Biodesix, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. Biodesix develops and provides lung-disease diagnostic tests and research, testing, and companion-diagnostic services for biopharmaceutical companies.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | $14.8 million | $9.1 million; up 64% |
| Gross profit / margin | $11.6 million / 79% | 65% margin |
| Operating expenses | $25.8 million | $25.4 million; up 2% |
| Operating loss | $11.0 million | $16.4 million |
| Net loss | $13.6 million; $0.14 per share | $18.7 million; $0.24 per share |
| Cash used in operating activities | $15.3 million | $7.7 million |
- Diagnostic test revenue was $13.8 million, up 60%, principally from greater Nodify Lung test adoption; IQLung revenue declined $0.6 million. Biopharmaceutical Services and other revenue rose 149% to $1.0 million.
- Cash and cash equivalents were $11.5 million at quarter-end, down $14.8 million from year-end. Total assets were $87.2 million and total liabilities $92.7 million, leaving a $5.5 million stockholders’ deficit.
- Outstanding Perceptive Term Loan principal was $40.0 million; its stated interest rate was approximately 14.3%. The loan matures in November 2027, with principal due at maturity, and is secured by substantially all company assets. The company reported covenant compliance at March 31.
- Current liabilities were $31.2 million versus current assets of $28.5 million. The balance sheet also included $19.2 million of current contingent consideration and $25.6 million of operating lease liabilities.
Changes and management commentary
- Revenue growth and improved test economics lifted gross margin to 79%; management attributed this to a higher share of lung diagnostic testing, workflow optimization, and improved biopharmaceutical-services efficiency. Test deliveries reached a company record for five consecutive quarters.
- Net loss improved by $5.1 million year over year. Research and development expense fell 37% to $2.0 million, while sales, marketing, general and administrative expense rose 8% to $20.6 million, including higher compensation, sales activity, and depreciation at the new Louisville facility.
- Operating cash use increased year over year, reflecting working-capital changes, the $3.4 million contingent-consideration payment, and lower tenant-improvement allowance receipts. Investing cash use was only $0.3 million, compared with $7.7 million a year earlier.
- Management expects near-term operating losses while investing in growth, sales expansion, research and development, and product development. No specific revenue or earnings guidance was provided. The company has reduced planned capital expenditures and certain operating costs.
Going concern, financing, and risks
- The filing states that substantial doubt exists about the company’s ability to continue as a going concern within one year after issuance of the financial statements. Management’s assessment cites dependence on executing its operating plan and maintaining loan covenants; failure could trigger default and acceleration of debt.
- After quarter-end, the April 2024 offering and concurrent private placement raised approximately $51.5 million net: about $18.3 million from common stock and $33.2 million net from the preferred-stock placement (the placement’s stated gross purchase price was $35.0 million). The preferred shares may convert, subject to stockholder approval and ownership limits, into up to 30.4 million common shares, creating potential dilution.
- After quarter-end, the company paid a $5.3 million scheduled Indi milestone installment and prepaid an $8.4 million installment due in July; one $6.1 million payment remained due October 1, 2024. The filing’s subsequent-event note dates the $8.4 million prepayment to April 22.
- Key risks include reimbursement and payer coverage, continued test adoption, covenant compliance and access to capital, high borrowing costs, customer and biopharmaceutical contract variability, and reliance on certain single-source suppliers. The company reported no material legal proceedings and no material changes to its previously disclosed risk factors.
Important facts for investors to verify
- Whether the April financing, cash burn, and subsequent Indi payments provide sufficient liquidity, and how management’s going-concern assessment changes.
- Progress against Perceptive’s quarterly revenue covenants, including the effects of the amendments and the loan’s approximately 14.3% rate.
- Whether Nodify growth and biopharmaceutical-services expansion continue, alongside reimbursement levels and IQLung performance.
- Stockholder approval and conversion terms for the preferred placement, including the potential issuance of up to 30.4 million common shares.
- Timing and amount of the remaining $6.1 million Indi payment and any other near-term contractual obligations.