DermTech, Inc. (NASDAQ: DMTK) (“DermTech”), a leader in precision dermatology enabled by a non-invasive skin genomics platform, today reported unaudited financial results for the quarter ended June 30, 2021.
Second Quarter 2021 Highlights
- Billable sample volume of approximately 11,750 for the second quarter of 2021, a 267% increase compared to approximately 3,200 recorded for the second quarter of 2020 and a 25% sequential increase over the first quarter of 2021.
- Assay revenue of $2.9 million for the second quarter of 2021, a 349% increase compared to the second quarter of 2020 and a 33% sequential increase over the first quarter of 2021.
- Total revenue of $3.1 million for the second quarter of 2021, a 269% increase compared to the second quarter of 2020 and a 24% sequential increase over the first quarter of 2021.
- Achieved second consecutive full quarter with positive assay gross margin of 11% compared to negative 118% for the same period of 2020.
- Launched PLAplus, our next generation test for the enhanced early detection of melanoma, which adds TERT (“Telomerase Reverse Transcriptase”) promoter DNA driver mutation analyses to the current RNA gene expression based Pigmented Lesion Assay (“PLA” or the “DermTech Melanoma Test”). The combined tests elevate the sensitivity from 91% to 97% and maintain a negative predictive value of >99%, resulting in a less than 1% probability of missing melanoma.
- Released topline results from second economic study of the PLA in connection with an actuarial model developed by OptumInsight to evaluate the economic impact of inserting the PLA into the visual assessment and histopathology pathway for pigmented skin lesions clinically suspicious of melanoma.
- Cash, cash equivalents and short-term marketable securities were $268.3 million at the end of the quarter.
“DermTech continued to execute on its core business drivers during Q2 by delivering healthy sample volume and revenue growth as we began to emerge from the peak of the pandemic,” said John Dobak, M.D., chief executive officer of DermTech. “Our recent efforts to complete the sales force expansion planning, the start of our in-market beta testing of our telemedicine solution, DermTech ConnectTM, and the initiation of a couple of integrated primary network pilots, enables additional adoption of the DermTech Melanoma Test and lays the commercial foundation for future products and channel expansion.”
Second Quarter 2021 Financial Results
Assay revenue increased $2.3 million, or 349%, to $2.9 million for the three months ended June 30, 2021, compared to $0.6 million for the same period of 2020. Assay revenues grew $3.7 million, or 253%, to $5.1 million for the six months ended June 30, 2021 compared to $1.4 million for the same period of 2020. The increase in assay revenue was primarily due to higher billable sample volume and improved average selling price (“ASP”) resulting from better cash collections. Billable sample volume increased 267% to approximately 11,750 for the three months ended June 30, 2021, compared to approximately 3,200 for the same period of 2020. Billable samples increased 135% to approximately 21,150 for the six months ended June 30, 2021, compared to approximately 9,000 for the same period of 2020. Contract revenue increased $14,000, or 7%, to $0.2 million for the three months ended June 30, 2021, compared to $0.2 million for the same period of 2020. Contract revenue decreased $0.4 million, or 43%, to $0.5 million for the six months ended June 30, 2021, compared to $1.0 million for the same period in 2020. Total revenue increased $2.3 million, or 269%, to $3.1 million for the three months ended June 30, 2021, compared to $0.8 million for the same period of 2020. Total revenue increased $3.2 million, or 135%, to $5.6 million for the six months ended June 30, 2021, compared to $2.4 million for the same period of 2020.
Gross margin for the three months ended June 30, 2021 was 16%, compared to negative 71% for the same period of 2020. Gross margin for the six months ended June 30, 2021 was 18%, compared to negative 10% for the same period of 2020. The improvement in gross margin was largely driven by increased assay revenue in the current period. Assay gross margin for the three months ended June 30, 2021 was 11%, compared to negative 118% for the same period of 2020. Assay gross margin for the six months ended June 30, 2021 was 10%, compared to negative 78% for the same period of 2020. The increase in assay gross margin was due to higher billable sample volume, improved ASP, and better utilization of current capacity to reduce the per test cost.
Sales and marketing expenses for the three months ended June 30, 2021 were $7.9 million, an increase of 130%, compared to $3.4 million for the same period of 2020. Sales and marketing expenses for the six months ended June 30, 2021 were $14.4 million, an increase of 126%, compared to $6.4 million for the same period of 2020. The increase was primarily attributable higher compensation costs related to the expansion of our sales force, marketing, and payor access teams as well as additional marketing investments to increase awareness of the DermTech Melanoma Test.
Research and development expenses for the three months ended June 30, 2021 were $3.6 million, an increase of 316%, compared to $0.9 million for the same period of 2020. Research and development expenses for the six months ended June 30, 2021 were $5.8 million, an increase of 232%, compared to $1.8 million for the same period of 2020. The increase was due to higher compensation costs of expanding the research and development team, including the addition of a new Chief Scientific Officer and Chief Medical Officer, increased clinical trial costs, and increased spend on laboratory supplies to support new product development.
General and administrative expenses for the three months ended June 30, 2021 were $6.3 million, an increase of 39%, compared to $4.5 million for the same period of 2020. General and administrative expenses for the six months ended June 30, 2021 were $11.5 million, an increase of 43%, compared to $8.0 million for the same period of 2020. The increase was primarily due to higher payroll-related costs and stock-based compensation as we continue to add additional infrastructure such as human resources, billing, information technology and legal resources.
Net loss for the three months ended June 30, 2021 was $17.1 million, or $0.59 per share, which included $3.5 million of non-cash stock-based compensation, partially offset by $0.2 million gain related to non-cash change in fair value of warrant liability, compared to a net loss of $9.6 million, or $0.59 per share, for the same period of 2020, which included $1.1 million of non-cash stock-based compensation and $0.2 million loss related to non-cash change in fair value of warrant liability. Net loss for the six months ended June 30, 2021 was $32.2 million, or $1.15 per share, which included $5.7 million of non-cash stock-based compensation and $1.5 million loss related to non-cash change in fair value of warrant liability, compared to a net loss of $16.5 million, or $1.13 per share, for the same period of 2020, which included $2.1 million of non-cash stock-based compensation and $0.1 million loss related to non-cash change in fair value of warrant liability.
Cash, cash equivalents, and short-term marketable securities totaled $268.3 million as of June 30, 2021.
Full Year 2021 Guidance
Management estimates that full year 2021 assay revenue will be between $11.5 million and $13.5 million, which represents 171% to 218% growth over full year 2020 assay revenue and considers the uncertainly regarding the pandemic.
Conference Call and Webcast Information
DermTech will host a conference call and webcast to discuss the second quarter financial results on Wednesday, August 4, 2021 at 1:30 p.m. Pacific time / 4:30 p.m. Eastern time. The conference call can be accessed live over the phone by dialing (844) 467-7114 for U.S. callers or (409) 231-2086 for international callers, using conference ID: 9781109. The live webcast can be accessed at investors.dermtech.com.
For more such updates and perspectives around Digital Innovation, IoT, Data Infrastructure, AI & Cybsercurity, go to AI-Techpark.com.
