nvta q3 2016 earnings

© 2016 Invitae Corporation. All Rights Reserved. 1

INVITAE:Bringing genetic information into mainstream medical practice

T H I R D Q U A RT E R E A R N I N G S C A L LN O V E M B E R 7 , 2 0 1 6

CONFIDENTIAL © 2016 Invitae Corporation. All Rights Reserved. 2

Safe harbor statement

This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements

relating to the company’s expectations regarding its ability to obtain reimbursement; the company’s beliefs regarding its positioning in the market; the

company’s expectations regarding being cash flow positive; future financial and performance levels; the indicators of the company’s success and its expected

actions with respect to those indicators; the company’s belief that it has industry-leading market share in the genetic testing industry; the company’s

prioritization of driving revenue; the company’s expectation that it will begin to operationalize contracts with major payers, and that payment rates and volume

will increase throughout 2017 and beyond; the utility of genetic testing and its impact on diagnoses and patient outcomes; the applicability and utility of the

research studies to diagnoses and patient outcomes; the ultimate functionality, features, availability and processes used by the Invitae apps and the Helix

marketplace; and the company’s beliefs with respect to the benefits of the Invitae apps and the Helix marketplace. Forward-looking statements are subject to

risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future

performance. These risks and uncertainties include, but are not limited to: risks associated with the company’s ability to develop and commercialize new tests

and expand into new markets; the company’s ability to use rapidly changing genetic data to interpret test results accurately, consistently and quickly; the

company’s history of losses; the company’s need to scale its infrastructure in advance of demand for its tests and its ability to increase demand for its tests;

the company’s ability to drive revenue; the company’s ability to successfully operationalize payer contracts; the company’s ability to achieve and maintain

positive cash flows and to execute its strategy to create a profitable long term business; the risk that the company may not obtain or maintain sufficient levels

of reimbursement for its tests; laws and regulations applicable to the company’s business, including potential regulation by the Food and Drug Administration;

that Medicare may change the pricing or other terms for reimbursement, or not reimburse the company for other tests in the future; the risk that the

company’s apps on the Helix platform are not ultimately launched; and the other risks set forth in the company’s filings with the Securities and Exchange

Commission, including the risks set forth in the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016. These forward-looking

statements speak only as of the date hereof, and Invitae Corporation disclaims any obligation to update these forward-looking statements.

NOTE: Invitae and the Invitae logo are trademarks of Invitae Corporation. All other trademarks and service marks are the property of their respective owners.


Consistent execution positioned us to drive revenue to cash flow positive

Reduced COGS from $500 to $450 in the quarter

Expanded to more than 1,000 genes in production

~200% year-over-year growth: increased volume to approximately 15,200 billable reports per quarter

Billing at an annual run rate of ~$70M, rapidly growing Over 200% growth in cancer business, over 400% in the rest


41M

Q2:16

Covered lives: now at more than 160 million

Q1:14

0.0M

Q2:14

0.0M

Q3:14

0.1M0

Q4:14

4.5M

Q2:15

4.5M

Q1:15

4.5M

95M

Q3:16

100 million

50 million

Q1:16

5.5M

Q4:15

5.5M

Q3:15

5.5M

Q4:16

160M150 million


Over the next two years you will see us emerge from a disruptive concept -- bringing genetics into

mainstream medicine -- into a rapidly growing business generating positive cash flow by the end of 2018


Introducing new indicators of success

Volume Value of billable tests Revenue and revenue per test at ~90 days payable Average COGS per sample Gross margin per sample Opex with breakout Change in cash


Q1:201

4

Q2:201

4

Q3:201

4

Q4:201

4

Q1:201

5

Q2:201

5

Q3:201

5

Q4:201

5

Q1:201

6

Q2:201

6

Q3:201

6

$118 $301 $310$876 $1,200

$1,800 $2,200 $3,200

$4,000

$5,600

Q1:201

4

Q2:201

4

Q3:201

4

Q4:201

4

Q1:201

5

Q2:201

5

Q3:201

5

Q4:201

5

Q1:201

6

Q2:201

6

Q3:201

6

200 500 1,100 1,800 2,200

4,500 5,100

7,200

9,700

12,000

Billable tests

Revenue ($k)

Approximately $71.4 million in cash, cash equivalents, restricted cash and marketable securities at September 30, 2016

Expenses are incurredfor tests in the periodin which the test is conducted

Billable test numbers and revenues are approximate

Strong volume growth, with revenue following

15,200

$6,300


Improving our gross margins by decreasing COGsG

ross

mar

gin

per b

illab

le re

port

($100)

($300)

$0

-$74

Q2 2016

($500)

-$64

Q3 2016

-$342

Q3 2015

-$335

Q4 2015

-$209

Q1 2016

-$465

Q2 2015


Operating efficiency:growing volume while holding costs steady

Q3 2016Q3 2015 Q4 2015 Q1 2016 Q2 2016Q2 2015Q1 2015

% R

even

ue

100

300

500

0

700

$0.0

$2.0

$6.0

$4.0 Rev

enue

($M

)

R&D Commercial G&A Revenue

$6.3M


Now that we have concluded contracts with a critical mass of third party payers, we are confident that we can build a genetic testing business that will generate positive cash flows by the end of 2018


In my experience, the pace at which we have converted payers in the last several months

is unprecedented and reflects a transition in the industry to a more modern billing and pricing system


Dramatic growth across all clinical areas

Q3 2016Q4 2015 Q1 2016 Q2 2016

3,000

2,000

1,000

0

900

1,500

2,500

3,200

Q3 2016Q4 2015 Q1 2016 Q2 2016

12,000

8,000

4,000

0

6,300

8,500

9,500

12,000

Quarterly oncology billable tests* Quarterly non-oncology billable tests*

*Billable test numbers are approximate.*Billable test numbers are approximate.


Advocacy organizations

Invitae’s network: established and growing

Biopharmaceutical

Payers & others

Platform


Invitae is no longer a concept story -- but a company with what we believe is the fastest

growing market share in the genetic testing industry and a clear path to becoming cash flow positive


Reduced COGS from $500 to $450 in the quarter

Expanded to more than 1,000 genes in production

~200% year-over-year growth: increased volume to approximately15,200 billable reports per quarter

Billing at an annual run rate of ~$70M, rapidly growing Over 200% growth in cancer business, over 400% in the rest

Significantly expanded in network coverage to more than 160 million lives

Building genome network with biopharma, advocacy, payers, clinicians and industry partners

Guiding towards positive cash flow by end of 2018

Consistent execution positioned us to drive revenue to cash flow positive

nvta q3 2016 earnings

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