NantHealth, Inc.
Q1 2017 Earnings Call Transcript

Published: 13 May 2017

[Operator:]

Good day, ladies and gentlemen, and welcome to the NantHealth First Quarter 2017 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] I would now like to turn the conference over to Robert Jaffe, Investor Relations for NantHealth. Sir, you may begin.

[Robert Jaffe:]

Welcome, everyone, and thank you for joining us today to discuss NantHealth's 2017 first quarter financial results. On the call today are Dr. Patrick Soon-Shiong, Chief Executive Officer; and Paul Holt, Chief Financial Officer. This call is being broadcast live at www.nanthealth.com. A playback will be available for three months on NantHealth's website. I'd like to make the cautionary statement and remind everyone that all of the information discussed on today's call is covered under the Safe Harbor Provisions of the Litigation Reform Act. The Company's discussion today will include forward-looking information reflecting management's current forecast of certain aspects of the company's future and actual results could differ materially from those stated or implied. In addition, during the course of this call we may refer to non-GAAP financial measures that are not prepared in accordance with US generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Investors are encouraged to review NantHealth's press release announcing its full 2017 first quarter financial results for the company's reasons for including those non-GAAP financial measures in its financial results announcement. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also contained in the company's earnings release issued earlier today. Today Patrick will provide a brief overview of the quarter and discuss the business lines, followed by Paul who would discuss the financial results in more detail. We will then open the call for questions. With that said, I will now turn the call over to Dr. Patrick Soon-Shiong. Patrick?

[Patrick Soon-Shiong:]

Thanks, Robert. Good afternoon, everyone and welcome to NantHealth's 2017 first quarter financial results conference call. As a reminder, in early June 2016 we completed our successful initial public offering raising net proceeds of approximately $83 million. And then during the fourth quarter in 2016 we also completed a successful [Indiscernible] raising net proceeds of more than $102 million. Those who are familiar with NantHealth, and those who are new to NantHealth, so I would like to provide a brief overview of the company and our mission. So what is our mission? NantHealth is a leading next-generation evidence-based, personalized healthcare company driving the right care, at the right time, at the right place. Everything we do is patient provider driven to achieve the best outcomes at the lowest cost. Our unique systems-based approach to diagnosis and care planning is tailored to the specific molecular profiles of patient tissues and integrates this data with large scale real time biometric signal and phenotypic data to track patient outcomes and deliver true precision medicine. So let me describe the three pillars that we have built in order to achieve this goal. Firstly, our diagnostic profile GPS, which enables improved patient outcomes and more effective treatment decisions for critical illnesses. I will speak more to this in detail later in my discussions. Secondly, we have built an adaptive learning system, and this has taken us 10 years to develop, which includes our unique software, our middleware and hardware systems infrastructure, which are called NantOS. This operating system collects indexes, it analyzes and interprets billions of molecular, clinical and operational, and financial data all derived from novel and traditional data sources. We are not aware of any system that has the capacity and has been built to integrate such complex and diverse data sources. This system will continuously improve decision making and further optimize clinical pathways and decision algorithms over time. The third element of our platform is our pioneering efforts in the area of big data, and what we call augmented intelligence. We believe we are uniquely positioned to benefit from multiple significant market opportunities as healthcare providers and payers transition from fee-for-service to value-based reimbursement models and accelerate the pursuit of evidence-based clinical practice, driving better outcomes at lower cost. I'm committed to this goal that the work we've undertaken over the last 10 years and continues today will be transformative for our healthcare system and for the millions of lives impacted by cancer. So before I go into the details about our business, I would like to take this opportunity to get something off my chest. While it is not [Indiscernible] for us to dignify false reporting or to be further distracted by any of these false claims, I feel it is important for me to address a truly [Indiscernible] false statement. Recently reporters stated that NantWorks purchased the Jefferson property from which I am calling now from our foundation for $6 million. That statement is false and worse the reporter knew of the fact that NantWorks actually paid $15.5 million before he published the article. Yet he published a false statement of apparent self-dealing by NantWorks by stating a fabricated amount of $6 million. We demanded a retraction and correction but not surprisingly to date, the editors have failed to respond. We will no longer be distracted or even react to all these false reporting and the details of this particular [Indiscernible] statement will be put on our website for all to review, but now let us go on to review what is important is the business of actually transforming healthcare for all of the nation, and I will focus on the Cancer vaccine. So let us turn to the GPS business. I would like to start with adoption. During the first quarter, a total of 365 commercial tests were ordered. This is up from 326 in the fourth quarter of 2016 and a total of 266 commercial tests were delivered, up from 253 in Q4. As of March 2017, the number of patients with cancer covered by a payer for GPS testing was approximately 327,000. This number includes lives anticipated upon completion of the pilot project with Horizon Blue Cross Blue Shield and is us up from 322,000 at the end of Q4. Let us address the coverage, which I think is the all important statement of how adoption will ultimately occur. We added two new payers for a total of 10 payer contracts with self-employed and health plan payers that now cover GPS cancer. Subsequent to the quarter end, in early April we signed an international reseller and this brings to four the total number of international payers or resellers. Importantly, we are ramping up our efforts to educate the oncology community about the benefits and value of GPS by investing in experienced sales and account management staff. Thus far in 2017 we have doubled our sales team members that call on oncologists and expect to add more staff during the coming year. Today we made a press release about Dr. Dr. Bobby Reddy, who joined us as Chief Medical Officer, and as you could read from today's press release, is an incredibly accomplished physician and oncologist, who will certainly play a major role in educating the clinical and scientific community about not only the clinical utility, but the validity and the opportunity for this diagnostic test to transform their practices. We have also increased our clinical support for oncologists engaged with our GPS cancer team and are plan is for the sales team to focus on calling also on payers both the commercial and self-insured, and for a few teams to educate physicians. As we discussed briefly on our last call, we recently introduced what we call pilot programs to further accelerate adoption. The data that comes out of the GPS cancer is not only complex, but what is exciting it is very actionable, and this is now being demonstrated routinely by the users, who have now – some centers have now done 100 to 200 consecutive tests and finding hugely actionable information. Under these pilot programs, commercial insurance payers agreed to pay for a certain number of GPS profiles as part of the pilot project. In addition, we have developed a GPS cancer benefit option that can be purchased as a supplement to existing benefits through aggregates. Our first group is expected to come onboard late in the third quarter. Let me discuss yesterday's exciting announcement regarding the FDA’s authorization of the Nant Cancer Vaccine trials. Somebody asked me what does the Nant Cancer Vaccine actually stands for. The N stands for Nab or nanoparticle albumin-bound or new antigen. The A stands for antigen in which we will activate the antigens using adenovirus or yeast vaccines. The N stands for natural killer cells either endogenously and exogenously and T for T-cells in which we will activate using IL-15 superagonist. So that is the Nant Cancer Vaccine in which NantCell and NantKwest, sister companies to NantHealth, are focusing on harnessing the unique power of our immune system using natural killer cells to treat cancer. Yesterday the company announced that the FDA has authorized an IND for the Nant Cancer Vaccine for clinical trial enrollment for pancreatic cancer patients. Excitingly NantHealth’s GPS cancer test will be the complementary diagnostic for these clinical trials. As I have said before, GPS cancer test is one of the few tests in the country that measures not only the genome and the transcriptome and the quantitative proteome so that we can recognize a priority whether the patient would be sensitive or resistant to chemotherapy, to target therapy, to monoclonal antibody therapy, and even to checkpoint inhibitors. The NANT Cancer Vaccine is the first combination immunotherapy protocol to orchestrate the delivery of metronomic low-dose radiation in chemotherapy with this GPS molecularly-informed, tumor-associated vaccines as well as natural killer cells, in which we will activate both the innate and the adaptive immune system, and induce what we call immunogenic cell death. By inducing this immunogenic cell death and protecting as well as enhancing the innate and adaptive immune system, the NANT Cancer Vaccine seeks to attain long-term sustainable remission of multiple tumor types with lower toxicity and higher efficacy than our current standards of care. Some of you recall in January 2016 when we announced our Cancer MoonShot 2020, which we now have renamed Cancer Breakthroughs 2020. We started and announced this journey to develop effective personalized cancer treatments to further enhance and harness the human body’s innate immune system as a complete paradigm change to treating patients with cancer. We brought together pharmaceutical companies, biotechnology companies, insurance companies, community oncologists, pediatrics and the fruit of this labor has now been borne by the FDA clearance, which is a further step in our 25-year quest to develop this cancer vaccine that seeks to induce immunogenic cell death and to orchestrate this innate and adaptive immune system through the delivery of these molecularly informed biological platforms. As I said, the acronym NANT stands for, N, Nab; A antigen; N natural killer cell; T IL-15 fusion proteins. And to our knowledge this is the first clinical study, whereby protein nanoparticles, Nab, which is the molecule I invented now being sold as Abraxane, could be delivered with low dose metronomic chemotherapy and combined with molecularly-informed, tumor-associated antigens, which would be activating both the dendritic and T cells and activated by adenoviral and yeast vectors. And they are orchestrated with both endogenous and exogenous activation of natural killer cells. We plan to study this NANT Cancer Vaccine in patients suffering from all types of cancers and all stages of disease in the next 12 months, a Cancer Breakthroughs 2020 goal. Now let me turn to our NantOS results. In Q1, we completed 28 go-live projects across NantOS, Device Connects and NaviNet. This NantOS system forms the basis and pillar of creating crystallized evidence-based decision support medicine. In Q1, contractual commitments for NantOS and NaviNet were 59. At the end of Q1, Eviti capital has increased approximately 22.5 million from 19.2 million at the end of Q4. I am particularly proud about Eviti because it will provide a clinical decision support engine for millions of cancer patients, in which the provider will now have through our machine learning algorithms of GPS understand which patients could benefit from which chemotherapy, which drug, and truly drive outcomes driven, evidence-based care. So let me give a brief note about [Indiscernible] going forward. We will refer to NantOS as the Provider and Patient Engagement tool, Device Connects as Connected Care; NaviNet as Payer Engagement; and Eviti as clinical decision support. Again, the orchestration of these tools of both Provider and Patient Engagement, Connected Care, Payer Engagement, and clinical decision support will generate and establish a nationally based clinical learning system. In Q1, we expanded the license sales to international customers, and in April we added two significant customer wins, one in Europe and one in the United States, each representing more than $1 million in bookings. So with that overview of the business lines, I will turn the call over to Paul to discuss our financial results in more detail. Paul?

[Paul Holt:]

Thank you, Patrick and hello, everyone. For the 2017 first quarter, revenue was $22.5 million, representing a 16% increase over the $19.5 million we reported in the same quarter of the prior year. The increase was driven primarily by a combination of growth across SaaS, other services and GPS revenue. We completed the NaviNet acquisition on January 1st of last year, making all of our growth organic. GPS related revenue was approximately $0.5 million. GPS revenue recognized in the quarter primarily came from three sources; our international distributors, cash received from payers who don't have agreements with us, and profile delivered to patients, who are insured by payers with whom we have agreements. A substantial majority of the 266 commercial GPS profiles delivered in the quarter were with patients insured by payers that we do not yet have agreements with, resulting in cash basis treatment. We expect the proportion of revenue being recognized on a cash basis to come down over time as we gain experience with the growing number of payers, who are covering our GPS profiles. Going forward, our focus is on expanding both our volume profiled as well as the portion of GPS profiles that are reimbursed. We are very close to our first PMPM arrangement, which allows employers to provide GPS coverage for a PMPM fee. This model will help us expand adoption of GPS through a whole new channel and represents a significant opportunity for NantHealth. Turning to other revenue lines, we continue to generate excellent growth in our recurring SaaS services revenue. SaaS revenue grew to $15.2 million versus $13.7 million a year ago. This represents an 11% increase on a year-over-year basis, and was driven primarily by growth at NaviNet revenue. Other services revenue grew to $3.0 million versus $1.9 million a year ago, an increase of 53%. This increase was primarily due to the recognition of a large software services arrangement with a strategic customer of our patient and provider engagement software. Our software and hardware revenue declined slightly to $0.6 million from $0.7 million in last year's first quarter. Software and hardware revenue was linked to the completion of implementation of our connectivity solution software projects. While we made great progress on several large software connectivity projects this quarter, which will deliver revenue in future quarters, our revenue recognition is tied to the full completion of those projects, resulting in deferral of revenue to future periods. Gross profit was $3.5 million, or 15% of revenue compared to $6.4 million or 33% of revenue in the same quarter a year ago. The decrease was tied to several factors, including GPS related costs, an increase in amortization of capitalized software development costs, and an increase in the recognition of previously deferred customer implementation and software services costs. SG&A expense was $20.9 million compared to $27.4 million in last year's first quarter, a decline of $6.5 million. The decrease was primarily related to approximately $5.2 million of acquisition related compensation costs recorded in the year ago quarter. R&D expense was $13.4 million compared with $10.7 million a year ago, an increase of $2.7 million. The increase was driven primarily by the recording of $0.8 million in stock compensation as well as reduction in amounts capitalized due to the timing of completion of certain R&D projects. R&D expense as a percentage of total revenue was 60% compared with 55% a year ago. For the 2017 fourth-quarter we recorded an income tax expense of $0.3 million versus an income tax benefit of $4.4 million in the prior year first quarter. We recorded a loss from our related party equity investment in NantOmics of $4.5 million. On a GAAP basis, our net loss is $41.1 million or $0.34 per share compared with $33.1 million or $0.36 per share for the 2016 first quarter. On a non-GAAP basis our loss per share was $0.24 compared with $0.18 in the first quarter of last year. Turning to the balance sheet, at March 31, 2017 cash was $124.9 million. Cash flow used in operations was approximately $26 million in the first quarter. With that, I will now turn the call back over to Robert.

[Patrick Soon-Shiong:]

Thanks, Paul. Operator, we have completed our prepared remarks. We'd now like to open the call to questions.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from Sean Dodge with Jefferies. Your line is open.

[Sean Dodge:]

Hi, good afternoon. Thanks for taking the question. Patrick on the two payer deals that you signed during the quarter, can you give us a little more detail on who those were with, and maybe the potential size of those maybe in terms of covered cancer lives?

[Paul Holt:]

Hi Sean, this is Paul. Those are both some local health plans. As you saw that helped us bump the number of lives up from 322 to 327, but they are decent sized plans. But I think at this point, we are not necessarily going to get into the details of customer by customer.

[Sean Dodge:]

Sure. Then maybe a little bit of background on the wins, were those NantHealth technology clients before or were they using NaviNet or Eviti, perhaps and maybe you can give us some idea of how long the sales cycle was for those two?

[Paul Holt:]

So, one was in our connected care segment. And it is a brand new customer and it is up in Europe as we mentioned, and that was a fairly lengthy sales cycle. I would say at least six months. But it was a very big win for us, very important. We had a lot of competition for that project, and I think it is a stepping stone for further deals up in that particular area, some of the Nordic regions.

[Patrick Soon-Shiong:]

Sean, I think the question you are really getting to is there synergies between the interaction based on this – [Indiscernible] of our software support vis-à-vis physician support et cetera, and till our connectivity to payers who wanted to cover GPS. And I think that will bear its way out. I think it is exactly why as an organization we are beginning to clarify to the market that what we are truly is one of the few integrated organizations that will drive personalized healthcare in every aspect. So yes, when an institution needs to create connected care they want to connect care in the hospital on the outpatient. When the institution wants to create a payers and provider patient engagement, which we do through our operating system, they want to also have the provider know what treatment is the right treatment. When the physician wants to look at EBITDA and see what is the standards of care, and how they will be reimbursed relative to the payer, we have an opportunity also to educate at the same time the GPS driven trial or the GPS driven treatment. So, I think this complete cross-sell, not cross-sell but truly systems integration. We have gone to great lengths and taken as I said 10 years and maybe more to bring this to the fore. I think it will get even more amplified when the clinical trials come out, which are these unique clinical trials in which GPS will be the basis of the information to which the patient will know which gene sequence is abnormal, which protein expression is abnormal. And again GPS is the only test that can actually provide that kind of information. So, all of these cross connections in this disparate side of the approach of healthcare we have taken on the challenge of trying to interconnect with both the information as well as the test. So I think your question you are getting to is does the one, sale of software perhaps generate an interest in GPS, and I think we are beginning to see that.

[Sean Dodge:]

Okay, and so it sounds like one of the payers did start to approve of this cross-sell thesis and the other one was just net new to GPS and NantHealth?

[Patrick Soon-Shiong:]

Correct.

[Sean Dodge:]

Okay, all right. Thank you.

[Operator:]

Thank you. Our next question comes from Charles Rhyee with Cowen and Company. Your line is open.

[Unidentified Analyst:]

Hi, it is James on for Charles. Could you maybe provide some color as to why the order of velocity hasn’t appeared to be taking off as expected?

[Patrick Soon-Shiong:]

Sorry, what wasn’t – what is not being taken, I couldn't hear the question. Can you repeat that? Sorry.

[Unidentified Analyst:]

Could you provide some color as to why the ordering velocity hasn’t appeared to be taking off as expected?

[Patrick Soon-Shiong:]

The ordering velocity, well I think two things, right. One, the complexity of the information. I think we underestimated the real complexity of how doctors will understand this deluge of information that they were receiving. The report is something close to 17 sometimes 20 pages. And we have figured out a way to reduce the important information to one page, and have access to the details of the other pages. So that was the first step was to establish an educational tool. Most practicing physicians in the oncology community have very little knowledge of the word transcriptome or RNA protein expression or even genome. What they are really interested in is what drug do I give to my patient? What this test does is one of the few only tests that can at the protein level provide guidance as to the sensitivity and resistance to what drug to give to the patient. When we first came out I think incorrectly and maybe naively, we thought that science would speak and we realized very soon that the practicality of the need or what we clinical utility needed to speak louder. And even louder than speaking of the clinical utility what need to speak was who's going to pay for it? And while we hired all of these payers and we had one payer, independent Blue Cross step up very, very, very early on. Unexpectedly that did not translate into the entire blue system because each of the blue systems act independently state by state, and required a huge amount of education even amongst the payers. And then the third one is we took now the time in the last three months to meet with the CMS both at the national and regional levels, and I must say I am extremely encouraged by the reaction and response we received about number one, the fact that gene panels by themselves are actually inaccurate. Number two, gene panels by themselves without tumor normal could not differentiate whether it is actually a normal variation of you or I call it a sniff or whether it is actually a mutation. And gene panels when it doesn't measure the protein or RNA downstream cannot tell you that even if the gene is mutated, is there a receptor for the drug upon which to act. And in fact we showed in certain drugs very expensive drugs, a 69% false positive rate. When they began to understand this and when clinicians began to understand this I think the light has gone on. Now you have to put all of this into relative space. There is no test ever to my knowledge that has done whole genome sequencing of tumor normal added to RNA added to quantitative proteomics until we launched it. And putting that into perspective, we launched this at ASCO, not even one year ago. So if you look at the trajectory of foundation medicine and how long it has taken them over the course of time even to get reimbursement, and you just saw the [Indiscernible] reimbursement approval for the panel just in the last maybe three months, you begin to see the slow process in which that takes. So not to provide these as any excuses, I think we underestimated the complexity of the data, number one. We underestimated the education or marketing, so to speak, of the true clinical utility of the test, and we underestimated the time it would take to educate even the payers. All of that we are working through now and what is exciting is those who are using it and that is probably the biggest indicator to me are now using the test consecutively for every patient. So if you go to the places like University of Indiana, [Dr. Mike] in Sarasota, Florida you begin to see now the doctors that use it feel that they actually are completely encumbered in making a decision if they don't use the test because it provides such valuable information. I think the University of Indiana is now up to 200 consecutive tests and similarly at Sarasota maybe over 100 tests. So I think that is what is encouraging is that once the education occurs, the utilization and adoption will take place. So I believe it is just a matter of time.

[Unidentified Analyst:]

Great. Also like, how have your expectations now changed given that you are more aware of the complexity?

[Patrick Soon-Shiong:]

Well, I think we internally are doing an internal review of our projections, and clearly we will be internally adjusting that. And I think the analysts – we have shared some of these discussion at our analyst day, and we will continue to share those as we move forward.

[Unidentified Analyst:]

Okay, great. Thank you.

[Operator:]

Thank you. Our next question comes from Joe Munda with First Analysis. Your line is open.

[Joe Munda:]

Good afternoon Patrick and Paul. Can you hear me okay?

[Patrick Soon-Shiong:]

Sure, hello.

[Joe Munda:]

First question Patrick, really quick on the 80 patient trial, the QUILT trial for sorry – for the pancreatic cancer vaccine, would you be able to book revenue on that or are you going to be able to recognize revenue on that commercially?

[Patrick Soon-Shiong:]

We are working through that with the auditors. Clearly the tests then will be covered by the pharmaceutical companies. And so then we work through with the auditors, where a relationship or contractual arrangement will have to occur between either the pharmaceutical companies directly or through the organizations actually doing the tests on behalf of the pharmaceutical company. So we are working through that with the auditors, and I am hopeful that we will find that the auditors will agree to allow some level of revenue to be booked.

[Joe Munda:]

I guess, from a modeling standpoint would it be safe to assume all 80 patients would receive a GPS scan…?

[Patrick Soon-Shiong:]

Absolutely no. Let me describe the Nant Vaccine. The GPS test is – no patient will enter the trial without a GPS test. It is actually a requirement in order for us to do many things with the test. One, to get an insight into whether the patient is resistant or sensitive to taxol, or paclitaxel, or whether cisplatin, with each of the drugs that you see in the trial. It would give us an insight into the presence or absence of the type of what we call tumor associated antigens, for which we can administer the adenoviral vaccine. It will give us the insight into the presence or absence of the tumor associated antigens to which we could target the natural killer cells. So you begin to see it is truly a universal complementary diagnostic, and so therefore any patient that enters into these trials are not really entering the trial because we will be incumbent with absence of knowledge of what is going on or what should go on on behalf of the patient. So all the trials that we will be talking about as it relates to this Nant Cancer Vaccine and in the future as you begin to see we have announced to those other tumor types will require GPS cancer tests.

[Joe Munda:]

That is helpful. Thank you. Moving on, do you guys have a number as far as the number of ordering physicians, you guys have provided that in the past, as well as I guess the pipeline of payers or engaged payers, you had 27 at the end of the fourth quarter I believe, any updates there?

[Patrick Soon-Shiong:]

I am sorry. [Indiscernible] right. I think the last time in Q4, we said there were 264, something like that to get ordering physicians. We are now up to 358 ordering physicians and counting. I don't know 2000 oncologists or 5000 oncologists out there, but yes, so we are up to 358 as of Q1 2017.

[Joe Munda:]

Okay, the pipeline of payers that you had actively engaged to 27, has that number changed at all or I just you just added two more, so we are down to 25 or is that number up?

[Patrick Soon-Shiong:]

Paul, do you have?

[Paul Holt:]

Yes, I have that. So we closed two of those. We told you we had 27 and we closed two of them. So we are at 25, but it has only been five weeks since the last time we spoke – we spoke to you.

[Patrick Soon-Shiong:]

So, Joe and I think what has happened as it is a word of mouth as these payers [Indiscernible] each other, and there is already internal competition among payers not wanting to be left out. But I think what is also exciting is the international resellers are also now taking on the United States.

[Joe Munda:]

Patrick you talked about sales team doubling, and as well as the clinical support team additions, can you give us a number, I guess, on both where you are with sales team and as far as clinical support?

[Patrick Soon-Shiong:]

So, we had a very little – small sales team and so we are going to probably get up to 10 to 12 people now on the GPS side. The clinical support is going to be very important. Now I have always said this is something like selling a pharmaceutical drug because the audience is both the nursing staff as well as the treating oncologist to understand the real importance of this test as the doctor makes a decision about the drug to be given. I think more and more as the doctor says, oh, my goodness, you are talking about taxol, the drug I give everyday, you're talking about cisplatin, the drug I give everyday, if I had known that this test can tell me whether the patient is going to be resistant or sensitive to that drug, I would have certainly ordered the test. And that is the kind of clinical support that we are getting out there. Separate from the very complex what does this strange gene mean, or transcriptome mean and what clinical trial is available for that et cetera. So I think this is where we need to bolster both internally and externally and that is what we are doing now.

[Joe Munda:]

Paul, I have just a couple more, Paul do you have a bookings number as well as the contribution from NaviNet in the quarter?

[Paul Holt:]

I think we are not necessarily going to give that bookings number out.

[Patrick Soon-Shiong:]

I don't think we break it down to – by product and I think…

[Paul Holt:]

But not necessarily down to the NaviNet level. What I did disclose is that the vast majority of our growth came out of the NaviNet platform. But we did see some growth on the Eviti side too, but I think we are going to leave it at that for now on the disclosure side.

[Joe Munda:]

Patrick my last question, I saw a press release not too long ago, NantOmics acquired Genos? Just wondering if any could NantHealth see any benefit from that because NantOmics essentially does the sequencing for NantHealth, any benefit there for NantHealth eventually, potentially?

[Patrick Soon-Shiong:]

There may be – look, let me just tell you a little bit of Genos, even though this is a NantHealth call. The reason Genos was formed. It is a very noble issue of allowing the consumer to own their own data. So Genos is the unique situation where if consumers wanted to have the gene sequenced, we believe that ownership and rights of that data should be with the consumer. So that is how Genos was formed and it also would provide the consumer not only his or her own information for future use, but if the consumer then wanted to participate in the clinical trial, it is up to the consumer to work with the former and identify themselves as a potential, and then that data would be available. What this will do also is create consumer awareness. I think 23andMe, [Indiscernible] and ancestry.com have done a great job in creating consumer awareness in this field. What we have is much more complicated than that. So I am really excited to integrate this technology Genos technology into NantOmics but how or not it would ultimately help NantHealth, I can't predict. But, look if a consumer knows that the way my mother or your father or your loved one is about to get some chemotherapy, and this test can tell the doctor before the treatment starts whether your loved one will be sensitive or resistant to the drug, I think it will be helpful if the consumer to educate the doctor about the opportunity of such a test. So in that way it could help.

[Joe Munda:]

Okay. Thank you.

[Operator:]

Thank you. Our next question comes from Richard Close with Canaccord Genuity. Your line is open.

[Brian Hoffman:]

Thank you for taking the question. This is Brian Hoffman in for Richard. You said that you had 358 ordering physicians, and then once you have a physician start ordering tests, they become, I guess, a repeat customer or if you want to call it that, they order for all their patients, and there were 365 tests ordered in 1Q, so just trying to reconcile that how we should think about an ordering physician being, I guess, a repeat customer. It is about one test per physician per quarter, what we can expect going forward or do you expect that to ramp up?

[Patrick Soon-Shiong:]

It is an almost impossible calculation for me to make. And I understand you need some level of modeling, but the variability of physician education and physician need sadly is highly variable. The two examples I gave you were physicians that started working with us almost a year ago and now continuously repeat. I think most physicians need 3,4,5, 6 patients or so to really say, oh, my goodness I really need this. This really helps me. And the rate of ramp is hard for me to predict. I think it will be unfair for me to give you any indication of that kind of ramp. I think you need to just – we will just have to watch and see in our job frankly. That is exactly why we need to bring out this clinical support team, and as I said, Bobby Reddy, and people like Bobby will be incredibly helpful in educating these physicians.

[Brian Hoffman:]

Great. Thank you.

[Patrick Soon-Shiong:]

Okay. Thank you.

[Operator:]

Thank you. I'm showing no further questions at this time. I would like to turn the conference back over to Robert Jaffe for closing remarks.

[Robert Jaffe:]

Thanks operator. We look forward to sharing our progress on our next scheduled conference call in August. Thank you again for joining us today everybody. Have a good day.

[Operator:]

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program and you may now disconnect. Everyone have a great day.