807
3,464
Short-term deferred revenue
242
109
Current portion of operating lease
liabilities
1,756
1,634
Current portion of finance lease
obligations
97
116
Total current liabilities
16,138
15,636
Warrant liability
12
5
Long-term finance lease obligations, less
current portion
49
53
Operating lease liabilities, long-term
53,680
54,028
Total liabilities
69,879
69,722
Stockholders’ equity:
Common stock, $0.0001 par value per share;
50,000,000 shares authorized as of March 31, 2023 and December 31,
2022; 31,088,911 and 30,297,408 shares issued and outstanding at
March 31, 2023 and December 31, 2022, respectively
3
3
Additional paid-in capital
461,845
456,171
Accumulated other comprehensive loss
(289
)
(774
)
Accumulated deficit
(354,317
)
(323,047
)
Total stockholders’ equity
107,242
132,353
Total liabilities and stockholders’
equity
$
177,121
$
202,075
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005970/en/
Steve Kunszabo DermTech (858) 291-1647
steve.kunszabo@dermtech.com
DermTech (NASDAQ:DMTK)
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