Interpace Biosciences: Thesis Confirmed ($IDXG)
Up 30% in six weeks. Every piece of optionality is now in motion.
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Before we dive in - thank you.
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When I started this newsletter, the goal was simple: share the asymmetric healthcare ideas with the depth they deserve. No fluff. No filler.
The fact that 50 of you are now paying for that work means a lot. Genuinely.
The Update
In early December, I profiled Interpace Biosciences as a misunderstood diagnostics company hiding behind a bad headline.
The market saw “revenue down 29%” and moved on. What it missed was a thyroid-focused business growing 22%, generating profit, and trading at 9x earnings.
Since then, the stock is up 30%.
And last week, the company dropped a press release that confirmed essentially every element of the original thesis.
Let’s walk through what happened.
The Numbers
On January 20th, Interpace announced preliminary 2025 results. Here’s what they reported:
Total 2025 revenue: approximately $38–39 million.
Thyroid testing revenue: approximately $34–35 million.
That thyroid number represents 21% growth over 2024. This is a business that was supposed to be in trouble. Instead, it just posted its best year ever in its core segment.
The remaining $4 million or so came from PancraGEN revenue in the first few months of the year before Medicare reimbursement was lost in early May. That’s now fully behind them. Going forward, Interpace is a pure-play thyroid diagnostics company - 100% of revenue from ThyGeNEXT and ThyraMIR v2.
2026 guidance: approximately $40 million.
This implies 16% growth in thyroid testing revenue. Management is guiding for continued double-digit growth even as the business scales.
The company also reiterated what we observed in Q3: positive Net Income and EBITDA from operations. This isn’t a cash-burning turnaround story. It’s a profitable, growing business.
The Capital Structure - Simplified
This is where it gets interesting.
In the original write-up, I noted that Ampersand Capital Partners and 1315 Capital owned approximately 84% of the company through Series C Preferred Stock. Each preferred share had a $1,000 stated value and was convertible at $2.02 per share.
That preferred stock has now been fully converted to common.
Here’s the mechanics: 47,000 preferred shares at $1,000 stated value divided by the $2.02 conversion price equals approximately 23.3 million new common shares issued.
Pro forma shares outstanding: 27.7 million - comprised of the 4.4 million shares previously outstanding plus the 23.3 million newly issued upon conversion.
Why does this matter?
First, it dramatically simplifies the capital structure. No more preferred overhang. No more complicated conversion math. One class of stock, clean and simple.
Second - and more importantly - it signals confidence from the PE sponsors.
Preferred stock sits above common in the capital structure. It gets paid first in a liquidation. Converting to common means Ampersand and 1315 Capital voluntarily gave up that protection.
You don’t do that if you think the business is in trouble. You do that if you believe the common equity has meaningful upside.
Post-conversion ownership:
Ampersand Capital Partners: ~13.9 million shares (~50%)
1315 Capital: ~9.4 million shares (~34%)
Together they still control 84% of the company. But now they’re aligned with common shareholders in a way they weren’t before.
The Balance Sheet - Debt Free
The press release also confirmed that Interpace paid off 100% of its outstanding debt in December.
This was a company that, just a year ago, had real questions about liquidity and capital constraints. Those questions are now answered.
Debt-free. Profitable. Cash-generating. Growing double-digits.
That’s not the profile of a distressed microcap. That’s the profile of a business getting its house in order.
The Uplisting
Here’s the headline that matters most for the stock:
“Interpace intends to seek an uplisting to the Nasdaq Stock Market in 2026.”
In the original write-up, I flagged Nasdaq uplisting as one of several shots on goal - a realistic possibility, but not a certainty. Management was “exploring strategic alternatives.”
Now they’ve explicitly stated intent to uplist this year.
That’s not exploration. That’s execution.
CFO and COO Chris McCarthy framed it clearly:
“We believe that Interpace is in a strong financial position, and that uplisting to the Nasdaq Market will enable more investors to participate in the growth we expect going forward.”
He also outlined where the capital will be deployed: sales acceleration, revitalised commercial R&D, and ongoing lab automation.
This is a management team that sees the path forward and is actively pursuing it. They’re not waiting for something to happen. They’re making it happen.
A successful Nasdaq listing would transform the investor base. Institutional funds that can’t touch OTCQX stocks would suddenly have access. Liquidity would improve dramatically. Analyst coverage could follow.
No specific timeline was provided - only that they “intend to seek an uplisting in 2026.” I’d expect more clarity on the Q4 earnings call.
Thesis Confirmed
The original investment case rested on a few simple observations. Let’s see how each has played out.
Thyroid growth? In December, I pointed to 22% pro forma growth in Q3. The full year came in at 21%, with management guiding for 16% growth in 2026. Confirmed.
Profitability? The original piece estimated roughly $4 million in annual net income based on Q3 run-rates. Management has now explicitly confirmed positive Net Income and EBITDA from operations. Confirmed.
PE sponsors committed? In December, I noted that Ampersand and 1315 Capital owned 84% via preferred stock and weren’t selling. Since then, they’ve converted that preferred to common - voluntarily giving up their liquidation preference because they see more value in the equity upside. More than confirmed.
Balance sheet stability? The company has gone from “manageable” to debt-free. They paid off 100% of outstanding debt in December. Confirmed.
Uplisting optionality? This was flagged as one of several shots on goal. Management has now stated explicitly that they intend to pursue a Nasdaq uplisting in 2026. No longer optionality - it’s the plan. Confirmed.
Every box is ticked.
And yet the stock remains reasonably priced in my opinion.
At $1.75 per share with 27.7 million shares outstanding, the fully diluted market cap is approximately $48 million. On 2025 thyroid revenue of roughly $35 million, that’s about 1.4x sales. On 2026 guided revenue of $40 million, it’s closer to 1.2x forward sales.
For context, Veracyte - the thyroid diagnostics market leader - trades at roughly 7x revenue. Quest Diagnostics trades at around 1.8x. Interpace, growing faster than Quest with higher gross margins, trades at 1.2x forward revenue.
What’s Next
The obvious catalyst is the Nasdaq uplisting.
If successful, this would dramatically improve visibility, liquidity, and institutional access. A company generating real profits with a clean balance sheet and double-digit growth has no business trading on the OTCQX.
Beyond that, management has outlined their capital allocation priorities: sales acceleration to drive faster growth, commercial R&D to potentially expand the test menu, and continued lab automation to push margins higher.
The risks from the original piece remain. Reimbursement exposure is real - the company just lost one test to an adverse Medicare decision. Concentrated ownership means limited float. Liquidity is thin. Veracyte remains a formidable competitor with significantly greater resources.
These haven’t disappeared.
But the balance of evidence has shifted.
The business is executing. The capital structure is clean. The balance sheet is debt-free. Management is taking concrete steps to unlock value.
Thanks for reading,
Nico
Disclaimer: The content provided in this newsletter is for informational purposes only and does not constitute financial, investment, or other professional advice. The opinions expressed here are those of the author and do not necessarily reflect the views of The Clinical Edge. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. The author may or may not hold positions in the stocks or other financial instruments mentioned. Always do your own research or consult with a qualified financial advisor before making any investment decisions. To read our full disclaimer, click here.