Interpace Biosciences Earnings Drop

Key Points

• Substantial revenue decline to $9.2 million (GAAP) in Q2 2025, driven by PancraGEN test exit, partially offset by record growth in thyroid diagnostics.

• Gross profit margin (GAAP) fell to 57%, but stabilized at 65% for core thyroid operations excluding one-time PancraGEN impact.

• Operating results swung to a $0.5 million operating loss; $1.2 million in one-time charges related to the PancraGEN reimbursement loss recorded, with strong cash collections supporting liquidity.

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Interpace Biosciences (OTC:IDXG), a molecular diagnostics company specializing in thyroid cancer risk assessment and other oncology tests, announced its earnings for the second quarter of fiscal 2025 on August 8, 2025. The headline news: a sharp revenue decline to $9.2 million (GAAP) in the wake of losing insurance reimbursement for its PancraGEN® pancreatic cancer test, partially mitigated by record performance in its thyroid diagnostics segment. Profitability fell versus last year, with gross margin (GAAP) slipping to 57% and the company moving to an operating loss of $0.5 million. Performance missed the prior-year period but highlighted a stabilizing core in thyroid diagnostics. No analyst consensus or external estimate comparison was available for this period.

Company Background and Strategic Focus

Interpace Biosciences develops and commercializes molecular diagnostic tests aimed at cancer risk assessment, particularly thyroid and pancreatic conditions. Its key products are ThyGeNEXT®, a next-generation sequencing (NGS) assay for thyroid nodules, and ThyraMIR®v2, a microRNA panel that uses an algorithm to classify thyroid cancer risk. The company previously offered PancraGEN®, a molecular test for pancreatic cancer risk, but this line has now been discontinued due to reimbursement loss. Interpace also offers RespriDX® (lung cancer origin differentiation) and is developing BarreGEN® for Barrett’s Esophagus.

The business is now focused exclusively on the thyroid diagnostics segment, reflecting a strategic shift. Success now primarily depends on growing adoption of thyroid test offerings and improving lab operational efficiency through investments in artificial intelligence (AI) and automation technologies.

Quarter in Review: Revenue, Profitability, and Segment Performance

Revenue for the second quarter of 2025 fell sharply compared to the prior-year period, reflecting the exit of PancraGEN after the loss of insurance reimbursement. This left the company reliant on its thyroid portfolio, which recorded both test volume and revenue at all-time highs. Thyroid test volume jumped 16% year-over-year, and thyroid-related revenue climbed 25% to $8.7 million. This business now provides approximately 95% of total company revenue.

Despite the thyroid segment's momentum, the company's overall net revenue (GAAP) was lower than the previous year. The impact of exiting PancraGEN led to a $1.2 million one-time charge, including severance and asset impairments, which negatively impacted gross margin and operating results. Excluding the PancraGEN charges, gross margin was 65%.

The period included $0.5 million in operating losses (GAAP), a reversal from Q2 2024's $2.6 million in operating income. Adjusted EBITDA, a non-GAAP measure of operational profitability that excludes noncore expenses and some noncash charges, dropped to $0.4 million from $2.8 million in the prior-year quarter. Net loss from continuing operations (GAAP) was $0.5 million, a swing from net income of $2.5 million in the prior-year quarter, as the company absorbed one-time transition-related costs.

Q2 2025 cash collections totaled $10.8 million compared to $11.0 million in the prior year quarter. Net cash provided by operating activities (GAAP) for the first half of 2025 stood at $1.76 million, compared to $1.35 million in the prior-year period. The company's liquidity position remained tight, with cash on hand (GAAP) decreasing to $0.5 million as of June 30, 2025 from $1.5 million as of December 31, 2024. However, management reduced debt and liabilities, with total liabilities (GAAP) down to $13.5 million as of June 30, 2025 from $17.0 million at December 31, 2024.

Product Portfolio and Operational Changes

Interpace’s current commercial focus is on ThyGeNEXT®, a genomic sequencing test for evaluating thyroid nodules, and ThyraMIR®v2, a microRNA-based thyroid cancer classifier. These product families enable physicians to better stratify thyroid cancer risk and support targeted treatment decisions. The surge in thyroid test demand underscores adoption, a critical success factor in this market.

Operationally, the exit of PancraGEN, a molecular test for pancreatic and biliary cancers, has left the company concentrated in thyroid diagnostics. Management reported a “smooth transition” into this singular diagnostics focus. Investment in automated laboratory operations and digital workflow leveraging AI underpin efforts to boost efficiency and lower long-run costs.

Financial discipline was supported by robust cash collections and debt repayments. The company made principal repayments on long-term debt and saw its shareholder deficit (GAAP) improve to $(1.2) million at June 30, 2025 from $(2.2) million at December 31, 2024. Cash management remains a focus, as liquidity narrowed at the end of the period.

There were no new updates this quarter on regulatory approvals, new product launches, or partnerships with pharmaceutical or biotechnology firms. Innovation efforts were primarily centered on optimizing existing lab operations, not new diagnostic test announcements.

Outlook and What to Watch

Looking forward, company leadership expects financial metrics to reflect a more stable thyroid-only diagnostics operation starting in Q3 2025. Preliminary July 2025 revenue of $3.3 million, up 54% from July 2024, suggests momentum is holding after exiting PancraGEN, and the company stated it anticipates ongoing improvements in revenue, profitability, and cash flow.

Investors should watch for further adoption rates of thyroid diagnostics, changes in payor reimbursement policies, and updates on efficiency improvements through AI and automation. With the company now focused almost entirely on thyroid cancer risk assessment, growth prospects and risks will depend on the continued expansion of its core testing volume and the ability to manage costs.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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