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Progenity Inc. Common Stock (NASDAQ:PROG)
Q4 2020 Earnings Call
Mar 18, 2021, 4:30 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Welcome to the Progenity’s fourth-quarter 2020 earnings call. At this time, all participants are in a listen-only mode. [Operator instructions] I will now turn the call over to Robert Uhl, managing director with Westwicke ICR, Progenity’s investor relations firm.
Robert Uhl — Investor Relations
Thank you, operator. Good afternoon, and welcome to Progenity’s fourth-quarter 2020 financial results conference call. Joining me on the call are Dr. Harry Stylli, chairman and chief executive officer; and Eric d’Esparbes, chief financial officer.
Before I turn the call over to Dr. Stylli, I would like to remind you that today’s call will include forward-looking statements within the meaning of the federal securities laws, including but not limited to the types of statements identified as forward-looking in our annual report on Form 10-K that we will file later and our subsequent periodic reports filed with the SEC, which will all be available on our website in the Investors section. These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties, including many that are beyond our control. Please note that the actual results could differ materially from those projected in any forward-looking statement.
For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, as well as risks related to our business, please see our periodic reports filed with the SEC. A slide deck with some supplemental fourth-quarter financial information is also now on the website, but it will not be directly referenced by the speakers on the call today. With that, I will now turn the call over to Dr. Harry Stylli, chairman and CEO of Progenity.
Harry Stylli — Chairman and Chief Executive Officer
Thank you, Robert, and thank you all for joining us this afternoon. We made significant progress during the fourth quarter, both with our revenue-generating business and especially with our innovation pipeline programs. In Q4 2020, we made progress in stabilizing our core revenue business. In addition to revenue cycle improvements that are beginning to strengthen ASPs, we continue to witness strong new customer acquisition and in-network expansion by adding national and regional contracts.
Further, we advanced our discussions for in-network status with our remaining large commercial payors and saw additional commercial and government payors covering average risk NIPT. These factors which will continue to grow in contribution are helping lay the foundation for sustained growth in 2021 and beyond. We maintained a disciplined approach to managing our operating expenses during the quarter through a combination of reduction in force and cost controls while maintaining appropriate resourcing of our key R&D programs. Eric, our CFO, will provide more details later in the call.
During the quarter, we raised $118 million gross proceeds in December 2020 from a concurrent secondary equity offering and issuance of convertible notes. In addition in Q1, we raised $25 million in gross proceeds from a private placement with two leading healthcare-focused investment firms that were drawn especially to our innovation pipeline. We view this increasing investor engagement positively and it allows us to extend investor focus beyond our core molecular testing business and into our innovation pipeline, which is now progressing at an accelerated pace. We were able to see evidence that our core business in the fourth quarter of 2020 was stabilizing and reported 82,000 tests, including 56,000 core molecular tests, and 26,000 COVID-19 tests.
In the quarter, we continued to witness customer turnover primarily due to changes we implemented during 2020 to strengthen our revenue cycle management and our billing process. As we approach the end of the first quarter of ’21, the headwind of account attrition due to the aforementioned changes continues to significantly weaken. By contrast, we continue to secure new business with significant success. These new accounts are now increasing productivity and beginning to help offset losses due to account attrition.
I’m also pleased to share that during the fourth quarter, Progenity further increased its in-network covered lives with an additional 1 million lives from new contracts with regional payors. Separately, we’re advancing in our efforts to achieve in-network status with remaining large commercial payors. And we’re hopeful we can add a significant number of covered lives with access to our product portfolio in 2021, which should lead to a further expansion of our commercial presence. We further expect…
